The territory’s first new hotel construction development project in 20 years will bring more than 700 permanent jobs to the Virgin Islands, along with more than $1 billion in “positive” economic growth over 15 years, officials said Wednesday.
During a press conference on St. Thomas, Gov. John deJongh Jr. and principals of Mandahl Bay Holdings officially signed agreements that would facilitate the development, which the governor said still has to go through Senate approval and Coastal Zone Management committee’s permit processes.
The Senate has to sign off on the lease for the property, which Property and Procurement Commissioner Lynn Millin-Maduro said is for a term of 99 years at $12,000 a year.
DeJongh made clear Wednesday that the lease takes over an original agreement executed by the Legislature in 1964 between the government and Hans Lollick Corp. and allows for the development of a marina, town center and housing community on about 24 acres of land. According to a Government House news release, the existing lease, also for 99 years, had 50 years remaining on it, but no specific timeframe for finishing the development.
“This time, we’ve made sure the project will be going through the necessary regulatory process,” deJongh said during the press conference. “The investment from the developer must be done within a certain amount of time, and that requirement for investment has been tightened so that we can also see a return on investment in a short amount of time.”
According to the agreement, Mandahl Bay Holdings – a subsidiary of New-York based Transcontinental Realty Investors – will invest $209 million during the first phase of the project, which includes the development of a Hyatt Regency Hotel, a 50-slip marina, private estates and marina townhouses and 48,000 square feet of retail and commercial space.
The second part of the project includes the expansion of the Mahogany Run Golf Course, which developer Karl Blaha said the company also closed on Wednesday. The expansion would include the construction of a conference center, ballroom, junior ballroom and additional meeting rooms, among other things.
Previous attempts to develop Mandahl Bay have been opposed by the local community, which has expressed concerns about the protection of marine and plant life in the area. A small group also attended Wednesday’s press conference.
Speaking to the concerns, Blaha said the group is committed to environmental protection and has put together a team that will “work closely” with CZM and other regulatory agencies to “do everything that’s necessary and possible to ensure that the development is environmentally sensitive and disturbs, in the least way possible, the natural flora and fauna of the area.”
Representing the developer, attorney George H.T. Dudley also said the company will be working with the Department of Labor to grow local jobs through training programs and will partner with the Economic Development Authority in providing opportunities to local small contractors.
DeJongh added Wednesday that islands throughout the Caribbean, from Antigua to St. Lucia, have also made similar investments in hotel development.
“We are getting the Virgin Islands to the position where we will be as competitive,” he said. “Our hotel accommodation stock has either gone down, or has remained stable, and now, we have the chance to grow it.”