The National Park Service has announced a two-month extension of the first major step in the process of selecting a new operator of the Caneel Bay Resort on St. John. The iconic resort located within the Virgin Islands National Park has been closed since it was severely damaged by hurricanes in 2017.
Upon request from Del. Stacey Plaskett, the Park Service announced that the deadline for responding to the Request for Qualifications (RFQ) has been extended to Feb. 28, 2025. Applicants must submit their intention to send in a proposal by Feb. 7.
The Request for Qualifications outlines the Park Service’s overall vision for the resort and provides a framework for potential developers to prove that they have the experience, technical expertise, and financial qualifications to develop the property.
Once all of the responses to the RFQ have been submitted, the applications will be reviewed by NPS in a detailed process that is expected to take around six months. At that point, four or five developers will be invited to refine their proposals for the next round in the selection process known as the Request for Proposals (RFP.)
The extension of the Request for Qualifications is important because only proposals submitted in this first stage will be allowed to move on in the selection process. It’s unknown how many proposals would have been submitted by the original deadline of Dec. 27.
Plaskett’s press release announcing the extension states, “My office advocated for an increased time for the RFQ as there was a clear need for additional time to engage potentially interested parties given the number of federal and local holidays during the fall-winter season and limited public advertising.”
“The Caneel Bay property impacts the entire Virgin Islands – and plays a vital role in our ability to compete in the tourism space with our Caribbean neighbors,” the press release continues. “The potential offers received through the RFQ should reflect the interests and the needs of the people of the Virgin Islands and given the magnitude of a potential resort in the area, as such, Caneel should have the adequate time and resources necessary for [a] multitude of voices.”
In fact, the Request for Qualifications does include many of the concerns expressed by community members during the three-year development process leading up to the publication of the report that formed the basis of the Park Service’s vision for Caneel Bay.
The Request for Qualifications also includes explicit language to prevent a lawsuit such as the one filed by the previous leaseholder, CBIA, also known as EHI Acquisitions. The 150-acre property had been mired in a legal dispute since 2022 when the previous leaseholder, EHI Acquisitions, sued the government over ownership of the land and its improvements.
The V.I. District Court ruled in April that the resort and the 150 acres of prime beachfront land it sits on belong to the U.S. government and while EHI has appealed that decision to the Third Circuit Court of Appeals in a case that remains ongoing, the NPS is moving ahead with the redevelopment.
The Request For Qualifications states that the property available to a resort developer is 74 acres, only about half the size of the original property, although additional acreage may be negotiated.
The NPS is now offering what it has called an “unprecedented” 60-year lease term for 74 acres of its property — a term EHI had sought but was denied when it argued it would take that long to recoup the $100 million it would need to invest to rebuild the storm-damaged resort.
According to a map included in the RFQ package, “the property will consist of six zones to include Lodging (67 acres), Conservation (78 acres), Operations and Maintenance (7 acres), Interpretive/Engagement (11 acres), Day Use (5 acres), and Flexible Development (7 acres), with two areas set aside as potential sites for future community areas.”
The RFQ is a lengthy collection of documents. The following details below, which provide an overview, are excerpted from the RFQ.
Overview of the Resort Property
Lodging Zone
“The overnight experience will be that of a twenty-first-century eco-resort. In this zone, the overnight lodging and amenities will be that of an eco-destination and model for sustainable management practices that participate in a circular island economy (explained further in ‘Future Commercial Opportunities’).”
“This zone will be managed through a lease(s) and/or concession contract(s). This zone will include visitor amenities, such as dining and gift shops to support the overnight guests.”
“Areas with evidence of past disturbance, such as the tennis court area, will be a focus of new development because these areas are suspected to have low natural and archaeological potential.”
“The redevelopment will attempt to reuse existing structures and infrastructure where possible. However, the integrity of the structures is unknown, and the NPS cannot predict what can be reused or repurposed at this time.”
