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HomeNewsLocal newsFeds Accuse Caneel Lease Holder Of Dishonest Dealings

Feds Accuse Caneel Lease Holder Of Dishonest Dealings

Caneel Bay ruins are scheduled to transfer to the U.S. government in September. (Photo by Mat Probasco)

U.S. Attorney Delia Smith pulled no punches in a recent assessment of Caneel Bay legal wrangling. Lease-holders EHI Acquisitions was acting in “bad faith” while seeking to profit from hurricane damage that wrecked the beloved property in 2017, she and Assistant United States Attorney Joycelyn Hewlett wrote to the court Tuesday.

EHI, and parent company CBI Acquisitions, had managed the St. John resort since 2004. After the storms, CBI Acquisitions Managing Member Gary Engle told Virgin Islands reporters the company’s multiple insurance claims would be a “more than fair return on our investment,” according to court records. Engle reportedly said it was enough money to rebuild the heavily-damaged 150-acre resort.

Despite that, in 2019, EHI demanded the U.S. government wire the company $70 million and shield it from fault over potential hazardous chemicals leaked on the property. Federal investigators had tried to test for mercury, arsenic and other toxins since 2014 but had been denied access, according to court records.

EHI’s “demand of $70 million for the damaged improvements was not only in bad faith but also unconscionable,” Smith wrote in the court filing.

In a June 2022 press release announcing its suit against the U.S. government over the land, EHI said it would settle its lawsuit over ownership of the land, rebuild the resort, and transfer ownership to a trust “for the benefit of the people of St. John and the Virgin Islands community.”

It’s an idea that quickly caught on with generations of Caneel fans eager for the property to reopen and re-employ St. Johnians. Former Senator Almando “Rocky” Liburd even launched an online petition advancing the plan.

The problem is, the resort isn’t EHI’s to give away, Smith said in the court filing.

“Plaintiff seems to think that its complaint is a betting card game that will be decided based on luck. With its alleged commitment to ‘gift the land to the people of the Virgin Islands’ and ‘bring back local pride,’ plaintiff is betting on public opinion to persuade the court that it now owns 150 acres of prime, beachfront property on St. John – all free of cost,” she wrote.

Smith characterized EHI’s proposed gift of the property’s improvements as disingenuous because on Sept. 30 the United States will own all of the Caneel Bay property, she said.

Laurance Rockefeller purchased and donated more than 5,000 acres of St. John to the National Park in 1956. Rockefeller held back the land, then known as Caneel Bay Plantation, until 1983, when he allowed a 40-year provision for his non-profit conservation group Jackson Hole Preserve, Incorporated, to own the improvements on the land. In 1986, JHPI transferred ownership of the improvements to another Rockefeller company, RockResorts, with the understanding that in 2023 the improvements and land would all be part of the park, Smith said.

Smith said it was always Rockefeller’s plan to have Caneel Bay given to the National Park “for the use and enjoyment” of Virgin Islanders and visitors alike. She quoted a letter to then-Department of the Interior Secretary James Watt in which Rockefeller said Caneel was not supposed to be a money maker.

“Our Caneel Bay project was never expected to be an outstanding financial venture, although in recent years the returns have been reasonably gratifying. Because our property became a Park inholding after the Park was established, it has been a JHPI project, thereby ensuring that any profit generated would be available for other conservation purposes. No effort has been made to return the original sizable investment necessary not only for facility construction but to bring power, water, roads and communications to the island—none of which was there in 1952. In the early days of the Park, when such infrastructures became essential, the government could not fund them.”

In the early 1980s letter attached to the court filing, Rockefeller expressly says the property and its improvements should be transferred to the National Park.

Laurance Rockefeller’s plan to have all of Caneel Bay as part of the park is mentioned in this 1984 memo. (Photo: Screenshot of court records)

In the 2022 press release, EHI positioned itself as on the side of Virgin Islanders: “The people of St. John ultimately want to see the resort open again, and to know that its owner is committed to supporting the Virgin Islands,” said an EHI spokesperson in the media release. “EHI goes a step further with its commitment to rebuild the resort and return the land to the Virgin Islands people.”

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