Good Morning, Good Morning….I have some, um…Interesting news for you all this morning. It might read like rainbows and sunshine in regards to the immediate future of Caneel Bay Resort at first glance. But, I urge you to take a closer look at what we have been talking about over the past several years in regards to Caneel Bay Resort, the state it has been left in and the seeming lack of empathy for the local community prior to the filing of this lawsuit. In which, EHI, LLC and, its affiliate, CBI Acquisitions lay claim to the ownership of the property upon which Caneel Bay Resort rests. Which, as we know it, is National Park land with a management company responsible for the operations of the resort.
The lawsuit filed against the United States by the two aforementioned companies was done so with the District Court of the US Virgin Islands (St. Thomas and St. John District) on June 30, 2022. The following is the complete press release announcing this legal filing from Legal Newswire as submitted by Patrick Kidd, Director of Sales and Marketing, for EHI:
EHI Acquisitions, LLC (“EHI”) and CBI Acquisitions, LLC, the operators of Caneel Bay Resort on St. John, Virgin Islands, filed a lawsuit against the United States today to settle ownership of the Resort. Caneel Bay Resort was forced to close after the 2017 hurricanes, and ownership disputes since then have prevented its rebuilding. In its lawsuit, EHI announced plans to settle its ownership of the land, rebuild the resort, and transfer ownership of the Resort to a trust for the benefit of the people of St. John and the Virgin Islands community.
As the complaint describes, EHI’s efforts to rebuild the resort since 2017 have been frustrated by failed negotiations with the United States. Meanwhile, “the resort’s closure eliminated jobs, income for residents, and revenue for the entire Virgin Islands community.” In 2019, the resort land reverted to EHI, but the United States has not recognized EHI’s ownership, leaving Caneel Bay Resort in limbo. EHI’s lawsuit seeks to eliminate the cloud over its ownership of the land. Resolving EHI’s ownership is essential to its ability to raise the funds necessary to quickly rebuild the resort.
EHI also announced in the complaint that it is “creating a charitable trust for the benefit of the people of St. John and the Virgin Islands community,” and plans to donate the Resort property to the trust. Once EHI gets the resort reopened, lease payments from the Resort operator will provide funds to the trust for local schools, affordable and work-force housing, and environmental preservation. At the end of the lease term, the Resort will be owned and controlled by the trust for the benefit of the people of St. John and the Virgin Islands community.
EHI made these further commitments in rebuilding Caneel Bay Resort:
- Open a cultural heritage center on the resort;
- Appoint senior managers who know and respect the Virgin Islands people and culture;
- Invest in education including high school and university-level courses in hotel management for local residents;
- Protect and preserve the natural environment, and conduct a cleanup of the resort land; and
- Incorporate more hurricane-resistant design and construction.
“The people of St. John ultimately want to see the resort open again, and to know that its owner is committed to supporting the Virgin Islands,” said EHI’s spokesperson Patrick Kidd. “EHI goes a step further with its commitment to rebuild the resort and return the land to the Virgin Islands people.”
The suit is filed in the District Court of the Virgin Islands, Division of St. Thomas and St. John.
Ok…So, what do we make of all of this? I have questions!!
First, I want to note that this lawsuit was filed less than two weeks after the National Park Service released the Civic Engagement Comment Summary Report. Which, in a nut shell, spelled out just about everything someone would need in order to attempt to garner community support on a venture such as this. These two items may be absolutely isolated. But, the announcement of the creation of a trust for the Virgin Islands, a cultural center on site, hotel management vocational training for local residents, environmental cleanup, building for sustainability etc. Well, all of those things are directly referred to in the public comment report, compiled of responses from 1200 St. John residents and visitors.
I want to affirm here that many people on St. John DO want to see the caliber of guests that Caneel Bay once delivered back on this island. However, does that dissipate the recent trends of renters of what were once long-term rentals that are now short term? If not, then by looking at our current traffic, can we, as an island, HANDLE the extra several hundred guests a week during the busy months? Where do they find the local Virgin Islanders to staff the resort as they mention in the full filing (Page 13 of filing)? Everyone I know is working multiple jobs right now and the standing restaurants, car rental companies, etc., can’t handle the load as it is. So, will CBIA and EHI establish their own staff, staff housing, rental car companies, restaurants, etc., to immediately handle the extra load? The argument could be made that, with the return of Caneel Bay, St. John could go back to the good old days…But, in my opinion, if those days do return, they are a far cry in the distant future.
Additionally, many people on St. John wonder where they have been for the past five years as cultural ambassadors, elders in the community, politicians and their past employees have requested information, progress and insights into the future of the resort. There has been near radio silence as far as community outreach leading all the way back to September of 2017. Maybe behind closed doors communications have been conducted but definitively no public outcries have been made.
