Assistant Interior Secretary Rob Wallace wants to visit Caneel Bay Resort to see how much damage two 2017 hurricanes inflicted on the resort and gauge the extent of environmental contamination on the grounds/Carolyn Sugg via Flickr.
Time is running out to have Caneel Bay Resort at Virgin Islands National Park back in operation by fall 2023, if that's even possible now as negotiations between the National Park Service and the resort's operator have dragged on with no end in sight.
Under the terms of the "Retained Use Estate" that Laurance S. Rockefeller had crafted in 1983, the resort is to be transferred to the Park Service on October 1, 2023. Since 2013 the Park Service has been trying to negotiate a 40-year concessions lease with the resort's current operator, CBIA, LLC, to take effect when the RUE runs out, though at the same time the business's principal has been trying to convince Congress and the Interior Department to extend the RUE for 60 years.
Gary Engle has maintained such a long extension is necessary to convince banks and other lenders to provide him with $100 million he has said is necessary to rebuild the resort.
Last week Rob Wallace, the Interior Department's assistant secretary for Fish and Wildlife and Parks, told National Parks Traveler that he wasn't ready to call an end to the negotiations.
"Up until the Covid incident I had planned to go down to see Caneel Bay. I don’t think that we can have a thoughtful path forward until we can put Park Service people on the ground to see the magnitude of the cleanup and what the potential cost is," said Wallace, referring to the damage Hurricanes Irma and Maria in September 2017 inflicted on the once-posh resort facilities. "Until we can baseline that first question, I wouldn’t know how to advise the (Interior) secretary to proceed. It would be nice to get that facility back and opportunity for the employees down there, for the enjoyment of the visitors.”
Along with battered down facilities, there's a question of unknown environmental contamination on the grounds of the resort that is surrounded by Virgin Islands National Park. A 2014 environmental assessment of the property raised questions of contamination from SVOCs -- semivolatile organic compounds -- often related to pesticides, and arsenic, according to some of the documents Traveler obtained through a Freedom of Information Act request.
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 indicate Engle repeatedly has refused to allow a contractor for the Park Service to access the grounds for further testing.
One of those records from 2017 pointed out that negotiations towards a concessions lease agreement "stalled in 2014 due to CBIA's concerns about NPS requirements associated with historic preservation and environmental contamination."
“I want to get down there as soon as I can, hopefully with the regional director from Atlanta, and get on that property and understand the magnitude of the problem we’ve got," Wallace said last week. “I’m hopeful Mr. Engle would agree to welcome us on his property if we come down there, because that’s a long flight to be turned away at the gate."
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Comments
The situation at Caneel Bay continues to raise questions for me; so, please let me try to clear up any misperceptions on my part in the hopes that someone can answer my questions. First, is it correct that this Gary Engle bought temporary control of this Caneel Bay resort in 2004? I say temporary control because he seems to have actually only bought out less than 20 years remaining on a 40 year "Retained Use Estate" contract, which is essentially the lease or rental agreement on the property, that was initiated in 1983 and that very clearly included a legally constained expiration date of October 1, 2023, at which time the rights to the property would revert to the taxpayers through the NPS. This "Retained Use Estate" contract also required that Engle, as the renter or leasee, 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. Is all of this correct so far? And, Engle was clearly and properly informed of the terms, conditions, requirements, and expiration date of the lease when he accepted them in 2004; is that also all correct?
Second, various sources show Engle as operating, 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 under the names Cobb Partners Development, Equis Corporation, PLM International, Capella Hotel Group, Semele Group, EHI Acquisitions, Stoneleigh Capital, and CBI Acquisitions. Is this all the same guy and, if so, which of these entities still exist, which one or ones originally bought the remaining time on the lease for Caneel Bay, which ones have held it since, and which one actually holds or which ones actually hold it now? Are there liens on or other "stakes" in Caneel Bay held between whichever of these entities that still exist? These seem to be pertinent questions because an NPT article dated June 13th, 2019, indicated that Engle demanded that the taxpayers, through the US Department of the Interior, "wire transfer" $70 million and indemnify CBI from any liability for environmental contamination at Caneel Bay found during a 2014 NEPA assessment. According to that article, Engle warned that, if the taxpayers, again through the US Department of the Interior, did not pay the $70 million, essentially as an extorted ransom, that "fee title to the Premises will immediately and automatically revert to EHI and EHI will have all rights of ownership over the Premises." So, at that time, did CBI hold the lease or did EHI hold the lease? And, to what bank, in what country, was the taxpayers, again through the US Department of the Interior supposed to "wire transfer" that $70 million? Whose name was or names were on that account?
Third, my understanding is that the "Retained Use Estate" contract, the lease, required Engle, as the renter or leasee, 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, it would seem that the aforementioned environmental contamination at Caneel Bay found during a 2014 NEPA assessment would also constitute a failure to maintain the property in accordance with the terms and conditions of the "Retained Use Estate" contract. Am I correct in understanding that Engle is, therefore, in violation of the terms of the lease? If so, what rights, if any, do Laurance S. Rockefeller's heirs either directly or acting through the Jackson Hole Preserve, if it still exists as a legal entity, have to request that the "Retained Use Estate" contract be properly honored or, barring (certainly no pun intended) the honoring of that agreement, to terminate the agreement and Engle's rights to further control and obstruction of access?
Fourth, Engle was constructing additional hotel units on the property in 2016 and 2017, but still has not yet paid those contractors for their work. Am I correct so far? Do those unpaid contractors have liens on the property and, if so, will the taxpayers, again through the NPS, be liable for those debts in the event Engle ultimately relinquishes the property?
Fifth, Engle is now apparently demanding he or whatever shell company now holds the paper on Caneel Bay be given either a 60 year extension of the "Retained Use Estate" contract or a 40 year NPS concessionaire's contract. Aside from the obvious bad precedent that would be set by making either of these agreements wtih anyone with Engle's history, what is the precedent within the NPS for awarding any concessionaire's contracts of that length? Engle is now apparently warning that the Caneel Bay operation depends on the use of the marina at Caneel Bay and that, if he is not given what he wants, he will block the use of that marina and effectively end resort operations at Caneel Bay. Since more and more people are pointing out that there other and, in many ways, preferable resort accomodations are already quite close to Caneel Bay, would there really be a need to rebuild the resort at Caneel Bay, either to serve the park or to meet the requirements of the "Retained Use Estate" contract after it expires in 2023?
Now, this current article tells us that Assistant Interior Secretary Rob Wallace wants to step in and try to resolve this issue and I have some questions there. First, various sources indicate that Wallace took a bachelors in petroleum engineering from the University of Texas in 1971, but then ended up an Assistant Director of the NPS within the same decade. Given that Wallace has always been associated with GOP politics and politicians, I would assume that his appointment as Assistant Director of the NPS came before 1976. Am I correct and, if so, how did a man still in his early to mid-twenties and with only a bachelors to his name rise so quickly to become Assistant Director of the NPS? I admit that my background is in a different set of fields; but, in the agencies with which I worked, that high of a position would go to someone with either more education or more experience and I am confused. He apparently also rose quickly to become chief of staff for anti-environment Senator Malcolm Wallop, held other high GOP staff positions, and has a history as a lobbyist, with his bachelors in petroleum engineering. We know that Engle has hired a lobbying firm associated with the current administration. So, why Wallace, why now, and what are the connections?