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.