A 30-year lease allowing Lovango Resort and Beach Club to redevelop a waterfront property in Red Hook advanced Tuesday, with the company planning approximately $3 million in improvements, including a rebuilt dock, ferry landing, receiving terminal and facilities to support its operations on Lovango Cay.
Bill 36-0357, approved by the Senate Committee on Budget, Appropriations and Finance, would authorize Lovango Islands Holding, LLP to lease approximately 12,600 square feet of government-owned property at Parcel No. 100-1, Estate Nazareth, in the Red Hook Quarter of St. Thomas.
The agreement permits the company to operate passenger and freight terminals, a marina ferry landing, retail offices, laundry facilities, parking, staff housing and other support services. The initial lease term is 30 years, with options for two additional 10-year renewals.
Under the agreement, annual rent is set at $60,000, payable in monthly installments of $5,000. However, Lovango may elect to pay a reduced rate of $2,000 per month during construction, with the concession lasting up to 60 months or until construction is completed, whichever occurs first.
Beginning after the tenth year of the lease, rent would be adjusted annually according to increases in the Consumer Price Index, with each adjustment capped at 3 percent. The agreement also includes provisions for government compensation if the company subleases portions of the property.
Lovango Plans $3 Million in Waterfront Improvements
Mark Snider, representing Lovango Resort and Beach Club, told lawmakers that the resort's location on Lovango Cay, off St. John, makes reliable transportation and cargo handling facilities essential to its operations.
According to Mr. Snider, the resort has “needed a receiving and logistical facility, wharf, and home base location for some time.” He described the Red Hook lease as “an integral part of the entire Lovango operation.”
Mr. Snider explained that most of the resort's employees live on St. Thomas and commute to Lovango Cay. The proposed facility would provide parking and a more convenient departure point for employees traveling to work.
The location would also improve the resort's handling of supplies. Mr. Snider said the company's barge frequently spends hours waiting at the Red Hook car barge landing for delayed shipments, creating additional labor expenses and disrupting deliveries.
With a dedicated receiving terminal, Lovango would be able to store supplies at the Red Hook location and schedule barge operations when needed, “reducing wasteful time and congestion,” he said.
The proposed improvements include rebuilding the existing dock, demolishing wooden structures, constructing passenger reception and freight support facilities, and providing employee accommodations. Landscaping, fencing and lighting improvements are also planned.
Lovango intends to rebuild the dock within its existing dimensions of approximately 216 feet long and seven feet wide, with four additional finger piers creating a small marina.
The agreement also provides for the V.I. Police Department, Department of Planning and Natural Resources and first responders to use the pier, provided their activities do not interfere with the resort's operations.
Reduced Rent and Construction Timeline Draw Questions
Vincent Richards, assistant commissioner at the Department of Property and Procurement, urged lawmakers to support the lease, arguing that the proposed improvements would substantially increase the value and usefulness of the government-owned property.
Responding to Senator Milton Potter, Mr. Richards acknowledged that the reduced monthly rent of $2,000 was requested by Lovango and that the department had agreed to the arrangement.
“When this $3 million is invested in the property, the property is going to be valued much more than $3 million,” Mr. Richards said.
He also argued that the improvements would enhance the waterfront and the appearance of the property, which sits across from Ivanna Eudora Kean High School.
Senator Dwayne DeGraff raised concerns about the possible effects of construction on nearby students. The Lovango team anticipates undertaking the work in phases, with the first phase planned from January through July.
Mr. DeGraff suggested adjusting the schedule to concentrate construction activity closer to the summer months, when classes would be less likely to be disrupted.
Environmental considerations were also discussed, particularly the mangroves surrounding portions of the property.
Mr. Snider pledged that Lovango would be “very careful” around the mangroves, while DPNR Commissioner Jean-Pierre Oriol explained that trimming mangrove branches would be permitted.
Responding to Senator Kurt Vialet, Mr. Snider also said the company would be prepared to dredge around the dock if necessary. He further expressed willingness to remove abandoned vessels in the area, although that work is not included in the lease agreement.
The waterfront construction remains subject to Coastal Zone Management permitting requirements, with the necessary approvals to be obtained before work begins.
Bill 36-0357 now advances to the Committee on Rules and Judiciary for further consideration.
