GERS board votes to sell Carambola Beach Resort
Published: April 12, 2014
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ST. THOMAS - In a closed-door meeting Friday, the Government Employees Retirement System board voted to sell Carambola Beach Resort and Spa.
GERS has owned the Carambola for two years, following the hotel's default on a $15 million loan it had obtained from GERS in 2009. GERS took possession of the property on St. Croix's remote northwest shore in 2012.
On Friday, the board voted to put the resort up for sale, and directed the GERS staff to publish an invitation to bid for the sale of the Carambola Beach Resort.
GERS Administrator Austin Nibbs said the retirement system has received numerous offers on the property since taking it over in 2012.
"The last couple years we've been having monthly inquiries as to the purchase of the property," Nibbs said. "So, the board decided to put it to bid and see what we can get."
The original loan was to pay for a major upgrade to the rooms and some infrastructure improvements at the resort. In the two years the agency has owned Carambola, GERS has invested about $3 million in the property, Nibbs said.
The board conducted the majority of its business at Friday's special meeting in executive session, away from the public.
Board chairman Vincent Liger did not return calls to The Daily News seeking comment as to which exemptions to the V.I. Code's open meetings law the board invoked.
The board voted Friday not to fund a previously approved $19.5 million alternative investment in Orbitel, a new regional telecommunications company.
In November, the board approved making a $19.5 million investment in the company, but Nibbs said the board feels the retirement system is too close to the cap on alternative investments.
By law, the retirement system is allowed to invest up to 10 percent of its entire $1.3 billion portfolio in alternative investments.
"We're very close to that limit, and that's one of the reasons why," Nibbs said.
"The board is thinking that maybe we should suspend or put a moratorium on these type of projects for now," he said.
Orbitel, LLC is owned by St. Croix resident Todd Klindworth, who has based the company's headquarters on St. Croix. Orbitel will offer fiber-optic connectivity for homes and businesses to tap into the V.I. Next Generation Network's high-speed broadband network currently under construction.
The board approved a $1.5 million contract with Synergy Group, to be executed once the zoning has been changed on property GERS owns in Estate Hoffman and Nullyberg on St. Thomas.
Synergy Group will do an updated feasibility study and seek out financing options for any future development, Nibbs said.
The retirement system bought the 120-acre property in 2006 for $4.5 million. After a previous feasibility study was done, GERS planned a multi-use development to include a hotel, convention center, restaurant, office space, senior living facility and 105 single-family homes.
The rezoning requested is for Parcel A-1 and A-2 in Estates Hoffman and Nullyberg from A-1 (agriculture) to R-3 (residential medium density) with a use-variance to allow professional offices. The change would allow for the hotel and convention center.
In addition, Parcel A-Remainder in Estates Hoffman and Nullyberg would need to change from A-1 (agriculture) to R-2 (residential low density one and two family) to allow for single family home lots.
The 29th Legislature approved the changes, but the language that went to Gov. John deJongh Jr. for approval did not match the report from the V.I. Department of Planning and Natural Resources. DeJongh vetoed the measure in December 2012.
Nibbs said he has been working with the 30th Legislature to reintroduce the measure, and a hearing on the matter will be scheduled soon.
- Contact reporter Aldeth Lewin at 714-9111 or email firstname.lastname@example.org.