CBIA Managing Member Gary Engle’s latest ploy reportedly seeking a payment of $70 million and indemnification from liability for environmental contamination at Caneel Bay in exchange for his early termination of the Retained Use Estate (RUE) should be roundly rejected.
True, CBIA and Engle have the right to terminate the RUE anytime they wish. Laurance Rockefeller understandably retained that right when he donated the property to the National Park Service, and Engle inherited that right when he purchased the remaining 19 years on the RUE in 2004.
Yet whether he chooses to terminate before 2023 or not doesn’t really matter. By Engle’s own admission, it would take him at least 3 years to rebuild Caneel Bay. And we suspect it would take a whole lot longer due to the litigation he mentioned in Congressional testimony that his continued presence at Caneel Bay would likely engender. So, giving Engle a “sweetheart deal,” either by extending the RUE or in exchange for his early termination of it, would likely yield little if any benefit in terms of expediting the reopening of the resort.
After nearly two years with no action by CBIA to rebuild Caneel Bay Resort, and Engle’s apparent inability to reopen the resort before the RUE expires on September 30, 2023, CBIA and Engle are no longer relevant to discussions regarding the future of Caneel Bay.
Engle has stated publicly that he has had more than a fair return on his investment in Caneel Bay. With admitted annual revenues of $45 million, annual profits of $9 million and exempt from paying the 5% gross receipts tax and other taxes due to Caneel’s status as an EDC beneficiary, we couldn’t agree more. Engle has already made a fortune off Caneel Bay, while Caneel’s EDC status deprived the territory of tens of millions of dollars in desperately-needed tax revenue. Engle also benefited handsomely from the destruction caused by hurricanes Irma and Maria by collecting an unexpected windfall estimated at $100 million in post-hurricane insurance claims.
No one needs to feel sorry for Engle.
We applaud Delegate Plaskett’s disclosure of Engle’s ploy and the National Park Service’s reluctance to be intimidated by Engle. We urge them both now to simply ignore Engle and facilitate discussions regarding the future of Caneel Bay.
It is time for those genuinely interested and concerned stakeholders to begin the process of determining Caneel Bay’s future. The impending expiration of the RUE offers this unique opportunity that has not existed since Mr. Rockefeller’s donation of over 5,000 acres creating the Virgin Islands National Park in 1956.
It will take time to conduct those discussions and develop a consensus on the best path forward.
It will take time to develop a plan for what a reimagined Caneel Bay Resort could be, possibly even incorporating suggestions we have heard including year-round employment for local residents, construction of employee housing, a cultural museum, an amphitheater for public events, improved access to Caneel’s beaches for residents and any other ideas stakeholders may have.
It will take time to prepare and finalize a Request for Proposals to then enable qualified bidders, including the major hotel companies and financially-capable investors, to submit their bids.
And it will take time to then evaluate those bids and contract with the winner.
There is much work to be done, and the time to get started is now. So that when the RUE expires on September 30, 2023, we will be ready to break ground on a new Caneel Bay Resort destined to serve St. Johnians and all Virgin Islanders for decades to come.