Gov. De Jongh Signs Lease For New Boutique Resort On Water Island

Governor de Jongh has signed a lease agreement for the reconstruction of a boutique resort on Water Island, marking the first time since hurricane Hugo struck the Virgin Islands 25 years ago that a hotel will be built there. The signing ceremony took place Wednesday at Government House in St. Thomas.

The company chosen to develop the hotel was selected through an Expression of Interest (EOI) issued by the government in 2013, and executed by the Department of Property and Procurement with input from the V.I. Department of Justice.

Governor de Jongh signing Water Island hotel development lease.

“Our interest in attracting a developer of a boutique resort was to achieve an economic activity on Water Island that would be consistent with the current community,” de Jongh explained. “It would supplement the product diversification and re-branding that we are executing to broaden our tourism offerings while providing permanent jobs and creating business opportunities.

De Jongh went on to talk about the history of hotels on Water Island.

“The previous hotel on the island, Sea Cliff Hotel, was first built in 1953 as the Water Isle Hotel and destroyed in 1989 as a consequence of Hurricane Hugo,” he said. “Since that time, there has been no meaningful and contributing economic activity on Water Island.”

The V.I. Government had, in September 2012, sought the services of REVPAR International, a hospitality advisor and asset management firm, to assess the viability of lodging development on Water Island in an effort to determine whether it was feasible to reconstruct a hotel and marina on the island. And, on Nov. 29, 2012 REVPAR concluded that it was feasible to do so.

Property and Procurement Commissioner Lynn Millin Maduro said the Expression of Interest (EOI) resulted in proposals from three developers, including LAURENS GmbH, WIDC and RED Legacy, LLC. Their offers were then reviewed by the Office of the Governor, Department of Tourism, Department of Property and Procurement, Virgin Islands Economic Development Authority, and the U.S.V.I. Hotel and Tourism Association — all stakeholders in the reconstruction of the resort. REVPAR also played an advisory role.

The contract was eventually awarded to WIDC, in part because the company did not only propose to reconstruct the boutique resort, but also plan to construct residential dwellings and villas in conjunction with a community center and commissary, to make the overall development more attractive to creating economic redevelopment on the island.

While the government agrees the residential dwellings and villas proposed by WIDC will be a catalyst for economic growth, as a general policy, the government only leases property for business and commercial use, not for residential development. To accommodate WIDC’s proposal, however, Governor de Jongh wrote the Department of Interior requesting approval to offer certain parcels for residential development as part of the hotel project development.