Public Finance Authority Hears Proposals to Help Revitalize St. Croix

Nov. 8, 2007 — Creating a seafood farming industry on St. Croix that generates up to 300 local jobs and spins off 3,000 restaurants around the nation was one of three funding proposals before the Public Finance Authority Thursday.
Crucian Holdings asked the PFA for $47.5 million in tax-exempt private activity bonds — federal funds designated for use by the private sector to benefit community interest. The company would use the money to develop 130 acres of shrimp and tilapia ponds in the Williams Delight neighborhood on St. Croix. The ponds would supply seafood to Crucian Cafe, a planned franchise of 3,000 restaurants to be constructed in cities across the mainland.
The franchise would put St. Croix on the tourism map without costing the territory a penny, according to Richard P. Bourne-Vanneck, attorney for Crucian Holdings.
"We project approximately $80 million worth of advertising dollars spent over a 10-year period to promote St. Croix through the Crucian Cafe name, theme and design of the whole restaurant," Bourne-Vanneck said. "It's an extraordinary visibility boost to brand St. Croix, and puts it in every city in the country."
Each restaurant would include 150 square feet of "marketplace floor space" dedicated to selling locally produced culinary products like hot sauce or honey, according to Peter M. Conforto, CEO and president of Crucian Holdings. "Everything inside that restaurant would be Crucian — from culinary arts to flavorings to seasonings, and there's the potential of Cruzan rum and a Cruzan bar."
Supplying the franchise — once the local farming operation reached maximum capacity — would be 17 million pounds of shrimp and tilapia a year, harvested by a workforce of 300 people, according to Conforto. The plan projects that 35 to 60 percent of the workforce would live close to the proposed Williams Delight location of the ponds. "They could walk to work," he said.
The farm itself would produce organic seafood based on sustainable models of agriculture, piping in seawater through public easements and producing no effluent, Conforto explained.
PFA Executive Director Julito Francis acknowledged the proposal was a compelling one, but added, "They're asking for 100 percent financing."
An elite group of seafood farming and restaurant-industry experts hired by Crucian Holdings crafted the plan, which cost the company $2 million to develop, Bourne-Vanneck said. The request for 100 percent of the funding to implement the plan is based on the challenge of raising investment capital for St. Croix branding, he said.
Meetings began this summer with members of the deJongh administration, including representatives from the departments of tourism and agriculture, and representatives from the University of the Virgin Islands, Bourne-Vanneck said, with a goal of selling the plan in advance of Thursday's formal funding request.
Another proposed boost to St. Croix tourism was outlined by the New Image Foundation, which seeks $1.2 million in private-activity bonds to help finance a $7.5 million complex called the Country Center. The four-building complex, totaling 75,000 square feet, would be located on 9.9 acres of land and feature commercial tenants, light assembly, retail and office space.
The center would be a hub for tourists, featuring local artisans making and selling their crafts, food and other items, as well as a museum and open-air market, said New Image Foundation's CEO and president, Cynthia Jerry. In addition, there would be space for incubator services such as career-based training programs, graduate-education degree preparation, computer skills training and other services of benefit to people with low to moderate incomes.
Construction would begin in the spring of 2008 if financing can be secured, Jerry said. "We're still working on getting financing, but at this point we feel we have potential investors that would be sufficient for the project as long as everyone is on board," she said.
Finally, Hovensa Vice President Alexander A. Moorhead appealed to the PFA to allocate all its available private-activity bonds for 2007 and 2008 to the refinery to help defray construction costs of facilities for solid-waste processing and disposal and wastewater treatment. The PFA can allocate up to $53 million annually in said bonds.
Francis said he plans to review funding requests for private-activity bonds made at the last PFA meeting, as well as the three new ones pitched Thursday and will present recommendations to the PFA board at its December meeting.
In addition to entertaining funding proposals through private-activity bonds, the PFA authorized $5 million worth of borrowing for the St. Thomas Library project through the Economic Development Authority. The project stalled earlier this year when costs escalated beyond the $11.3 million projected cost.
Meanwhile, the Department of Planning and Natural Resources isn't giving the green light to the opening of the Kings Alley Hotel until kitchen renovations are complete. The PFA approved the spending of $200,000 to complete the renovations, and said the facility should open by the end of the month.
Francis said he cannot find a copy of the restaurant lease agreement with businessman Frank Pollara, executed under the previous administration, which would clarify who's responsible for absorbing the costs of the renovation. Consequently, he said, the PFA has no choice but to assume the burden to ensure the project's completion.
Barring any acceptable purchase offers on the hotel, the PFA is reviewing proposals from management companies to take over operations at Kings Alley.
A proposal by Sea Flight Airlines to lease the Kings Alley pier for seaplane landings in the Christiansted harbor was tabled pending further consultation with the Department of Planning and Natural Resources, which raised concerns about congestion in the harbor and safety issues. The PFA said the company would likely have to secure a Conservation Zone Management permit to support its plan.
In other action:
— The PFA board asked Francis to reach out to the eight companies that have bid on a $32 million construction project for a convention center on St. Croix, and clarify details of their plans in order to present a recommendation at the December board meeting. The companies are: Annaly Bay Resorts, Betty's Hope Development Association, Carambola Beach Resort, Divi Carina Bay, Paul Golden, Robin Bay Realty, Sonnenblick St. Croix and William and Punch;
— The Department of Education received permission to reallocate funding to needed projects at Charlotte Amalie High School and John H. Woodson Junior High School; and
— A $5.7 million PFA budget for 2008 was approved, which represents a 19 percent increase over last year's spending. The increase would have been just over five percent, except the authority needed to upgrade its revenue-management software, Francis said.
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