Thatch Cay owners win permit appeal

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ST. THOMAS - The Board of Land Use Appeals voted Wednesday to reinstate and extend an expired Coastal Zone Management permit for the development of Thatch Cay.

The board also approved a permit modification that had never been heard publicly or voted on by the St. Thomas CZM Committee.

In December 2012, the St. Thomas CZM Committee conducted a decision meeting regarding Thatch Cay. The owners of the small offshore island were seeking an extension for the permit as well as a modification to the permit.

The owners said the modification - which will remove one of the docks, allow for 270 corals to be relocated and modify the construction-barge landing to reduce impact on corals in the area - is needed to help obtain the federal permits that would allow construction to proceed.

The way the CZM committee meetings are conducted, each item is considered separately in its own hearing, and the committee may hold several meetings in one night.

The current owners of Thatch Cay have been working to develop the rocky 230-acre island for about 11 years. The most recent CZM permit was approved in 2009. One of the conditions of the permit - as of all permits issued by the CZM Division - is that if ground is not broken on the project within one year, the developer must return to the committee for an extension.

The owners, Thatch Cay LLC, asked for and received extensions in 2010 and in 2011, saying that they were unable to secure the federal permits necessary to start the project. In March 2012, the owners filed a third request for an extension, as well as an application for a modification to the permit.

On Dec. 20, 2012, the committee first heard the owners' argument for extending the permit, and in a 3-2 vote, denied the extension.

That made the request for a modification to the permit moot, and the meeting was adjourned without hearing a staff recommendation on the modification request.

At Wednesday's Bureau of Land Use Appeals hearing, CZM Division Director Jean-Pierre Oriol questioned the board's decision to allow the modifications to the Thatch Cay permit.

"You cannot modify a permit that no longer exists," he said.

Attorney George Dudley, representing the father and son owners of the property, Isaac and Mateo Levy, made the argument to the appellate board that the application was one document with two parts - the extension and the modification.

Dudley said the appeal filed with the Board of Land Use Appeals was for both and that the board has the authority to reverse the denial of the extension and approve the modification to the permit.

"Just because they made a decision in one does not negate the fact that the application has two parts," Dudley said.

Oriol objected and said the Board of Land Use Appeals can only consider an appeal of the action taken by the CZM committee.

The only action taken was on the extension, not the modification.

Board member Jose Penn said, "There is no way I would vote on the modification issue, as I have not reviewed it."

Board member Roberto Cintron shared Penn's sentiment, saying he also did not feel comfortable making a decision on the modification because the CZM Division staff recommendation was never made a part of the record.

Cintron tried to push Oriol to put his original recommendation on the record Wednesday, but Oriol refused, saying that his recommendation from 2012 would likely be different from a recommendation made in 2014.

For example, Oriol said, in those two years, the federal government has begun the process to list 66 new corals - seven of which are found in territorial waters - under the Endangered Species Act. Oriol said that information would impact his recommendation, and without doing research and drafting a new recommendation, he said he would not feel comfortable making a recommendation to the appellate board at Wednesday's hearing.

Board member Fred Vialet pointed to a letter dated Jan. 13, 2013, from St. Thomas CZM Committee chairman Austin Monsanto that stated that the request for extension and modification was denied by the committee.

That is evidence that the two items are linked, and therefore the appellate board could decide on both, Vialet said.

Oriol said the letter should not have included language about the modification, that it was a mistake, and the transcripts of the Dec. 20 meeting show that the modification was never considered.

Board members decided to rely on the letter and voted unanimously to reverse the extension - effective from the date the resolution is signed by the board chairperson - and approved the modification to the permit.

Oriol said the modification to the permit may have been required by the Army Corps of Engineers in 2012, but chances are the federal agency would have new requirements now.

It is likely that the modification approved Wednesday will not be enough to get the federal permit, and the owner will have to come back to the St. Thomas CZM committee for additional permit modifications, Oriol said.

The owners plan to build 101 homes and 24 support buildings on the island. The project includes a community center, clubhouses, a yoga pavilion, spa, two dining areas, two tennis courts, sewage treatment plants, a reverse osmosis plant, generators, a 21-slip dock, 25 boat moorings and a helicopter landing area. Many members of the community have opposed the project for years, citing concerns about protecting the environment.

Thatch Cay owner Mateo Levy said in a written statement that he is appreciative of the board for allowing the project to move forward.

"We are very excited to continue working with world class environmental agencies, developers and the local community to deliver a one-of-a-kind experience to the USVI. We look forward to partnering in the economic impact and long term success Thatch Cay can bring to the territory," he said. "We have and will continue to promote and bring economic stimulus to this beautiful territory."

Board members voting in favor of the extension and modification were Cintron, James Hindels, Nielsen, Penn, and Vialet.

Board chairman John Woods recused himself from the matter and was not present during the hearing. He is the owner of Jaredian Design Group, which has been hired by the Thatch Cay owners to assist in the development project.

Board member James Benton was absent from Wednesday's hearing.

- Contact reporter Aldeth Lewin at 714-9111 or email

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