On Nov. 14, 2019, the Virgin Islands Public Finance Authority (PFA) closed on a $12 million loan with FirstBank to refinance the outstanding balance on the Tax Increment Revenue Term Note, Series 2012, which was issued in connection with the development of the Island Crossings Shopping Center on St. Croix. Currently, Island Crossing Shopping Center’s sole tenant is the original anchor, Home Depot, under a 20-year lease. Home Depot began operations in September 2011.
In response to the dire economic downturn at that time, in 2008 the Virgin Islands Government enacted the Tax Increment Financing (TIF) legislation as an additional economic development tool. Under the TIF Act, the collection of 90 percent of gross receipts taxes and real estate tax increments are held in a TIF escrow account and may be used only to pay TIF qualified costs, including principal and interest payments on TIF financing.
The Virgin Islands Economic Development Authority certified the Caribbean Development Partners (CDP) Island Crossing Shopping Center site as the first TIF area and authorized up to $30 million in tax-exempt bonds to finance a portion of the costs of a +/- 42acre mixed-use sustainable development project to be constructed on the site.
In 2009, the first series of taxable bond anticipation notes were issued in the amount of $15.7 million from FirstBank and secured by 90 percent of gross receipts taxes and the incremental increase in real property taxes generated at the site. The original proceeds were used to develop Phase 1 of the Island Crossings Shopping Center Project. Then in 2012, the V.I. government converted the bond anticipation note for a term loan in the amount of $13.7 million whose maturity date had been extended to Nov. 15, 2019.
In 2013, Caribbean Development Partners secured low-income housing tax credits from the Virgin Islands Housing Finance Authority to finance the construction of the Sugar Mill Villas. Sugar Mill Villas constitutes 34 units of affordable, single-family homes located on the northwest portion of the Island Crossing Shopping Center site.
PFA Executive Director Kirk Callwood Sr., said, “While Island Crossings Shopping Center has been the only TIF development project since the legislation was enacted, I am certain that recent changes to the act will encourage other developers to utilize this tool for future economic development projects.”