When the National Park Service announced on Tuesday, July 27 that it will employ a competitive lease strategy to redevelop Caneel Bay within the Virgin Islands National Park, the response was overwhelmingly positive.
However, it was disappointing news for the Caneel Purpose Group, made of several entrepreneurs who have joined together with the hope of speeding up the process of redeveloping the iconic resort on St. John’s north shore.
The Caneel Purpose Group has pledged to work with the St. John community and the National Park Service to design an eco-friendly resort that expands public access, provides jobs and educational opportunities, and enhances the preservation of natural and cultural resources.
Their strategy for doing this is to make a deal with Gary Engle, the managing member of CBI Acquisitions, LLC, which operates the Caneel Bay Resort on property within the Virgin Islands National Park. The resort was severely damaged by hurricanes Irma and Maria in 2017 and has largely remained in ruins since then. Two businesses, ZoZo’s restaurant, and V.I. Ecotour’s water sports center at Honeymoon Bay, operate independently on the property.
CBIA still maintains control of the property through a Retained Use Agreement, “a unique arrangement crafted by Laurance S. Rockefeller in 1983, setting aside the 150-acre resort for independent operation and management,” according to the NPS press release. That agreement “will remain in place until its expiration on September 30, 2023, when the NPS assumes full responsibility.”
Under federal legislation passed in 2010, CBIA, as the holder of the Retained Use Estate, has the exclusive right to negotiate a new 40-year lease with the National Park Service; that lease would begin in 2023.
The Caneel Purpose Group was hoping to reach an amicable agreement with CBIA to buy them out and begin negotiations with the Park Service to rebuild the resort as soon as possible. O’Hayer said this plan would diminish the possibility of litigation as the Retained Use Estate winds down.
The possibility of litigation looms large because hazardous materials have been found on the Caneel Bay property. The cost of the cleanup of the contaminated areas already identified has been estimated at $6 million; further investigation of contamination will continue in the fall.
The Caneel Purpose Group went public with its proposal to rebuild Caneel Bay Resort in June before the open-bid process was announced. The open-bid timeline now calls for a new Environmental Assessment process to begin in November, requests for qualifications and proposals to begin in the summer of 2022, and construction to begin in late 2024.
O’Hayer wants to circumvent years of delay before construction can begin under the open-bid process. “We’ve met with scores of people over the past months; the overwhelming majority want to proceed sooner,” he said.
Furthermore, delaying the selection of a developer for several years is risky, according to O’Hayer, because of changes in public policy that could occur. “We have a presidential election coming up in 2024. Depending who wins, all bets could be off,” he said.
In a worst-case scenario, a developer could be selected who wants to put in an 18-hole golf course on the property, O’Hayer said. “Imagine the runoff with fertilizers, pesticides, and herbicides pouring in the water, and what that would do to the sea life. I don’t want to sound like an alarmist, but it is a risk of the outcome of a competitive bid process that could run past a 2024 election.”
O’Hayer said it’s unlikely that the National Park Service would select a developer who proposed such a plan, but then again, he said he never thought he’d see an administration that promoted drilling for oil in the Arctic National Wildlife Refuge or sought to undo provisions in the Clean Water Act, both of which were done under the Trump Administration.
The Caneel Purpose Group announced its plans to hold Monday’s public online meeting soon after the NPS publicized its decision to move to an open-bid process.
Since then, the group has been getting push-back on social media from those who favor the transparency of the open-bid process. Several community members commented that the Caneel Purpose Group should just bide their time and put in their bid when the time comes.
O’Hayer said his group is not interested in waiting, nor do they think other large corporations will be as willing to comply with many of the proposals the community has put forth as part of the months-long public visioning process. The Caneel Purpose Group has said it will – among other things – build a museum, establish a university partnership program, and offer a $20-an-hour starting minimum wage.
The Caneel Purpose Group is hoping to convince the public that their plan is the better path, but O’Hayer said the NPS’s decision to move to the open-bid process is likely to stand unless “there is overwhelming support for our plan.” He’s hoping to get that groundswell of support following Monday night’s meeting.