V.I. Superior Court ruled on Friday that a minor Coastal Zone Permit is deemed approved by law and CZM must issue the document by the end of the month, apparently clearing the way for a St. Thomas hedge fund manager to continue his plan to open a floating restaurant and bar off two small cays between St. Thomas and St. John.
Opponents of the project say many questions remain regarding the permitting of the project, known as Cowgirl Bebop, which has drawn controversy since first proposed. But Judge Denise Francois’ memorandum explaining the ruling says V.I. law clearly gives the St. John CZM board 15 days to raise any objection to the permit. According to Francois, since CZM missed the statutory deadline, V.I. law declares the permit granted, without any mechanism to address any concerns or disputes.
Francois wrote that the court “echoes” the V.I. District Court’s opinion in a similar case that “the permit by default clause creates the potential for the abdication of the CZM’s role. That potential was realized here.”
The plan from 2019 calls for the installation of several moorings, some of which would be used to tether a 120-foot by 40-foot barge on which the multilevel lounge would be built. The remaining moorings would be open to the public and presumably occupied by customers. The barge would have docks on three sides for charter and private boats to tie up to.
Although Cowgirl Bebop’s design includes some propulsion, it might be towed to its location near the cut between Mingo and Grass cays in Pillsbury Sound and would be serviced daily by a boat based in Red Hook, St. Thomas.
A minor permit for the project was submitted to the Coastal Zone Management Division of the Department of Planning and Natural Resources in June 2019.
Friday’s ruling by Superior Court Judge Francois says that the Department of Planning and Natural Resources took too long to act on the permit, triggering legislation that mandates that the developer be granted a permit by default.
Under the V.I. Code, DPNR has 15 days to let an applicant know if there is a problem with a CZM permit application, then is required to act upon a completed permit within 60 days after it has been submitted. The developer of Cowgirl Bebop filed suit for a decision by default in October 2019. According to Francois, DPNR did not adequately respond until 252 days after the application was originally submitted.
Cowgirl Bebop LLLP applied for a minor permit in part because the project was estimated to cost under $75,000, the threshold for necessitating a major permit application and a more rigorous approval process. Its status as a moored vessel to be located seaward of mean high tide also was a deciding factor, according to Alex Golubitsky, Cowgirl Bebop’s attorney and spokesperson.
Cowgirl Bebop is owned by William “Bill” Perkins III, a hedge fund manager and professional poker player who lives on St. Thomas. Perkins also owns Brisa Max Holdings VI LLC, a beneficiary of tax breaks through the University of the Virgin Islands Research and Technology Park. The RTPark describes the company as engaging in “technology and knowledge-intensive research, consulting and investment services.”
Because a public meeting is not required for a minor permit, there was no public notice of the project during the summer of 2019, and the project drew little attention.
However, David Silverman, who was a member of the St. John Board of Coastal Zone Management at the time, learned about the application; he brought it to DPNR’s attention that he believed the application was incorrectly submitted as a St. Thomas project when, in fact, it fell within the jurisdiction on St. John.
That led to Perkins and his team agreeing to host an informal public meeting along with one CZM official on Nov. 13, 2019, in Cruz Bay.
Toward the end of the meeting, Silverman spoke as a private citizen. Silverman said he believed there were several faults regarding the permit application. First, he said the project was erroneously assigned to the St. Thomas District when it should have been assigned to St. John because of its proposed location.
Second, he asserted he believed staff from the Department of Planning and Natural Resources made a mistake when they told the developers of Cowgirl Bebop the project would only require a minor water-use permit. “The placement of a non-powered barge on the Tier-One coastal waters and attaching that barge on a semi-permanent basis to a mooring in the seabed is not within the enumerated list of activities eligible for a CZM minor water permit,” Silverman said.
In recent emails, Golubitsky said this “is flatly false and a mischaracterization of the regulations governing CZM. In fact, all applications for moorings are minor permit applications. The sole reason that CZM stated a major permit is necessary is that the vessel is not a vessel and is a “structure” worth more than $75,000.” He also raised objections related to whether the proposed floating restaurant is a “structure” or “vessel” and how that impacts whether a minor or major permit is required under V.I. law.
