Two hotel developments — one on St. Croix and one on St. Thomas — have been approved for tax incentives under the Economic Development Commission after the agency’s governing board voted unanimously in favor of the applications at a decision meeting Thursday.
DV USVI Investment LLLP plans to reopen what’s been known as the old Sugar Bay Resort on St. Thomas under the Hilton brand, according to its presentation at a public hearing on its application in May, where it was represented by attorney Adriane Dudley.
The St. Thomas property, which has been shuttered since it was damaged in hurricanes Irma and Maria in 2017, will have 300 rooms on 30 acres and is anticipated to open in the first or second quarter of 2026, Dudley told the board at May’s public hearing. Some $20 million was spent to purchase the property in 2022 and the owners will have invested $62 million more for the construction of the resort, she said.
“We believe that this project will contribute significantly to the Virgin Islands tourist industry as well as the Virgin Islands economy,” said Dudley.
The hotel will employ 150 people when it opens, which will increase to 175 employees the following year, according to Thursday’s decision meeting, which was held virtually via Zoom.
Historic Heritage Holdings LLP plans a boutique hotel in downtown Christiansted that is expected to feature a minimum of 66 rooms, a gym, a pool and three restaurants, according to the public hearing on its application in March, where it was represented by attorney Marjorie Roberts.
“What we’re really trying to do is build an entire arts, entertainment and hospitality district,” Peter Zielke, majority owner, told the board at the time. “I think that St. Croix should be different from St. Thomas and St. John.”
Under conditions outlined Thursday, Historic Heritage Holdings will employ a minimum of 15 full-time workers within one year of receiving its certificate of occupancy from the Department of Planning and Natural Resources, or within one year from the date its EDC certificate is signed — whichever is later. It is also required to employ five full-time employees in its separate venture capital management and investment entity within one year of starting operations, the board said.
After meeting in executive session, the board approved both applications for tax exemptions at 100% of the incentives authorized under V.I. Code, Title 29, Chapter 12 — DV USVI Investment on St. Thomas for a period of 20 years, and Historic Heritage Holdings on St. Croix for 30 years.
Those benefits include: a 90% reduction on personal income tax; a 90% reduction on corporate income tax; a 100% exemption on the excise tax; a 100% exemption on the business property tax; a 100% exemption on the gross receipts tax, and a reduction in the customs duty from the standard 6% to 1%.
In both cases, retail sales, concessions and rental activities on the resort properties that are not owned and operated by the companies will not be eligible for the tax incentives, the board ruled.
Because Thursday’s meeting was a decision meeting, there was no public discussion. Board members Kevin Rodriquez, chairman; Gary Molloy, vice chairman; Jose Penn, secretary; and Positive Nelson attended.
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