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PFA Board Approves Additional $1.5M for King's Alley Hotel

March 29, 2006 — Additional funding for renovations to the King's Alley Hotel on St. Croix was approved by the Public Finance Authority board during a meeting Wednesday – bringing the PFA's overall investment in the project up to approximately $8 million.
The board authorized the release – $1.5 million from the 1994 Government Construction Fund – based on a recommendation made by Kent Bernier, the authority's interim director of finance and administration, who said the appropriation should be enough to complete the "shell" of the hotel by May 31 but would not make the property ready for occupancy.
Bernier further stated that the $1.5 million is subject to change based on the board's approval of change orders currently being developed for additional work completed on the project. He added that the change orders have not yet been reviewed by Lanio and Associates Architects Inc. — the company hired to represent the PFA's interests to the project's contractor — and that that the amounts specified on the change orders would be negotiated before coming to the board for approval.
King's Alley Hotel is a public/private project that the V.I. government got involved in after the authority acquired control of the property through default in 2001. The PFA has provided the funding to sustain the project.
After the meeting, Bernier said any additional funding needed for the project would be presented to the PFA board by the board members of King's Alley Management Inc. (CAMI), the corporation which runs the government's portion of the King's Alley Hotel and the surrounding shopping complex. CAMI's board members includes Gov. Charles W. Turnbull – who is also the chair of the PFA board – and Finance Commissioner Bernice Turnbull, among others.
During the meeting, Hortensia Lanio, head of Lanio Architects, added to Bernier's comments by saying additional improvements outside the project's original scope of work were needed. She said since the improvements were "urgent," a construction directive authorizing the improvements was issued on behalf of the PFA board, with the idea that the change orders would be completed at a later date.
According to Lanio:
–the location of the hotel didn't allow for a geo-technical study of the property to be conducted before the design process began, so repairs took "a long time" to finish.
–a swimming pool, which needed to be filled, was found on the property when excavation started.
–the roof of the hotel needed to be redone, along with various structural repairs and a complete revamping of the hotel's laundry facilities and electrical system.
"The change orders for these items were not approved right away because things needed to be fixed," Lanio told board members.
Bernier added that the project's contractor, Best Construction, is currently owed $300,000 for work already completed.
Board members seemed hesitant to approve the request, especially after Commissioner Turnbull said that the money remaining in the construction fund might be earmarked for other projects. However, at the end of the meeting, board members agreed to release the money since Bernier said the "shell of the hotel" was close to completion.
The board also approved the release of $75,000 from interest earned on bond proceeds for the rebuilding of the historic Sanderilla Thomas Bungalow at Rothschild Francis "Market" Square, and the transfer of $100,000 from the PFA's interest income account for additional repairs to Catherineberg, the governor's official residence.
The amount approved for the Catherineberg repairs was scaled back from the $500,000 originally requested by Gov. Turnbull, because authority representatives said there was no money left in an unspecified PFA account to cover new improvements which include: transition of the estate's carriage house into a welcoming center for cabinet members, the upgrading of railings, the repaving or retiling of certain areas, and connecting the property to the island's sewage system.
Gov. Turnbull said $50,000 would be used to pay the contractor for work already completed on the project.
While board members acted favorably on the $100,000 request, Commissioner Turnbull said an itemized list of the repairs should have been submitted to the board prior to Wednesday's meeting.
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