The V.I. Economic Development Authority is accepting public comment on proposed rules and regulations for the updated Hotel Development program, which provides financial incentives and other assistance to investors.
The proposed rules were drafted after Gov. Albert Bryan Jr. signed into law a bill that allows hotel developers an additional fee — up to 7.5% of their room rate — to go toward hurricane-related repairs and restoration.
“This piece of legislation represents our efforts not only to attract new investment in the Virgin Islands, but to make sure that the hotels that are here have an opportunity to refresh their product continually and give back,” Bryan said during a bill-signing ceremony at the Public Finance Authority building on St. Thomas in October.
The bill expands upon the Hotel Development Act of 2011, which enabled the EDA “to assist in the development of new hotels, resorts and other related tourism facilities in the U.S. Virgin Islands,” according to the EDA website. “The legislation allows hotel developers to use a portion of their hotel occupancy and casino taxes to repay long-term loans, which can help in obtaining financing for projects. Monies generated from the Hotel Development and Finance Program are deposited into a separate hotel development and finance trust fund which is established for each approved project.”
The Act “was originally limited to the islands of St. Croix, St. Thomas and St. John,” but the recent extension and expansion “will allow ample time for the application process for developers considering investment in any of the islands, including Water Island, a quiet 492-acre island, located in Charlotte Amalie harbor just off St. Thomas,” according to the EDA website.
While the website includes an announcement stating that the proposed regulations were published Friday and members of the public have until Nov. 27 to comment, it’s unclear where else the EDA has issued that announcement.
EDA Chief Executive Officer Kamal Latham said during a board meeting Tuesday that “last Wednesday or Thursday we issued them for public comment, we disseminated them to practitioners and stakeholders that we are aware of that have demonstrated interest in the hotel development program.”
Once the EDA receives feedback, “the staff will pull it together and then we will make any adjustments that we feel appropriate,” before bringing the revised final draft before the board in December, Latham said.
Under the proposed regulations, companies wishing to use the extra fee they’d been charging guests would need to request approval for their development plans from a three-member committee, who would then make a report to the full EDA board for final approval, Latham said.
Latham also said the extra fee “will be highlighted and separate on the guest’s bill.”
EDA board member Philip Payne said that while he feels the fee is “a good plan, I think it hurts tourism a little bit. When you get a hotel rate today, it’s ‘plus, plus,’ and now it’s going to be, ‘plus, plus, plus,’ and sometimes that scares people and it keeps them from coming back in certain circumstances. But it’s a good plan for economic development.”
The proposed regulations are available to view online at USVIEDA.org, and public comment can be submitted online at usvieda.org/invitation-public-comment-proposed-hotel-development-rules-regulation.
Comments may also be sent to Tracy Lynch Bhola, EDA general counsel, at [email protected] Include in the subject line of your email: “Proposed Hotel Development R&R.”
— Contact Suzanne Carlson at 340-714-9122 or email [email protected].
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