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St. Croix Golden Gaming Resort May Start Construction in February

Ground should break on Paul Golden’s long-delayed casino and golf resort around Great Pond on St. Croix as early as February, developer Paul Golden said at a press conference Tuesday, crediting a new law letting the government guarantee long-term leases for hotel developments.

The resort is to have 400 luxury rooms, which will become the keystone of a $274 million complex on 294 acres that includes a new 43,000 square foot conference center, Golden said at the press conference at the Palms at Pelican Cove. Anthony Weeks of the St. Croix Economic Development Initiative acted as master of ceremonies.

Amenities are to feature a 25,000 square foot casino, an 18-hole Jack Nicklaus signature golf course, a 17,000 square foot world-class spa and fitness center, four restaurants, lounges, retail stores and a kids’ club. The property will be located on the south shore of St. Croix, near downtown Christiansted and 15 minutes from Henry E. Rohlsen International Airport.

Golden has been planning the resort for 14 years, but the Golden Gaming project has met considerable opposition and permit difficulty from its inception. Golden Gaming waited for all of 2004 for action on its request for a Coastal Zone Management permit. In January 2005, the Board of Land Use Appeals granted the permit by default because of the CZM’s failure to acGolden has also faced fierce opposition from environmentalists, who are concerned about its ecologically sensitive location near St. Croix’s Great Pond. The Virgin Islands Conservation Society filed suit in V.I. Superior Court in February 2005, seeking to block the permit. Andrew Simpson, VICS’s attorney, argued among other things that BLUA did not have jurisdiction to make the decision and the environmental assessment done by Golden was insufficient.A federal judge tossed out a VICS suit challenging the permit in 2009, and his permit is legally valid, although Golden is appealing a part of one decision, and questions about fact finding for the permit are still before the courts . Since then, the global recession and difficulty arranging financing have also delayed the project.

Golden said the final piece of financing fell into place thanks to new legislation authorizing the V.I. Public Finance Authority to guarantee as much as $20 million of hotel developer’s leases, for a period of up to 25 years.

It gives the PFA the power to issue such loan guarantees, with the "full faith and credit of the government of the Virgin Islands."

It says the "PFA shall stipulate, in a contingent guarantee agreement, minimum criteria for triggering guarantee to satisfy default. The criteria must mitigate fiscal risk brought about by an unanticipated call on contingent lease guarantee and include remediation provisions."

Golden said CTL Capital, a multibillion-dollar investment firm based out of New York, just finalized the lending package and CTL Managing Director Paul Penney was at the press conference with him.

He thanked Sen. Alicia "Chucky" Hansen, the bill’s sponsor, and the 13 senators who voted in favor of the bill, and Gov. John deJongh Jr. for signing it into law and for supporting the project over the years.

"This bill is a catalyst that will achieve our objective and make a crucial difference," Golden said.

Asked why a lease guarantee was helpful, Golden said it was a common tool in finance and met the requirements of the lender. Asked who needed a lease if he owned the land, Golden said it would be a lease between two corporate entities, both ultimately owned by the parent company.

Penney said the lease is part of a financial and management structure that helps to protect the lender.

"The structure is actually a bit of a spider web," Penney said. "It is a wholly isolated subsidiary which has the lease, which protects the lender."

Golden said financing would be finalized as soon as the lease guarantee is issued and ground could break in the first quarter of 2015.

During peak construction, there will be more than 1,200 construction jobs, and about a thousand direct jobs at the resort once it is open, Golden said, also emphasizing potentially more indirect jobs as money flows into the community.

They want to be ready before the Transfer Day commemoration in 2017 and are "looking to be open by the end of March, 2017," Golden said.

Editor’s Note: This story has been updated to clarify the status of VICS lawsuits over Golden’s CZM permit.

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