The V.I. Economic Development Commission has granted Lovango Island Holdings an extension of time to begin utilizing tax benefits to 2023 due to COVID-related construction delays at Lovango Resort & Beach Club.
Lovango Island Holdings organized in July 2019 and applied for Economic Development Commission tax incentives a short time later.
The EDC board granted incentives but denied the company’s request for a waiver of the program’s minimum residency requirement of 80%, and reaffirmed its decision after the company appealed, according to Margarita Benjamin, managing director of economic development for the V.I. Economic Development Authority.
In Sept. 2020, the company asked for an extension of time to commence its benefits under the EDC program, and the board voted to grant an extension to Jan. 2022 so the company could fully utilize the incentives.
“Before us today is a second request for an extension of time to commence the tax incentive benefits,” Benjamin said during a board meeting Tuesday.
Located on Lovango Cay off St. John, the resort’s pool and beach club opened in December 2020 and closed for the season in July.
The club is expected to reopen in December, which is when the company originally anticipated having completed Phase 2 of the resort’s construction, which includes on-island accommodations, Benjamin said.
The impact of COVID-19 on supply chains has slowed the pace of construction, and the company is requesting additional time to complete the current phase, she said.
Typically, such construction would be done after a benefit certificate had been granted, giving the EDA staff an opportunity to help recommend Virgin Islands companies and vendors that could provide services, Benjamin said.
Despite not yet being obligated under the tax benefit program’s requirements, the company provided a list of Virgin Islands vendors working on the project, and the amounts paid to each to date.
More than $3 million has been expended on the resort since Jan. 2020, not including the initial $11 million purchase price, Benjamin said. There are currently 102 full and part-time personnel employed at the resort, both seasonally and year-round, including construction and operating personnel.
EDC staff did due diligence and determined that the request was reasonable, and the project has indeed been delayed due to the pandemic.
The company “has shown good cause for the grant of additional time to commence its tax incentive benefits,” and the four board members present — Chairman Kevin Rodriquez, Secretary Haldane Davies, Positive Nelson and Jose Penn — voted unanimously to approve the request.