How we got here
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The V.I. government's plan to build a sports complex on St. Croix aims to draw top athletes and events to the island, pump money into the local economy, spur more development and fit St. Croix into the sports tourism niche.
The legislation to ratify a Memorandum of Agreement the governor signed with developers to create the $55 million complex of stadiums for baseball, aquatics, tennis and beach volleyball is on today's agenda of the V.I. Senate Rules and Judiciary Committee.
The entity that caught the government's eye to develop such a complex is GlobeVest LLC - a Colorado company with no track record of development projects.
GlobeVest LLC formed shortly before the V.I. government made a request for proposals for the redevelopment of the dilapidated Paul E. Joseph Stadium in Frederiksted.
What GlobeVest LLC does have is:
- A free, do-it-yourself, fill-in-the-blanks website.
- Office addresses in Colorado that are nothing more than a post office box number and a "virtual office" space.
- A president and chief executive officer, James K. Sutherland, who owes more than a quarter million dollars in delinquent child support payments; who has made questionable real estate deals that ended in his losing his house to foreclosure; and who inflated his resume with false claims to have played an important role with national political figures.
GlobeVest LLC brought two other stateside companies into the V.I. deal: National Swim Center Corp. and Network Sports Marketing, both of which also have principals with financial issues.
National Swim Center Corp.
National Swim Center Corp. formed in 2009 and has no track record of building and operating aquatics stadiums.
Its free do-it-yourself website displays photos, renderings and architectural drawings of state-of-the-art, Olympic-size swim stadiums - none of which it built.
The company has yet to start its first project.
The man Government House introduced to Virgin Islanders as National Swim Center Corp.'s chief financial officer is facing a multi-million dollar lien in Travis County, Texas, from a breach of contract lawsuit.
Three projects the National Swim Center Corp. pursued - one in Texas and two in Florida - all fell through under questioning by elected officials who ultimately voted not to deal with the company.
A lender also has filed an action for foreclosure against John McIlhargy, one of the directors of National Swim Center Corp.
Network Sports Marketing
After a deal between Network Sports Marketing and Nike USA went sour, Nike sued the company and its president, John Lehmann, for breach of contract, resulting in a lien against him and the company.
A lender also has filed an action for foreclosure against Lehmann.
The Daily News asked Gov. John deJongh Jr. on Friday about the project and the partners.
The governor claimed that the Memorandum of Agreement is designed to mitigate the government's risk.
"We don't go anywhere in terms of our financing until our private partners also show us they have the financing," he said.
The governor said that the long experience of GEC as a contractor in the territory gives him confidence in GlobeVest V.I.
GlobeVest V.I. is a joint venture between GlobeVest LLC and General Engineering Corporation, also known as GEC.
When asked what the government did to check the companies, DeJongh said he was not part of the selection process and does not get involved in doing background checks.
He referred the questions to Property and Procurement Commissioner Lynn Millin-Maduro.
Millin-Maduro did not answer Daily News calls or respond to messages Friday after the governor had deferred to her.
DeJongh did say that once the Memorandum of Agreement reached his level, he made inquiries to ensure that the entities had relationships with sports governing bodies and associations for tennis, swimming and volleyball.
He said that after the complex is built, the ability to operate the facilities and bring in tourism will be vital.
"The key is making sure we get the events," he said. "We needed the ability to know that we would have the traffic."
Secrecy and suspicion
From the beginning three years ago - when the deadline for responses to the Request for Proposals passed - the project dealings have been kept from public view.
None of the bids or other documentation of the RFP process were made public.
The first public hint that something was in the works for the sports complex came in January in deJongh's annual State of the Territory address.
Government House lifted the veil, a little, in February when the governor announced that a sports complex on the site of the Paul E. Joseph Stadium would be designed, built and managed by GlobeVest LLC and GEC.
That joint venture was incorporated as GlobeVest V.I.
As part of the deal, National Swim Center Corp. and Network Sports Marketing are supposed to obtain $25 million in private money, and the V.I. government will put in $30 million in taxpayers' money.
After the governor's announcement, Government House attempted to fast-track the project.
Legislation ratifying the Memorandum of Agreement was put on the agenda of two Senate committees and scheduled to go before the full Legislature for a vote - all to be accomplished in the space of one week in April.
That did not happen.
After six hours of testimony, the Senate's Human Services, Recreation and Sports Committee tabled the legislation in April and put it on the agenda for a public hearing in May.
Only two of the representatives from the GlobeVest V.I. group - Lehmann and John Wessel, managing partner of GEC - appeared at the May committee hearing, but the senators had numerous questions that required answers from GlobeVest V.I. principals who did not come to the hearing.
During testimony and questions, the senators expressed concerns about National Swim Center Corp.'s failed proposals in Texas and Florida and GlobeVest V.I.'s lack of a business plan.
Even so, the committee voted to move the legislation forward to the Rules Committee with a favorable recommendation.
Senators Alicia Hansen and Terrence Nelson voted yes.
Sen. Craig Barshinger abstained.
Committee Chairman Alvin Williams Jr. voted no.
Senators Shawn-Michael Malone and Patrick Simeon Sprauve were absent.
Committee vice-chairwoman Sen. Janette Millin Young boycotted the hearing, saying she objected to "back-room deals."
"We are talking about a decision to spend $30 million of the people's money at a time in which every single penny makes a substantial difference," she said. "Such a decision must be based on solid facts and good public policy, not backroom deals."