At a special meeting of the Government Employees’ Retirement System Board of Trustees on Monday the board voted to end discussions with development company Red Legacy LLC over a proposed joint venture that would have reimagined GERS’s Havensight Mall property as an outlet mall.
GERS Administrator Austin L. Nibbs recommended that discussions with Red Legacy be suspended permanently, although a motion raised by board member Carol Callwood softened that action to “putting talks on hold.”
Callwood said she liked many of elements of Red Legacy’s proposal, which was brought to GERS in October 2015. She said it was likely to attract more local shoppers, overnight visitors and regional traffic than the existing mall.
“I can see a hybrid plan for Havensight because of the need for things that will generate money other than through cruise passengers,” she said.
Callwood initially raised concerns during meetings with Red Legacy over the fact that the nature of their proposal obligated GERS to contribute its Havensight Mall property as equity in the venture. If the project failed, the system stood to lose the property.
Nibbs agreed that that sort of investment was too risky for the struggling retirement system, which without a large infusion of cash, and aggressive and politically-unpopular reforms, is projected to go broke in less than a decade.
Nibbs said his “apprehension about the future of GERS going forward,” coupled with months of due diligence that concluded that Red Legacy’s proposal was not the best fit for Havensight Mall, lead him to recommend ending discussions with the developer.
Both Callwood and board member Michael McDonald said that they thought it would be prudent to keep the Red Legacy venture in mind for a future point in time when GERS’s financial outlook is “looking up.”
“I’m more inclined to a temporary suspension up until the date of financial stability. We wouldn’t be stringing them along, nor would we be totally cutting them off,” Callwood said.
But according to Nibbs, given GERS’s trajectory and the financial realities of the territory, it is likely that the system will be forced to remain on a path of liquidating its assets for the foreseeable future in order to meet its obligations.
“Say for instance the ‘looking up’ is not there, would you change your position of being so overly optimistic?” asked Nibbs. “I’m optimistic too, but I need to see something from the plan sponsor.”
“My optimism goes until the bottom drops out,” Callwood replied.
Nibbs said that if the system were to choose to incorporate some of the aspects of the Red Legacy venture into a “hybrid” plan for the mall, as Callwood suggested doing, it could do so on its own.
“We can probably do it cheaper and we wouldn’t be standing to lose the property,” he said.
Nibbs recommended to the board that GERS instead focus on its refurbishment and beautification of Havensight Mall, a partnership with the West Indian Company Limited, the property’s manager.
In his 2016 State of the Territory Address, Gov. Kenneth E. Mapp called for a "complete re-branding, rebuilding and reinvigorating" of Havensight Shopping Mall, calling it an “out of date, stale shopping experience.”
Mapp directed GERS and WICO to work together on that refurbishment, although until Monday the Red Legacy proposal remained an unresolved factor in GERS’s plans to invest more in the current mall.
Monday’s motion to temporarily suspend talks with Red Legacy LLC received yes votes from the five board members in attendance: Callwood, McDonald, Desmond Maynard, Board Vice-Chairman Edgar Ross and Chairman Wilbur Callender. Leona Smith and Vincent Liger were absent.