June 17, 2008 — With an eye toward increasing hotel capacity on St. Croix, Gov. John deJongh Jr. met with U.S. Small Business Administration officials in Washington, D.C., and talked about the status of the SBA's 50-percent interest in St. Croix's Hotel on the Cay.
"The strategic location of this property and the government's underlying ownership of the property requires that we consider the long-term use of the property, especially as we focus on the revitalization of downtown Christiansted," deJongh said in a news release issued by Government House. "This requires that we be proactive and not reactive to those that will want us to partner with them."
The V.I. government owns the cay and leased it to a developer, which built its hotel and time-share units. The SBA gained title to a portion of the time-share units and hotel after a development corporation defaulted on a loan in the 1990s. The V.I. government challenged the SBA's claim, asserting its own claim against unsold time shares because of nonpayment of rent and taxes. But in April 2007, the U.S. Third Circuit Court of Appeals upheld the SBA's receivership, while affirming a portion of the government's monetary claim.
The governor said the government is interested in the long-term future and development of the property. Under the present ownership arrangement, the hotel has not been modernized, nor has it kept pace with changes in the hotel industry, according to the news release.
"The government's move to have active discussions with SBA comes as part of the administration's efforts to increase hotel rooms in St. Croix and as we focus on St. Croix brand," deJongh said.
The disposition of the property will be determined by the courts, deJongh said, so he does not expect immediate results. But his administration continues to push for a final resolution that will allow the hotel to be modernized and perhaps expanded.
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