Dear Mr. Marzano,
You have often stated publicly that you believe you have been misrepresented and that the reports attacking the Sirenusa project have been misleading and unfair. According to the documents available to the public, at a minimum your project does not meet the requirements of the property’s R-2 zoning and the project does not comply with the requirements of the building codes.
As a result, the Department of Planning and Natural Resources stopped construction last year until these issues were addressed. It appears that instead of correcting these problems you have asked the senators to pardon these abuses and change the laws of the Virgin Islands to fit your project.
I believe your quote in the newspaper was that “our architect told us to build four stories and that he would get the permits later.” Well, “four stories” is what has been offered for sale for years and that is what the Senate approved before the governor’s veto due to numerous professional recommendations against the bill and its illegalities. So please help us understand the facts and put your cards on the table.
After exploring other excuses such as incorrect surveys and poorly written building codes, in a recent St. John Tradewinds article, you claim that this controversy is now somehow a “racial issue” because the opposition is “primarily continental people against development because they have their million dollar homes already.”
Correct me if I am wrong, but I believe that your average unit at Sirenusa is selling for $2 million ($1.4 to $2.6 million) and I am doubtful that many of your buyers are “local.” Are you saying that these opponents are against your project because more expensive real estate such as yours will increase property taxes or that your project shall perhaps change the demographics of the neighborhood?
Neither explanation seems rational so your statements appear to be aimed at inciting a division within our small island community, to provoke a response from those unaware of your tactics, and to deflect criticism of your project. Perhaps, because you do not know us, you did not hear how this approach failed for the Crucians when they tried to divide St. John along racial lines for their own validation.
No, your supporters are only those employees and subcontractors who are directly paid to write letters and attend rallies while your opponents are the concerned community united against irresponsible and unsustainable development.
In this same article you also repeated your claims that, despite contrary statements to DPNR, you are now “out of money” and “the project’s bank loan is in jeopardy without the additional units.” If these claims are the actual facts and your only remaining motive for your zoning change request, then you should have no problem proving such claims by presenting all your financial statements to the public.
Without them, your allegations of high construction costs, lack of profits, and bank concerns appear less than credible. I for one am curious which bank would write such a substantial loan without collateral or verification of your ability to meet the terms of the loan.
While your bank may not be concerned that you are threatening to walk away from a “$35 million dollar construction cost to date,” I would suppose that your own buyers, or our Senate, would at least consider a performance bond after such statements. But I am reassured that, if you did walk away from a legitimate bank loan and bankrupt yourself, someone would buy the project from your bank at a reduced cost and complete the project thus keeping the crews employed and avoiding your doomsday predictions.
Nonetheless, I am still a little confused as to the accounting that has you so anxious about your ability to complete the project without the additional units. You are on the record stating that you have spent $35 million to date and expected to spend a total of $60 million on the project. Given that the current 40 units are selling for an average of $2 million each and most units are sold, you should have contracts for $80 million and net a profit of about $20 million, barring unforeseen expenses.
Okay, while I do not have your experience, I guess a developer such as yourself could feel that a profit of $20 million is a poor investment given your sacrifices to date. So these additional seven units that you are requesting will generate another $14 million for a total of $94 million in sales but, because construction costs are always less for such added units, you may expect a total profit of perhaps $25 to $30 million.
Do I have that right? Of course there could be an error or two in this calculation but, then again, your full cooperation and financials for an audit would clear up any misunderstandings that many of us still have. I look forward to your improved level of disclosure and your next verifiable statement.
Name Withheld by Request