The operator of the tattered Caneel Bay Resort has hired a Washington lobbying firm with tight connections to President Trump/Carolyn Sugg via Flickr
Hoping a voice friendly to President Trump will be able to convince the Interior Department to extend its management of the Caneel Bay Resort for at least 60 years, CBI Acquisitions has retained a new lobbyist in Washington.
Ballard Partners, whose principal chaired Trump's organization in Florida for the 2016 election and was vice chairman of the president's inaugural committee, will work to get Interior to extend the current Retained Use Estate long past its current September 2023 end.
The future of the Caneel Bay Resort has been up in the air since 2010, when Congress directed the National Park Service to determine whether it made sense to convert the RUE to a more traditional concessions lease. Three years later, the Park Service, after studying which management approach made the most sense for the agency via an environmental assessment, recommended that the operating agreement be redefined as a long-term lease more in line with typical concessions agreements.
But negotiations between the Park Service and CBI's principal, Gary Engle, have failed to produce any concrete results; indeed, Engle told a House committee in 2018 that the talks never were substantive. CBI has maintained that an extension of at least 60 years is necessary to attract $100 million in capital to rebuild the resort.
National Parks Traveler continues to wait for the Park Service to completely fulfill Traveler's Freedom of Information Act request for details of those talks.
Back-to-back hurricanes in September 2017 largely destroyed the Caribbean resort's facilities, and while CBI received $32 million in insurance proceeds, it has not made any substantive efforts to rebuild. Instead, it has offered to walk away from the operation if the federal government would pay it $70 million and hold the company harmless for any environmental damage that might be on the resort's grounds.
Not only did hurricanes Irma and Maria heavily damage the Caneel Bay Resort, but they also exposed CBI to a $217,416 lawsuit brought by Bluewater Construction, of St. Thomas, stemming from 18 hotel rooms it built in the months leading up to the September 2017 storms but has yet to be paid for. Too, CBI was told early this year that the resort was “grossly underinsured.”
Court documents related to the Bluewater Construction case showed that CBI was underinsured by just about half of what it valued the resort at. CBI was successful in its $32 million claim for damages from Hurricane Irma, which struck on September 6, 2017. But when the company filed a similar $32 million claim for damage from Hurricane Maria, which struck less than two weeks later, Lloyds of London denied the claim on the grounds that the first claim covered the loss from both storms.
“There is no additional damage caused by Hurricane Maria that was not considered in the scope of damages from Hurricane Irma,” the claims management company noted in a September 2018 letter to Engle. In other words, the coverage for Irma would cover impacts from Maria, the claims firm concluded.
Laurance S. Rockefeller in 1956 donated the land on the island of St. John that today makes up Virgin Islands National Park. At the time, he held back a portion for the Caneel Bay Resort. In 1983, the Jackson Hole Preserve, which Rockefeller had established, donated the land to the park; but it came with the RUE agreement that gave the Preserve free use of the property and its facilities for 40 years. At the end of that four-decade period, September 2023, the RUE document dictated that the buildings and their improvements be donated to the Park Service.
CBI Acquisitions acquired the RUE in 2004.
When Rockefeller structured the RUE that allowed the Caneel Bay Resort to be operated for private profit, he inserted a provision into that document that required the resort operator to use and maintain the grounds in a way that is "consistent with the preservation of such outstanding scenic and other features of national significance, and preserve the Premises to the extent feasible in their natural condition for the public benefit, enjoyment, and inspiration..."
But according to initial documents Traveler obtained through its 2018 FOIA request, a 2014 environmental assessment of the Caneel Bay Resort property raised questions of contamination from SVOCs -- semivolatile organic compounds -- often related to pesticides, and arsenic.
"In addition, there are concerns for leachability of SVOCs, arsenic and mercury to groundwater," the report noted.
The surveys also found concentrations of total petroleum hydrocarbons and diesel range organics above acceptable levels set by the Virgin Islands Department of Planning and Natural Resources.
While the assessment called for more extensive testing to determine the extent of these contaminants -- both across the ground surface and to determine depth of contamination -- records Traveler obtained said CBI had refused to allow a contractor for the Park Service to access the grounds to perform further testing.
Since then, Park Service personnel have declined to discuss the status of the environmental condition of the property.
While Caneel Bay Resort remains in tatters, other Caribbean resorts that were damaged by Irma and Maria have rebuilt. A headline in the New York Times early this month noted that, "5 New Standout Resorts in the Caribbean | In the aftermath of hurricanes Irma and Maria, many hoteliers in the Caribbean have regrouped and rebuilt — and are ushering in a new age of hospitality."
Comments
PRIVATE NOTE TO NPT: I have been following this topic and Kurt Repanshek's reporting and comments with the assumption that a formal complaint has already been filed with the DOI OIG. I understand that there may be some reasons to avoid showing cards too soon and can also easily imagine that Greenblatt might be just sitting on such an existing complaint. However, the issue has already been publicized; there is some hope that there might be a new IG next spring; and neither Greenblatt nor his successor would be under any pressure to act until a formal complaint is pending. The last thing needed would be for CBI to get an extension; but, regardless of the delays due to a new contract being negotiated, the second to last thing needed would be for CBI, which has already revealed itself to not have the public's interests in mind, to be the concessionaire after the RUE expires. So, has a formal OIG complaint already been filed or does that need to be done and by whom at this point?
