ST. CROIX —(excerpted from the VI Consortium)
The closing for Carambola’s sale from the Government Employees’ Retirement System (G.E.R.S.) to Davis Bay, LLC was recently completed. One hundred percent of Carambola’s full existing benefits were transferred along with the sale of the property to Davis Bay, LLC.
Carambola will be allowed to reduce the number of full-time employees from 147 to a minimum of 100 employees effective February 28, 2020; and Davis Bay is required to invest a minimum of $10 million in the resort effective July 1, 2019.
Earlier this month, Tom Bolt, Carambola Northwest, LLC’s legal representative, shared that G.E.R.S. extended a $15 million loan to Carambola in 2010 when the owner faced financial difficulty, at which point the resort was turned over to G.E.R.S. Mr. Bolt explained that once G.E.R.S. had control of the property, it realized that the troubled resort was losing money and experiencing financial and managerial difficulty, and the pension system found itself strapped with a failing resort that would prove difficult to sell. By 2016, the pension system (G.E.R.S.) had expended a total of more than $27 million for Carambola.
G.E.R.S. will benefit financially from the insurance proceeds Carambola will receive from the resort’s storm damage. Davis Bay executive, Mark Gordon, said that G.E.R.S. will be allowed to keep all of the insurance proceeds (a figure was not given) and Davis Bay will be responsible for renovations and upkeep.
There will be no change in management. Rick Carrington II, Carambola’s current manager, will remain in his position. Mr. Gordon said that Marriot International was still on board and would allow the rebranding of Carambola as the “Renaissance”, with a stipulation that the hotel must be brought up to the higher-end level before approval of the label.
There are specific milestones in two phases that must be reached before the “Renaissance” label is reinstated. Phase one involves repairs to get the resort ready before high season, which runs from mid-December to mid-April, and phase two involves working with Renaissance to rebrand the resort (phase one must be completed before the rebranding effort). Until then the resort will continue to operate as Carambola. The expected completion date for phase two is June 2020. At that time, the “Renaissance” brand will be used again.
The property’s return will be a significant boost for St Croix, especially given that we are experiencing a remarkable tourism recovery.
Indeed, from Frederiksted, which has seen the debut of a major new boutique hotel (THE FRED), to Christiansted, which continues to serve as a hub for historic and culinary tourism, St Croix is showing strong resilience in the wake of the devastating storms of 2017.