March 15, 2007 — The diversion of cruise ships from the West Indian Co. Ltd. (WICO) dock to Crown Bay will result in fewer passenger visits to Havensight Mall during the upcoming year, according to Gershwain A. Sprauve, WICO's corporate secretary.
On Thursday, Sprauve asked the Government Employees Retirement System's Board of Trustees to step in and address the situation, which has fueled an ongoing battle between WICO and the V.I. Port Authority (VIPA).
Sprauve's presentation comes in the middle of a three-day board meeting called by GERS to receive status updates from companies responsible for managing the agency's investment portfolio, a diverse spread of stocks, bonds and real estate ventures.
Sprauve explained that Havensight Mall, which is owned by GERS and managed by WICO, continued to pull in about $3.5 million for the agency during 2006, due to stable cruise ship activity and retail sales.
However, Sprauve explained that agreements struck between VIPA and two premiere cruise lines — Princess Cruises and the Holland America Line — will result in the loss of 74 cruise ship calls during 2007, which may soon begin to negatively impact GERS if ships continue to turn to Crown Bay. Revenue turned over to GERS comes directly from rent paid by Havensight merchants, who have recently begun to express concerns about the reduction in passenger visits, he said.
To illustrate his point, Sprauve showed board members a letter written by one Havensight merchant requesting a reduction in rent due to the anticipated lag in cruise ship activity. The merchant also asked that GERS relax certain restrictions included in the rental agreement, which stipulates that Havensight businesses remain open during the week.
"To this point, we have not agreed to the request," Sprauve said. "But several of the businesses have been up in arms because of the situation with Crown Bay."
Sprauve also said that VIPA, in an effort to increase its revenue, is also taking a larger share of the per passenger fees paid by cruise ships after entering the Charlotte Amalie Harbor. He explained that VIPA, charged with managing local ports, used to levy a $7.50 per-passenger fee for ships berthing at the Havensight dock — of that amount, $3.50 would be passed onto WICO, while $4 would go to VIPA.
After striking an exclusive agreement with Princess Cruise Lines, however, VIPA began to take a larger share of the per-passenger fees from ships docking at Havensight, Sprauve said. "We believe that this is a clear violation of the Federal Shipping Act, and we are asking for your help in resolving the situation," he told board members.
Sprauve presented a letter written last year to GERS' former board chairman Carver Farrow, expressing WICO's concerns about VIPA and the Crown Bay dock. In his reply, Farrow said that GERS would not be offering its assistance, since the conflict between the two entities is a matter of "competition." In hopes of finding a solution, WICO subsequently turned to the Federal Maritime Commission, asking the entity to mediate the dispute.
On Thursday, however, Farrow said GERS needs to play a part in resolving the matter, since Havensight tenants are being affected. "It's clear that you guys can't resolve the issue by yourselves," he said, adding that representatives from GERS, WICO and VIPA should talk over the dispute with Gov. John deJongh Jr.
In his State of the Territory address, deJongh indicated that he was aware of the problem and expressed concern that two local government entities would ask for federal intervention.
GERS board members on Thursday expressed similar sentiments. "I really don't think two government entities should be fighting like this," said GERS trustee Leona Smith. "It's clear that something really has to be done."
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