GERS, WICO still arguing over Havensight Mall
Published: March 21, 2014
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ST. THOMAS - Despite the fact that the West Indian Co. and the territory's retirement system are negotiating a new contract for the management of Havensight Mall, the two agencies still are arguing over the existing contract.
During a meeting Thursday of the Government Employees' Retirement System board, GERS Administrator Austin Nibbs read a letter from WICO President and Chief Executive Officer Joseph Boschulte into the record.
Boschulte is asking for $2.1 million in allotments for Fiscal Years 2012, 2013 and 2014.
WICO owned Havensight Mall until 1993, when it was sold to GERS. WICO has managed the property ever since under a management contract that typically is renewed every five years.
In 2009, GERS put the management contract out to bid, causing strife between the two agencies.
Since then, no long-term deal has been reached, and WICO has continued to manage the property on a month-to-month contract.
Last month, the GERS board decided on the terms of a new management contract with WICO.
The contract will give WICO a 6 percent management fee for a term of five years. That means WICO will keep 6 percent of the mall's gross profits from rental income, an increase from 4 percent under the old contract.
However, WICO has not yet signed the new agreement.
Boschulte told The Daily News on Thursday that they still are in negotiations over the terms of the agreement.
Until the new agreement is signed, the management of Havensight Mall still falls under the old agreement.
Boschulte said the existing agreement is based on the last approved budget, the FY 2010 budget.
"We manage based on the current agreement that allows for WICO to recover funds used in managing the mall," he said. "If we fix a road or roof, and we spend our capital, the agreement says we get reimbursed for our monies."
Under the existing agreement, the salaries of a number of WICO employees are paid by GERS because their primary duties are to take care of or secure the retirement system's property - Havensight Mall. Some of those salaries are included in the $2.1 million Boschulte said GERS owes WICO.
However, Nibbs said Thursday that WICO submitted a FY 2013 budget that was $1 million less than the FY 2010 budget, therefore he believes less money should be paid to WICO.
"We're not in agreement with Mr. Boschulte," Nibbs told the board.
Board members suggested that Nibbs set up a meeting with Boschulte to respond to his letter and address the issue in person.
In other business Thursday, the board:
- Accepted the recommendation of Meketa Investment Group to contract with five Small Cap Managers, funding four of them - Channing Capital Management, Cove Street Capital, Kayne Anderson Rudnick and Granite Investment Partners - and holding off on one, Osmium Partners, until that manager has satisfied the employee and officers insurance requirements.
- Changed the venue of the August investment managers meeting from St. Croix to St. John. The board also changed the location of its annual retreat, scheduled for June, from St. John to the British Virgin Islands. Nibbs said going somewhere outside the territory for the retreat will force board members to show up and stay focused.
- Contact reporter Aldeth Lewin at 714-9111 or email email@example.com.