St. Croix’s Marriott Renaissance Carambola Beach Resort has come up short on some recent interest payments on a 2009 $15 million V.I. Government Employees’ Retirement System loan and is talking with GERS about how to move forward, sources close to Carambola and GERS confirmed Wednesday.
"I don’t know that any month has seen total nonpayment," said Tom Bolt, an attorney representing Carambola, Wednesday evening. Bolt and Carambola officials met with GERS officials and board of trustees Wednesday afternoon to discuss the situation.
"One of the things we discussed is the hotel is doing better than it did last year," Bolt said. One of the challenges facing Carambola is finishing renovations on all its rooms so it can maximize its potential revenues, Bolt said. There are about 48 rooms to go, he said.
"It is important to the operational and financial viability of the resort that those be completed in short order because we could rent more rooms if we had more, completely renovated rooms," he said.
In March, when GERS extended Carambola a 90-day $736,000 loan to complete renovations, 54 rooms were still to be completed. When done, there should be 156 luxury suites at Carambola, resort officials said last year.
Reached at GERS’ St. Croix offices Wednesday, GERS Board of Trustees Chairman Vincent Liger said he would not comment on the matter until after a special board meeting on St. Croix Thursday morning. Messages were left with GERS Administrator Austin Nibbs for comment but had not been returned as of 8 p.m. Wednesday.
In Senate testimony Tuesday, Nibbs said Carambola had received $2.1 million in interest payments on the $15 million loan to date. A portion of the loan was set aside to make initial interest payments. But that reserve is now exhausted, Bolt said Wednesday.
In December 2009, GERS closed on the $15 million, five-year loan to Carambola, with $8.2 million dedicated to purchase existing bank loans and judgments and pay off liens and closing costs, and the rest for renovating the property to meet Marriott standards. Payments are annual, at an interest rate of 10.5 percent.
The hotel employs about 130 people on St. Croix, according to information released by Carambola when it joined the Marriott label in 2010. Larry Vaughn is the principal investor.
