St. John Tradewinds News

Change to 40-Year Lease for Caneel Seeks To Enable Upgrade for Resort

 

Caneel Bay Resort will continue its original vision of “low key luxury” for its future upgrades and renovations.

Caneel Bay Resort officials have major plans for refurbishing and upgrading the “grande dame” of Caribbean resorts – once they have negotiated a long-term lease with the National Park Service.

The corporate owners of the former Rockefeller Resort and the National Park Service are hoping an agreement can be reached on a lease of the island’s iconic Caneel Bay Resort to the current operators who hold a “Retained Use Estate” (RUE) agreement to operate the former Rockefeller resort which will benefit the resort, the park and the St. John community.

Major Plans for Improvements at Caneel
“If the 40-year lease is signed, we will have the opportunity to implement a program of improvements and renovations to the property through extensive capital investment,” explained Nikolay Hotze, Caneel Bay Resort Managing Director.

“Our main focus will be to update guest rooms and public areas to enhance overall guest experience, while maintaining the high service standard that Caneel Bay Resort has always had,” Hotze added.

“Our objective is to maintain the position of Caneel Bay —  and St. John — within the ever-increasingly competitive luxury market segment,” Caneel’s Hotze added.

“At the heart of any property renovations will be our commitment to continuing the original vision and lasting legacy of Laurance Rockefeller, along with our philosophy of providing low-key luxury in an environment that is refreshingly free of digital distractions,” the resort managing director added.

Long Negotiating Process
In 2008, a proposal was presented by CBI Acquisitions LLC doing business as Caneel Bay Resort to turn the 50-year Retained Use of Estate, RUE, agreement for the resort on National Park Service property, which is set to expire in 2023, into a 40-year lease.

There is an act before the U.S. Congress “to examine the possibility” of converting the RUE agreement, VINP Supt. Brian FitzGerald has explained in appearances before island groups in recent months.

If the conversion is approved by Congress, NPS officials will work with the CBI to negotiate the conversion of the former renowned Rockefeller Resort into a long-term lease, Supt. FitzGerald has said.

The proposed 40-year lease would prohibit expansion (of park boundaries) and prohibit expansion of guest facilities, VINP Supt. FitzGerald has explained.

“The negotiation started with our current owners’ purchase of Caneel Bay in 2004 and all the preliminary steps were completed accordingly (with the approval of Congress, a Senate Committee and ultimately the President signing the Bill),” Hotze explained.

“Since 2010 negotiations with the NPS agreed on the terms and conditions of a lease and we fully expect to conclude this process with the result of entering into a 40 year lease, which should occur sometime during the course of 2014,” Hotze continued.

Lease To Extended Retained Use Estate
In creating the V.I. National Park, Laurance Rockefeller included the approximately 150 acres containing the Caneel Bay Resort, but continued to operate the resort under the 50-year RUE.

The NPS had the option of leaving the RUE as it is and letting the lease expire and have Caneel Bay Resort become a concession, according to Supt. FitzGerald.

The NPS had the choice of “let time run its course or secure a lease which would benefit the park,” according to the superintendent.

“The preferred alternative is to enter into negotiations (for a lease),” Supt. FitzGerald said.

April Discussions Planned
NPS/VINP officials and representatives of Caneel Bay intend to sit down in April for face to face discussions, according to Supt. FitzGerald. The final document would go to Congress for authorization.

“We hope to start negotiations sometime in April,” Supt. FitzGerald said in January.

The V.I. National Park could still end up taking possession of Caneel Bay Resort upon the expiration of the current RUE, according to Supt. FitzGerald.

“This could still happen,” the superintendent said. “If the RUE expired, the cost of maintaining and upgrading the resort would fall on the park service.”

“There would be less money available for maintenance of historic resources,” Supt. FitzGerald said. “We’d be responsible for maintenance. We would not be able to do it.”

In addition, “concessions are run with less employees and those people are usually paid  less,” Supt. FitzGerald said, “Caneel requires a higher number of people.”

(CBI will be bidding on the V.I. National Park concessions for Trunk Bay and Cinnamon Bay when they go out to bid later this year, according to a spokesperson.)

Maintaining Caneel’s Luxury Market
“Throughout this process we have been and will continue to be in regular communication with the VINP to ensure that the interests of both the NPS and the local community on St. John are carefully considered,” said Hotze. “In the coming weeks, we look forward to finalizing a structure that is mutually agreeable to all parties concerned.”