Sections of the V.I. Coastal Zone Management law within Title 12, section 902, carve out an exception for the requirement for a major CZM permit for “moorings for vessels,” which are one part of Cowboy Bebop’s minor CZM permit application. According to Golubitsky, a “vessel” cannot be a “structure,” and hence does not fall under the requirement for a major CZM permit.
But Friday’s court ruling appears to have made any such disputes irrelevant due to CZM missing the deadline to raise these or any other objections.
“Here, the incompleteness of the application – that it was the wrong class of permit, was based off a clear monetary valuation. Defendants offer no explanation for why this valuation was not self-evident or identifiable within fifteen days,” Francois wrote.
“To permit Defendants to use the appeal of the separate, major permit, which Plaintiffs filed out of diligence while this suit was pending, to deny Plaintiffs right to the minor permit already granted by law, would render meaningless the entire temporal framework established by the Legislature to ensure CZM and the commissioner promptly conduct reviews. It would sanction the sluggish administrative action that framework is meant to prevent. Further, it would condone violations of clearly granted statutory rights,” she wrote.
In February 2020, DPNR informed the developers of Cowgirl Bebop that they would need to apply for a major CZM permit. They applied on May 8, 2020, and an online official public hearing was held on July 7, 2020.
At that meeting, proponents of the project cited the benefits to the economy of offering a destination for boaters in the territory to rival popular sites in the British Virgin Islands, like the Willy T. They also said the project would not damage nearby coral reefs or seagrass.
Opponents said studies were not sufficient to prove that the location was safe in terms of wind and currents. (Three boy scouts drowned there in the late 1980s when their dinghy was overturned by an unexpected swell.) They also cited a lack of regulations regarding the use of floating bars and restaurants.
At a decision-making meeting held by the St. John CZM board on Sept. 24, 2020, the board voted unanimously to deny the major permit application for a variety of reasons, although DPNR staff recommended that it be approved.
The developers of Cowgirl Bebop filed an appeal to the Board of Land Use Appeals to overturn the STJ-CZM board’s decision. That hearing is scheduled for March 18 at 10 a.m.
Silverman, who was removed from the STJ-CZM board two days prior to the decision to deny the permit, said it’s anyone’s guess what will transpire at the March 18 BLUA hearing.
“The minor CZM permit did not cover the installation and operation of the restaurant/lounge barge itself, only the moorings,” he said. “A vessel semi-permanently attached to the submerged lands of the U.S. Virgin Islands requires a major CZM permit, which is the reason this permit was required by DPNR.”
Golubitsky disagreed, saying no further permitting by CZM/DPNR is needed. “There is one CZM permit, which CZM unilaterally opted to treat as a major permit after the minor permit was granted by operation of law. This attempt to skirt the law was not accepted by Judge Francois who has simply ordered CZM to issue the permit to Bebop which Bebop has had by operation of law since the late summer of 2019.”
The court says there are two permits that permit the same activities.
“Defendants now seek to use the pending nature of the appeal of the major permit’s denial to stop issuance of the minor permit. However, the minor permit and the major permit, while covering the same matter, are two separate permits,” Francois wrote.
The ruling also appears to imply that because they cover the same activities, the major CZM permit has no bearing on the minor permit, as every activity envisioned in the major permit is already allowed by the minor permit, so that the outcome of the BLUA hearing may not have any impact on what Cowboy Bebop may or may not do.
“It is true BLUA could have granted the major permit, functionally rendering the case here moot as concerns Plaintiffs business plans, but that is not a concern as the court now grants the permit,” she wrote. “It is possible BLUA affirms the denial of the major permit, but that is also not of concern to the court as the major permit applied for in 2020 is a different permit than the one before the court. Nor is it the court’s providence to assess whether the permit should or should not be granted as concerns CZM’s and BLUA’s guidelines for such matters.”
The ruling could be appealed to the V.I. Supreme Court.
The developers will need to obtain permits from the U.S. Army Corps of Engineers for the mooring field, the barge moorings and the placement of the semi-permanent barge itself.
The U.S. Coast Guard must also grant its approval if the barge is considered to be a vessel under USCG rules.