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HomeNewsArchivesGovernment to Increase Vitelco's Rent 3,600 Percent

Government to Increase Vitelco's Rent 3,600 Percent

May 4, 2009 — The Department of Property and Procurement has negotiated a new lease for Vitelco's communications hub in Christiansted, bringing rent for the phone company up to market rates for the first time.
Vitelco has rented the building at Nos. 9 and 10 King Street since 1960, Property and Procurement Commissioner Lynn Millin-Maduro told the Senate Committee on Appropriations and Budget Monday in Frederiksted.
"Over the past 40 years, the lease agreement with (Vitelco) has remained the same without any changes in the rental obligations," Millin-Maduro said. Vitelco had paid rent of $200 a month, or $2,400 a year, since 1960. The lease expired in 2001 and Property and Procurement began negotiating a market-based rent in 2006, she said. The new rent is $86,000 a year, a 36-fold increase.
The new lease agreement between Property and Procurement and Vitelco calls for a 25-year lease with the option to renew for five years at a time for another 25 years. Rent is fixed for the first five years, then adjusted for inflation thereafter.
As the main switching center on St. Croix, all telephone calls that originate or terminate in St. Croix go through the Christiansted building via fiber-optic cable and microwave radio. This hub currently averages about 600,000 calls per day, not counting Internet traffic.
"What is the market price per square foot for rental property?" Sen. Terrence "Positive" Nelson asked.
"It is between $9 and $15 per square foot," Millin-Maduro said. "We are getting $11 on this new lease."
Vitelco is responsible for all repairs or renovations. The government does no upkeep or maintenance on the property, renting it essentially as unimproved land, Millin-Maduro said.
"The government is not entertaining any repairs," she said. "Because if Vitelco were renting from a commercial Realtor, they would be paying as much as $27 a square foot."
The committee voted without dissent to send the lease out of committee, moving it closer to final passage by the full Senate. Voting yea were Nelson and Sens. Louis Hill, Sammuel Sanes, Patrick Sprauve and Carlton "Ital" Dowe. Sens. Craig Barshinger and Wayne James were absent. Two non-committee members, Sens. Nereida "Nellie" O'Reilly and Usie Richards, also attended.
The committee also approved and sent out of committee a federal grant application for $600,000 to the Law Enforcement Planning Commission from the U.S. Department of Justice for victims of domestic violence, sexual assault, stalking and similar situations. These Violence Against Women formula grants are given annually and are distributed by the LEPC to an array of organizations, from Legal Services to the Women's Coalition of St. Croix, who provide the services the grant is meant to support. The committee approved the measure without dissent, with the same votes, attendance and absences as with the Vitelco lease.
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