We remember when recovered furnishings were sold off at a premium price in the aftermath of the storms. We remember when the coveted employee’s union was almost immediately dissolved, long time employees received termination letters by mail and funds were distributed to workers, not necessarily just from the resort, but from all of you who donated to their gofundme.com. And, currently, half of the apartment complex owned by Caneel Bay Inc. lies in ruin when it could have been long renovated and used for long term housing.
Oh, and we remember when the New York Times quoted Gary Engle, Caneel Bay’s principal owner under CBIA, as stating the following in regards to his insurance payout from the storms:
“I could take that money and walk away, or I can take that money and reinvest and maybe put up a little more capital and turn this into something special,” Mr. Engle said. “Without Caneel Bay, St. John is going to implode.”
Well, it seems, up until this moment in time, that is what has been done with the money from the initially underinsured property. So, why now, all of a sudden, are they taking a final punch at resurrecting Caneel Bay in the “right” way? If they had a desire for an expedient solution to the “community’s” problems, then why wait until the final moments before the RUE expires? The basis for their case lies on the US not accepting their offer of $70 million in order to buy the estate. That was decided in June of 2019. So, here we are three years later…
After years of denying the community, the visitors, the environment access and protection within these sacred grounds, where will the oversight of these promises within the lawsuit come from? Similar to the terms of the RUE, the NPS will not have the power to oversee that the vast and costly environmental cleanup happens in an ecologically protective and sustainable way. That, in and of itself could take years…Especially if, as it states in the filing Caneel Bay will be “using its best efforts to ensure that other entities legally responsible for remediating environmental hazards at the Resort are held responsible for their cleanup operations” (Page 14 of the filing). So, who is that? The other management companies that have been in power over the past several decades? The Park? The Virgin Islands? I imagine more lawsuits would follow.
Now, this Trust set up for the Virgin Islands also sounds great in theory…But, who is going to manage it? Who will decide where those funds are going? Who will be reporting to to community to ensure transparency? And, what is the amount of the monthly “lease payment” they will be making that would commence two years after they are operational (See Page 12 of the filing)?
Like I said…There are so many questions. But, I would imagine that based on the past performances of these management companies, it is going to be difficult for the community to get on board. An open community meeting might be a good will step in the right direction. I know many others have far more in depth and personal questions than I do.
In seeing the initial articles released, there were uproarious cheers from the long time lovers of Caneel Bay Resort. And I GET THAT! I worked there for some time. It was an absolutely magical place. And seeing it broken from the water every day breaks my heart. I wept tears of joy the first time I returned to dine at the new Zozo’s!
But, I encourage all of you to read this filing as the community of St. John is. Without your rose colored glasses and with a bit of skepticism as you skim the pages. There are a lot of things yet to be resolved and, whether NPS takes control back of Caneel Bay Resort or it is relinquished via the terms of this lawsuit, there is a long road ahead. And whichever party walks away with the title to this beautiful place, we, as a community, need to hold them accountable for its protection, its cleanup and its accessibility and dedication to the generational Virgin Islanders who call this place their home.
Well said. As someone who lives in the states seeing first hand the disingenuous “we will help you” motto turn into the exact opposite, islanders definitely need to be leary and skeptical and stay on top of this. Things are not always what they seem or how they are “sold” stay vigilant and ASK questions!
Very informative article. Thank you for your input. May they take bureaucracy out of it. See the crazy in bureaucracy!
Keep it simple. Let’s hope for the best sooner then later.
You are most insightful; we must procede with caution and have better lawyers than them (?). Our family spent many Thanksgivings at Caneel, as well as birthdays and anniversaries. We have referred many people to Caneel, most of whom loved it. ( We stopped being friends with those that didn’t. lol)
Thank God there are people like you and your colleagues to guide this return of paradise. Wherever we go in the Caribbean, we compare it to Caneel Bay and the amazing island and people of St. John!
I was a Federal regulator with the Dept of the Interior for many years. IMHO, this may be both a public relations stunt aimed at the VI gov’t to try and get them to put pressure on NPS (and maybe Congress), and a move to delay NPS action. I imagine the suit will be thrown out by the court, but the smell it leaves behind – that EHI/CBI is “for” the people – will convince some. But the suit may also delay NPS action to finalize its TBD plans, with the hope that Congress shifts to Republican control in the interim. A loss in court for EHI/CBI is fodder for an appeal, which can take years.
I can’t believe the gall of those entrepreneurs. They pollute the land, pocket the insurance money, walk away from the property for 5 years–and now they want us to give it to them? Unfortunately we the taxpayers are going to have to pay to defend this frivolous suit.
I hope the court will send them flying with a resounding kick so they don’t interfere with responsible plans for the land.
Brass balls, and no conscience!
This is shameful by so many entities involved. Where are the” good” rich people that could make this right? Do they exist, or, are they unicorns?
