The 20-unit apartment building is undergoing renovations, including the installation of air-conditioning to accommodate short-term guests and long-term tenants.
Caneel Bay enters into long term lease for complex
The 20-unit Cruz Bay Apartments, the first federally-regulated apartment development on St. John, is being converted to market-rate, short-term and long-term rental by their new owner, CBI Inc., the owners of Caneel Bay Resort.
The four-building apartment complex, which is located behind the Virgin Islands National Park Visitors Center in Cruz Bay at the start of the VINP trail to Honeymoon Beach and Caneel Bay, features six one-bedroom and 14 two-bedroom residences.
CBI Acquisitions, LLC, has entered into a long-term lease for the property which adjoins the Caneel Bay Resort managers’ apartment buildings just outside the entrance to the VINP opposite the Mongoose Junction commercial center, according to CBI spokesperson Patrick Kidd.
“CBI Acquisitions, LLC is delighted to further grow its interests in St. John and the US. Virgin Islands” Kidd told St. John Tradewinds.
Renovations Are Underway
Renovations already are underway on the four buildings, Kidd added.
“We are undertaking a complete renovation of the interiors including new bathrooms, new kitchens, new fixtures and fittings and the installation of air-conditioning” said Kidd, who did not have a cost estimate for the conversion. “Renovations are expected to be completed by the end of this summer.”
“Upon completion of the renovations, the apartments will be available to anyone who fulfills our renter’s agreement,” Kidd said of the units to be available for long-term rental. CBI will not be offering its employees priority in leasing those units, he added.
Four Units Will Be Short-term Rentals
The units in the Cruz Bay apartments will operate primarily as leased units for probably one year periods and several will be rented on a weekly basis as vacation apartments, Kidd added.
“Four of the two-bedroom units will be available for weekly vacation rentals and we will be launching a web site detailing those weekly rates in the near future,” he explained. “We believe that this new enterprise will help us attract greater numbers of visitors to this destination and the hope is that this will in-turn give more business to the local traders in Cruz Bay and around the island.”
Lease Purchased from Property Owner
There was “no purchase of the property itself” in CBI’s acquisition of the land lease, according to Kidd. The property under the lease is owned by a group of private investors in the states, he added.
When it was constructed in the 1980s, construction of the complex was partially financed through a U.S. Department of Agriculture Rural Development Loan which required the complex be rented as federally-regulated low income units.
In preparation for selling the property, Virginia-based owner Thomas Runquist began the process of paying off the USDA mortgage in 2008 and a series of appraisals were conducted to determine the property’s value for early payment of the loan.
Low Income Requirements Dropped
Once a value was agreed upon by USDA RD officials and the property owner, the property was advertised for sale to non-profit companies with its USDA RD mortgage in an effort to keep it as low income housing, accordance with USDA RD rules.
The complex had been offered for sale in 2009 with its existing federally-subsidized mortgage loan in place with a “minimal acceptable bid” of $3,800,000 according to advertisements in St. John Tradewinds at the time.
The owner subsequently was allowed to pre-pay the USDA RD loan when no buyers had expressed an interest in the property after six months, and all federal low-income regulations then were rescinded in accordance with the terms of the original loan.
The terms of the lease to CBI are not available to the public, but Kidd said the ads placed in St. John Tradewinds — would outline the essence of the agreement.
Since the construction of Cruz Bay Apartments, two other federally-subsidized housing projects have been built on St. John in Bellevue outside Cruz Bay and in Calabash Boom on the east end of the island.
Anybody wishing to inquire further about renting a unit on a weekly or long-term basis is welcome to contact Kidd at patrick.kidd@caneelbay.com.