Day Use Zone
“Visitors, including residents of St. John, will be provided access to several beaches within the Caneel Bay area for recreation/day-use. In this zone, visitors will be provided amenities to enhance the visitor experience.”
“Management by the NPS will be consistent with other public beaches at the Park, and concessions contracts will be used to provide visitor services:
- Public bathrooms/shower facilities.
- Picnic areas/tables.
- Food services by concessioner.
- Equipment rentals (i.e., non-motorized watersport rentals).
- Swimming, snorkeling, and other water activities.”
Conservation Zone
In the conservation zone, “All park visitors will be able to connect with the natural areas of the Park through pedestrian access on some existing roads and trails throughout the Caneel Bay area. The conservation zone will be managed by the NPS.
“The desired condition in this zone is natural and undeveloped landscape. The undeveloped nature of this zone will aid in the protection of areas with high archaeological resource potential.
- Reestablish the Turtle Point and Hawksnest Trails.
- Some limited expansion of pedestrian trails to support connectivity throughout the site.
- No new overnight lodging or development will be allowed in the conservation zone.”
The RFQ does provide options for the selected developer to take over the management and operation of those areas identified as the “Flexible Development Zone” (totaling seven acres). This area includes acreage that might be used for a number of projects proposed by community members, including a local arts and crafts market, a cultural center, a hurricane shelter, a community garden, and a training center.
The RFQ also allows the selected developer to negotiate for the partial use of a dock in Red Hook on St. Thomas and its associated parking.
Lease structure
In the decades since 1956, when Caneel Bay first opened, the resort was operated under a unique type of lease known as a Retained Use Agreement crafted by Laurance Rockefeller, whose company was the original developer of the property. This agreement deeded land to the NPS at a future date (2023) but allowed a resort operator to control operations of the resort structures largely without the park’s input.
The holder of the RUE was not required to pay rent for the property.
However, under the conditions set forth in the Request for Qualifications, the selected developer will pay rent, and the Park Service may also negotiate to receive a percentage of the profits.
Hazardous materials and damage to the property
Because portions of the resort property were found to be contaminated by toxic materials resulting from decades of use, the RFQ also spells out conditions for the developer’s use of hazardous materials. For the past two years, the Federal Government has borne the costs of removing the contaminated material, but in the future, the burden will shift to the developer of the property.
The RFQ states, “If any Hazardous Materials Occurrence caused by the Lessee results in any contamination of the Premises, other Park Area property or neighboring property, the Lessee must promptly take all actions at its sole expense.”
When hurricanes Irma and Maria destroyed much of the resort in 2017, CBIA, the leaseholder, received an insurance payout but did not use the money to rebuild the damaged structures or restore the resort to working order. CBIA disputed its responsibility to return the premises to the Park Service in its original condition as stated when the lease (RUA) was signed.
To avoid a similar scenario in the future, the RFQ states, “The Lessor [NPS] may terminate this Lease without liability and the Lessee [developer] must pay the Lessor as Additional Rent the insurance proceeds resulting from the damaged or destroyed Premises.”
Environmental Concerns
Caneel Bay Resort was originally designed to offer guests low-stated luxury. Guest rooms did not include air conditioning, telephones, and televisions until the last couple of decades. Attention was put on allowing guests to enjoy the natural beauty and climate of St. John.
The RFQ goes much further and states a desire for sustainable designs that “seek to reduce the negative impacts on the environment by reducing consumption of nonrenewable resources, minimizing waste, and creating healthy, productive environments. The NPS is interested in a redevelopment project that optimizes site potential, minimizes nonrenewable energy consumption, utilizes environmentally preferable products, protects and conserves water resources, enhances indoor environmental quality, and optimizes operational and maintenance practices.”
It also calls for the construction of resilient structures “that can withstand the impacts of natural or human-caused disasters and disturbances, including the impacts of climate change, sea level rise, and extreme weather events including high winds, torrential rains, and extreme sun and seismic activity.”
