The Department of Property and Procurement unveiled proposed amendments Wednesday to the long-planned Water Island Hotel Project that would remove Honeymoon Beach from the lease agreement while expanding inland development areas, increasing rent paid by the developer, and adding new financial safeguards intended to keep the project on schedule.
During a virtual public hearing, Assistant Commissioner Vincent Richards said one of the most significant changes is the removal of Honeymoon Beach from the lease, meaning the popular public beach would no longer be included in the land leased to the developer. Instead, the amended agreement adds inland tracts for residential development while increasing the developer’s financial obligations.
Attorney Alex Moscowitz said the revised lease would increase annual rent to $120,000 during the initial 10-year period, followed by $240,000 for the next 10 years, with rent increasing by 5% every five years thereafter. In addition to the higher lease payments, the developer has committed to investing approximately $56 million in infrastructure improvements on Water Island, including road repaving, waste management and disposal services, utilities, maintenance of the ferry dock, and expanded parking at the dock.
Officials said the amended agreement also addresses housing concerns raised by residents. When asked how the project would benefit Virgin Islanders facing housing shortages, Property and Procurement officials said the developer’s plans include residential construction, including condominiums and townhomes, that would be available to existing Water Island residents as well as future hotel employees.
Representatives for the development team also said they plan to provide utility services independent of the Virgin Islands Water and Power Authority, including electricity and water for the project.
Richards said the agreement includes new financial protections designed to ensure construction moves forward.
“Sixty days after the amendment is ratified, they are required to put up $3 million to make sure they perform,” Richards said.
Under the proposed agreement, the developer would have up to 60 months to complete construction.
Officials said the amended lease is intended to serve as a framework for future development agreements on Water Island. The proposal has not yet been considered by the Legislature.
