Ok, so I believe that all of you read our story yesterday about Caneel Bay. There seems to be a bit of confusion as to what would happen if the proposed Bill does not pass Wednesday. Here is everything you need to know broken down:
- If this Bill does not pass, it does not mean that Caneel Bay will be shut down forever, nor does it mean that the property cannot operate as a resort.
- Congress decided several years back that Caneel Bay should operate under a concession agreement, not under a retained use agreement, which is what is has operated under since 1983. A concession agreement does not mean a hot dog stand for lack of a better term. Caneel can still operate as a full service hotel under a concession agreement.
- Plaskett’s proposed Bill calls for a 60-year retained use agreement and proposes that Caneel pay mere 1.2 percent to the federal government.
- No other hotel located within the US National Parks operate under a retained use agreement as Caneel currently does. All operate under concession agreements. Again, this is what Congress deemed would be best for the USVI, the Virgin Islands National Park, and the people and employees in the USVI.
- At the Grand Canyon National Park, the company that operates the hotels on the South Rim operate under a concession agreement. It is a 15-year agreement and they pay 8% back to the government.
- At Yellowstone National Park, the company that oversees it pays 4.5 percent, but they also pay a 6 percent annual contribution to a maintenance account. This is a 20-year agreement. They, too, operate under a concession agreement.
- Back in the USVI, Redwoods, who runs Cinnamon Bay, was given a 15-year lease and pays 2.5 percent. Caneel Bay Watersports has a 10-year lease and pays 4 percent. Paradise Agua Tours (runs the rental hut at Trunk Bay) has a three-year lease and pays 3 percent.
So two of our largest hotels operating within the US National Parks operate under a concession agreement. Every other business operating within the Virgin Islands National Park does too. So why shouldn’t Caneel? The answer is, they should.
- If the proposed Bill does not pass, the concession agreement for Caneel Bay would go out to bid in an open marketplace. This is a good thing. If this happens, it is extremely likely that the winning bidder would pay a significantly higher rate than the measly 1.2 percent proposed in Plaskett’s Bill. This money would go directly to the Park Service, which is dire straights these days.
- If this proposed Bill does pass, Caneel can continue to operate as an EDC (economic development commission). EDC benefits are meant to bring new businesses to the USVI and as a thank you, they get tax breaks. This is meant to be a short-term thing. Caneel, however, has been operating as an EDC for decades. They have also been doing so illegally. For starters, in order to qualify as an EDC, you need to have a certain amount of full-time employees. Caneel lays off its employees every year from late August to November 1st; therefore they are not full time and do not qualify for EDC benefits, yet they continue to receive them. This has also contributed to the depletion of the VI Unemployment Fund forcing the USVI to borrow heavily from the federal government – all while the operators of Caneel Bay continue to line their pockets.
- Because Caneel is receiving EDC benefits and will continue to do so if Plaskett’s Bill passes Wednesday, it does not have to pay property tax, income tax, excise tax or gross receipts tax to the USVI government. This equals millions of dollars a year.
- Caneel Bay charges a 12.5 occupancy tax as required by USVI law. Caneel itself, however, does not pay this tax, the person renting the room does.
- So if you stayed at Caneel just one night, you have paid more taxes to the USVI government than Caneel has the entire time it has been a resort.
- People are concerned about jobs at Caneel. If this Bill passes Wednesday, it does not mean that the laid off employees will return to work.
- Did you know that the gardeners who have worked for Caneel Bay for years only make $9 an hour? If Plaskett’s Bill does not pass Wednesday and a new company wins the bid for a new concession agreement, I am pretty certain that the employees will be treated more fairly than they have under CBI Acquisitons rule and they will be paid better.
- When CBI Acquisitions laid off its employees permanently following the storms, it only gave severance to employees for the time it has managed the resort. That means that people who have worked for Caneel for 15, 20, 25 years and more did not receive the full severance they should have been entitled to.
- Should Plaskett’s Bill pass, the 1.2 proposed fee sounds like it would be an improvement as they currently pay nothing. However the Bill also calls for them to be able to reduce this percentage by doing regular maintenance among other things. So in the end, they will continue to pay nothing.
- If the proposed Bill passes, the Park Service will continue to have no oversight on the 170-acre parcel. That means that the operators could tear down the historical ruins on property, continue to cut off access to the public beaches and build high rises anywhere on the property if they’d like.
- This tactic of shuttering the property and using it as a bargaining chip isn’t new for Caneel. They did so after Hurricane Marilyn too. Because Caneel Bay has two-year interruption insurance, they lose nothing by remaining closed. In fact, they remained closed for the full two years following Marilyn because they could. So who loses in this situation? Certainly not Caneel. We lose. The employees lose. The shop owners lose. The restaurants lose. The charters lose. Everyone loses but the operators of Caneel Bay.
- Side note: Caneel is currently housing BBC employees and has been housing relief workers since September. It is receiving a very high nightly rate for these stays. The storm damage isn’t preventing them to continue to profit. This demonstrates that part of Caneel is currently habitable and therefore it laid off all its employees by choice, not because it was forced to.
So hopefully by now, you see why this Bill is not in the best interest of the USVI; it is not in the best interest of the VI National Park; it is not in the best interest of the former Caneel Bay employees; it is not in the best interest of anyone except those who are set to profit off of Caneel Bay and that is solely the CBI Acquisition group.
So again, I implore you to reach out to your Congressman or either call the Committee of Natural Resources at (202) 225-2761 or email them here. Here is the direct link: https://naturalresources.house.gov/contact/
Please refer to H.R. 4731. That is the name of Plaskett’s bill.