The current owners of Frenchman’s Reef hotel and resort on St. Thomas gave a presentation to the Economic Development Authority board Tuesday, and said they estimate reopening in late 2022 after completing a $402 million rebuild.
The resort was severely damaged in the 2017 hurricanes, and representatives for current owner Fortress Investment Group said an estimated $92 million in wages has been lost since the hotel closed four years ago.
DiamondRock Hospitality Company, which acquired the property in June 2005 from Marriott for $350 million, sold the resort to Fortress Investment Group in April for $35 million. Construction resumed in May, and the resort is expected to hold a grand opening in December 2022.
According to DiamondRock, it received approximately $240 million in insurance proceeds after the 2017 hurricanes and the rebuild of the resort was less than 50% completed when construction was largely suspended in March 2020 as the COVID-19 epidemic exploded. Since the beginning of the year, DiamondRock says it only spent $2.5 million on the rebuild project.
During Tuesday’s board meeting, the company had an opportunity to “address the applicant’s modification request relative to incentives previously granted under the Hotel Development Program to DiamondRock Frenchman’s Owner, Inc.” and to “update the Governing Board on the company’s progress toward renovating the resort,” according to EDA CEO Wayne Biggs Jr.
Attorney Adriane Dudley said Fortress anticipates spending $254 million on completing the rebuild, and with previous investment, the total project will be worth $402 million.
Fortress Managing Director Ali Elam said DiamondRock was a public company, so “they were unable to continue with this project because their stock price had declined. We’re not like that, we’re not subject to market vagaries.”
Fortress has privately raised capital, and “we will finish this project come hell or high water because our money is already raised and it’s not subject to whatever may happen in the market.”
With construction, the project is expected to create over 900 jobs. Former employees are encouraged to apply when the company starts hiring 400 to 600 resort workers in September 2022, and must comply with COVID-19 vaccination requirements.
EDA board Chairman Kevin Rodriquez asked whether the company will allow employees to unionize.
Dudley said that “we’ll not be encouraging or discouraging anybody who wants to come to the property, but we will have a firm no-solicitation rule so neither our guests or residents who are guests at the hotel will be solicited or interrupted or interfered with,” and compared union representatives to the barkers outside Main Street jewelry shops.
“I’m referencing the formation of a union,” Rodriguez said.
“I understand your question very well and I believe any further discussion will be had offline and not in the public sector,” Dudley said.
Dudley said the resort is constructing its own reverse osmosis system and a plant for on-site electricity generation, so guests aren’t reliant on the V.I. Water and Power Authority for water and power.
Before stopping construction, DiamondRock had announced it planned to reopen the 478-room property as two separate hotels — Frenchman’s Reef Marriott Resort & Spa and Noni Beach, Autograph Collection.
Fortress representatives said Tuesday they’re moving ahead with similar plans, and the property will boast a total of 486 guest rooms, 10 restaurants and bars, four pools, a 13-treatment room luxury spa, kids’ club and activity center, a 1,400-foot white sand beach, and a 60,000-square-foot indoor and outdoor function space.
The Marriott will have 392 guest rooms while the Autograph collection hotel will have 94. Restaurants include Asian-inspired sushi and poke eatery Sugarfin, Shorebird buffet and juice bar, Luna Mar coastal Mediterranean, and “The Salt Shack” bar and grill with “Baja tacos,” and Buoy Coastal Kitchen, for seafood fine dining.
Davies asked whether the resort will offer any Virgin Islands food or culture.
“We are very mindful that tourists pick destinations for that local experience, therefore we’ve looked to the local vibe and the local predominantly seafood-led cuisine bringing into our various concepts, from the casual beachside Baja tacos at the beach shack,” to Buoy, which will have “the local catch, the local fishes, the local spices, as well as the local culinary talent to come in and prepare those. We want to be a good representation of St. Thomas for our guests,” said Fortress Managing Director Joe Gould.
Board member Jose Penn asked about the property’s resilience to future hurricanes.
Dudley said guest safety is “utmost in our planning,” and “we have taken extreme measures to ensure that we don’t experience the kind of ravage and devastation that was visited upon the project by hurricanes Irma and Maria.”
Board member Positive Nelson asked if they anticipate rebranding the resort. Gould said there are “active conversations” ongoing about the possibility that there’s “another flag within the Marriott family that may be more reflective of the environment that we’re trying to create,” specifically “the Westin brand in lieu of the Marriott flag.”
Gould said the resort will remain a Marriott property regardless, but if it’s under the Westin “we see it as a win/win if that happens” as it “produces a higher rate” for rooms.
Nelson also asked if there’s anything the local government should be doing to help boost tourism for the resort.
Waiting in long security lines at King Airport “needs to go away,” Gould said. “It’s the first thing they experience and it’s the last thing they experience from the island.”
Roads and infrastructure must also be maintained, Gould said, and “traffic is an issue in certain hours of the day, so that’s another area I would like to continue to focus on.”