A long post with multiple bold and italic phrases definitely makes your point!
As with my own personal business interests, such as a leasing agent for one of our rental properties, rather than talking about what other businesses 'should' do, it's more important to understand what their incentives are, and hopefully make sure their incentives align with yours as much as possible.
Best of luck!
It is sad to see the hostages of local detracto shut down a place that has brought tens of thousands of people to St. John To hike, dine, shop and fall in love with the island.
One of the issues that could arise. Is the fact that in this contract from the Rockefellers to the national Park service. The owners of the property have the right to take the property back to its original state. Which means they would take that large catchment up in the hills apart and they would dismantle the entire resort. They have the right to do that if they so choose or they could turn the entire property over to the national Park service for them to take care of. I don't think national Park service has the resources to run a resort. it's very sad the property is beautiful the island is beautiful the people that live there are beautiful and I really enjoyed all the time that I spent there.
Kk, you're spreading a woefully confused, if not ignorant, interpretation of who the "owners of the property" actually are and what "rights" this Gary Engle has or doesn't have. And, as has been said recently, faux expertise is even worse than simple ignorance. So, let's look at the truth, which is that, because of his relationship with the organization then operating an existing resort at Caneel Bay, the late Laurance S. Rockefeller carved Caneel Bay out of what he originally gave the National Park Service (NPS) to create Virgin Islands National Park. However, instead of directly transferring any ownership right for Caneel Bay, he instead established, in 1983, a "Retained Use Estate" (RUE) providing for the continued operation of Caneel Bay, as a resort, for a period of not more than forty years as long as it was properly maintained in its natural condition and operated in ways that protected scenic and other features of national significance. The RUE very clearly states that, at the end of that forty years, Caneel Bay would be transferred to the NPS as part of Virgin Islands National Park.
So, in 2004, this Gary Engle character came into the picture. This is a guy who has operated, in different places and at different times, as a real estate speculator, leasing advisor, shipping investor, transportation and container broker, equipment reseller, and venture capitalist using a variety of fronts that have included Cobb Partners Development, Equis Corporation, PLM International, Capella Hotel Group, Semele Group, EHI Acquisitions, Stoneleigh Capital, and CBI Acquisitions. Contrary to popular, but entirely incorrect, beliefs, Engle does not "own" Caneel Bay. All he actually did, back in 2004, was acquire control of the less than twenty years then remaining on the forty year RUE left by the late Laurance S. Rockefeller. The RUE is essentially a lease/rental agreement on the property, and Engle acquired a sequential sublet of a lease/rental agreement that very clearly and very legally expires at the end of September, 2023, at which time the property reverts to the ownership and possession of the taxpayers through a previously agreed addition to Virgin Islands National Park And, Engle was clearly informed of the terms, conditions, requirements, and expiration date of the lease when he accepted them in 2004. Engle might now try his darnedest to leave the impression that he owns the place; but, he's just a damned renter.
As far as Engle's "rights" as a common renter are concerned, the RUE, the lease, the rental agreement, required Engle to maintain the property in such condition that it could continue to serve its function as a resort through to the expiration date of the lease, which he has not done since 2017. In fact, although Engle has obstructed NPS and Virgin Islands officials who have tried to gain access to Caneel Bay to properly assess environmental contamination found during a 2014 NEPA assessment, what the NPS and Virgin Islands already know about that environmental contamination would also constitute a failure to maintain the property in accordance with the terms and conditions of the RUE. Engle is, therefore, already guilty of multiple violations of the terms of his lease, his rental agreement. In most cases, violations of a rental or lease agreement are grounds for termination, which begs questions of whether this squatting renter has any rights at all to continue to obstruct access to this property. I'm not sure why he hasn't already been evicted, which is what you are often forced to do with a deadbeat renter.
Now, let's look at this deadbeat renter's puffed up and defiant bad behavior. In 2019, Engle demanded, demanded, he demanded, that the American taxpayers "wire transfer" $70 million to EHI, one of the front companies that he uses, and that the US Department of the Interior indemnify CBI, another front company that he uses and that apparently has its name on the lease, from any liability for the contamination at Caneel Bay found during that 2014 NEPA assessment. Engle went on to threaten, threaten, he threatened the Amercan taxpayers that, if he didn't get that $70 million, an extorted ransom, that "fee title" to Caneel Bay would immediately and automatically revert to EHI, another of his front companies, and EHI would have all "rights of ownership" to Caneel Bay. So, exactly who does this chiseler think he is and is this where you get your faux expertise on the situation?
As far as whether this cheesy, overdressed, overslicked, two-bit hoodlum has the right to take the property back to its original state, I personally don't give a hoot about what Engle does or doesn't do with the catchment or the marina and the resort is in ruins anyway. I'm afraid that, at this point, I don't even think it's worth worrying about whether this deadbeat pays for the environmental mess. I just want see this swindler ejected from the property and from any further connection with our national government or my tax dollars whatsoever. He seems to be an accomplished con artist, which means he would use all his capabilities to turn any attempt to hold him accountable for his misdeeds into a time and money wasting circus anyway.
So, Kk, if you really don't know what's going on and your faux expertise is just going to misdirect folks, why voice a misleading opinion? Do you work for one of Engle's front companies?