The Ritz-Carlton, St. Thomas resort has received approval to assess customers an additional 7.5% fee for 30 years to recoup $32.6 million spent on repairs and renovations after the 2017 hurricanes
At a virtual board meeting Tuesday, the V.I. Economic Development Authority voted unanimously to grant the request by RC Hotels, Inc., which operates the Ritz-Carlton on Great Bay.
Margarita Benjamin, EDA managing director for economic development, said the resort is situated “on a portion of 30 pristine acres” with 180 guest rooms and suites. The separately owned and operated Ritz-Carlton Club operates 105 timeshares nearby.
Benjamin said the resort is focused on “an exclusive, luxury experience,” and sustained serious damage in the 2017 hurricanes.
Normal operations were closed for more than two years, with 70% of units unoccupied after the storms. Two buildings were considered a complete loss after suffering roof damage, while the entire complex of buildings suffered water damage and every room had to be renovated, Benjamin said.
Benjamin said the resort, which already receives tax breaks through the EDA, asked to impose the Economic Recovery Fee to cover repair and renovation costs.
Gov. Albert Bryan Jr. signed the Economic Recovery Fee bill into law in 2019, and it is separate from the Hotel Room Occupancy Tax, which charges guests 12.5% of the gross room rent.
The bill expands upon the Hotel Development Act of 2011, by not just focusing on new hotels and resorts, but also existing damaged properties who receive approval from the EDA.
Developers wishing to impose an Economic Recovery Fee are required to submit an application detailing the project that the funds will go toward. The application is reviewed by a committee, composed of the Tourism commissioner, Finance commissioner and a member of the EDA’s governing board or an appropriate designee.
Once approved, the developer is able to impose an Economic Recovery Fee no more than 7.5%. The fee will appear as a separate line item on a guest’s invoice, and will be deposited into an interest-bearing trust fund.
The board discussed the matter in a closed-door executive session, and did not explain their reasoning or decision-making process for the public.
The board voted unanimously to approve a 7.5% fee for a 30-year period, or until the $32.6 million repair cost is covered, whichever comes first.
Benjamin said the company still needs to identify when they intend to begin collecting the fee and provide notification to the EDA.