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Tuesday, February 27, 2024
HomeNewsArchivesGERS Starts Sale Process for Carambola Beach Resort

GERS Starts Sale Process for Carambola Beach Resort

The V.I. Government Employee Retirement System Board of Trustees voted to sell Carambola Beach Resort and to publish an invitation for bids for the resort in executive session at a special meeting of the board Friday.

The pension system has owned Carambola since 2012, when its previous owners defaulted on a $15 million GERS loan (See related links below).

In 2009, GERS loaned Carambola $15 million on a 10-year note. GERS disbursed $8.5 million of that loan directly to Carambola’s creditors and another $3 million to Carambola to renovate its rooms, disbursing about $11.5 million in total. GERS received about $1.9 million in interest payments from a portion of the loan that was held in reserve, but the owners could not pay interest on the loan, even after reducing the rate, and GERS foreclosed in May of 2012.

GERS Administrator Austin Nibbs and members of the board of trustees have testified to the Legislature on several occasions that the property should eventually sell for the loan amount or much more, once economic conditions improve, based upon the underlying value of the land and buildings.

Since then, GERS has run the hotel through an appointed corporate board and has worked to complete renovations.

According to GERS Public Information Officer Lorraine Gumbs-Morton, the board also approved Friday a $1.5 million contract with Synergy Development Group to develop GERS property in Estates Nullyberg and Hoffman on St. Thomas.

GERS is planning a business center, hotel and convention center in the area. (See related links below) The contract is conditional on successfully rezoning the property and a positive feasibility study.

The proposed site for the development is 120 acres of land across from the Donoe Bypass, which runs all the way down to the Edith Williams Alternative School. GERS is proposing that 53.88 acres of land in Estate Hoffman be rezoned from A-1 (agriculture) to R-3 (medium-density) to allow for the hotel, conference and entertainment center, and a senior citizen home. It is also seeking a use variance for 66.7 acres in Nullyberg to allow construction on 105 single-family residential lots to be sold to GERS members.

In 2013, the trustees heard a presentation from Orbitel, which was seeking a GERS investment to use the new V.I. Next Generation Network broadband cables to compete with Innovative for cable television services and voted to consider Orbitel’s proposal. On Friday the trustees voted not to approve funding for the Orbitel alternative investment proposal, Gumbs-Morton said.

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