Follow the money. If profit hungry CBI had not under insured the property, it would be rebuilt and up and running by now. How does CBI believe they own U.S. National Park land? This is desperate last chance move by CBI in hopes of getting a settlement and recovering some of their investment before the National Park regains control next year.
I haven been in the island for many years but what I’m reading an noticing the island is booming after covid .yes caneel bay would help for jobs an the economy but the island is not as dependent on caneel bay revenues as it was years ago so this time things need to be settled to the benefit of the island an residents.
NPS should recapture Caneel Bay upon present lease expiration and return this ‘one of a kind’ property to “We The People.”
EHI/CBI has had sufficient time to present a plan of redevelopment but has failed for many reasons driven by the almighty dollar!
Based upon increased tourism, the Caneel Bay beaches would alleviate congestion & should be enjoyed by all!
Hillary – this was written well. Thank you. This is a very complex topic, but I would be the first to ask CBIA and EHI – “Where you have been? And what have you done lately?” Thank you also to the comments from Gail, Laura, Bruce, and Lindsay! This whole thing stinks and is not for the people of St. John. I, too, am not a local, but I have been on St. John often, worked there, and love the people for twenty-five years. I am not the occasional tourist. I want what is best for the people of St. John and I do not believe that is what these people who have filed their lawsuit and pretend to love Caneel are wanting. Please everyone – do your due diligence and make sure you understand fully what is happening here. Thank you for your attention.
Pure Greed! End of story. It’s heart breaking for the people of St. John and for those of us outsiders who were fortunate enough to enjoy that magical most beautiful place for years and years. Regrettably we will probably still be having this discussion in another 5 years as this battle for supremacy rages on.
Hey Gail..they don’t want us to give it to them..they want to pay 70 million to start the process of rebuilding..5+years later..how about we just let the entire resort decay even further? So no tax dollars, jobs or visitors? Brilliant Gail
You think the entirety of Caneel is only worth$70M? The nice house in Cruz Bay listed for $17M must be really over-priced then…
https://www.cruzbayrealty.com/st-john-real-estate/86AA-Com-Cruz-Bay-Town-St-John-VI-00830-mls_22-122/?PropertyType=A&City=St+John&StandardStatus=Active&pg=1&OrderBy=-ListPrice&p=n&m=20011203192944200995000000&n=y
What does “In 2019 the resort land reverted to EHI” mean? We have been coming to the USVI since 1969. We were always under the impression that the Rockefellers donated the land to our National Park Service. They then leased the land to a management company for a specified number of years and the management company had to pay the NPS a percentage of their profits. I believe it was between 2-4%. I also read many times that the other National Parks were paid a high percentage and this was a bone of contention. You have listed many good questions and I am sure there are a lot more. Hopefully the VI and the NPS have good lawyers that can sort thru this. Thanks for the thorough update.
the hubris and entitlement and patronization these ‘community minded’ LLCs display is simply breathtaking
Incredibly well said and I can’t believe how much you have followed this over the years and I am sure all of us appreciate everything you have done to keep up with the story as it does get swept under the rug. This has been such a long and complicated process the potential good news for this is that something will be moving it may be a positive direction but yes it is important to remain skeptical and leery of the next owner of the property to make sure something like this doesn’t happen again. I would guess that people who have only visited there would want a nice resort there again or something similar as do I but obviously you want it done in the right way. What I find so sad right now is how that property has remained basically untouchable to everyone for as long as it has on such a beautiful piece of land.
Very simple: I don’t trust anything EHI/CBIA says. They can promise all these wonderful things, get the property and then renege on all those golden words. This is 2022, the year Laurance Rockefeller deemed the property to go back to the Park. THAT’S probably the motivation for EHI/CBIA to rear their ugly heads after five years of silence.
Eww, eww, eww. I don’t believe EHI is responsible for the leaking barrels of scary stuff BUT what is with the language of them owning Caneel Bay? They got the insurance money and ran. Please do not let them win! They didn’t do anything to secure the property before the hurricanes and they do not care about St. John.
The whole suit is a publicity stunt to make it sound like they’re the good guys who will do so much for St. John. But in reality, they’re just setting up their own trust which they’re totally managing and keeping total control with no accountability. It’s total manipulation. Great article Hillary.
If the “improvements” to the property are worth $70 Million why were they only insured for $40 Million?
I say just let it go back to nature. St. John is so overrun with tourists compared to just 20 years ago. It really doesn’t need more rooms for more people.
Yes, natural space and community access to all beaches and nature trails. Nothing good can come of all this greed.
CBI are frauds!!! First, they should be held accountable for any and all cleanup from contamination, they have all but walked away from all responsibilities there, are only tenants, NOT OWNERS, what garbage.
Second, kick them out, evict them like the deadbeat squatter tenant that they are, anything but giving them another long lease would be better than what they have displayed to date. A proper cleanup must be done, will be costly, and take some time. Start from there, accept all other potential new ideas, etc. but NOT CBI ever again.