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1 VIRGIN ISLANDS ECONOMIC DEVELOPMENT AUTHORITY 2 TESTIMONY BY DWAYNE A. BENJAMIN, SR. 3 COMMITTEE OF THE WHOLE 4 36th LEGISLATURE OF THE VIRGIN ISLANDS 5 ST. THOMAS, VIRGIN ISLANDS 6 7 Good morning, Senate President Milton E. Potter, members of the Committee of the Whole of the 8 36th Legislature of the Virgin Islands, Legislative staff, the Virgin Islands Economic Development 9 Authority (“USVIEDA” or “the Authority”) team, and the viewing and listening audience. I am 10 Dwayne A. Benjamin, Sr., Assistant Chief Executive Officer of the Virgin Islands Economic 11 Development Authority. I appear before you on behalf of Wayne L. Biggs, Jr., Chief Executive 12 Officer of the Virgin Islands Economic Development Authority, who is unable to attend today. 13 Accompanying me in the well are members of the USVIEDA team: Tracy Lynch Bhola, Esquire, 14 General Counsel, and Margarita Benjamin, Managing Director, Economic Development. Also in 15 attendance are Kelly Thompson-Webbe, Chief Financial Officer, and Celina Morris, Director, 16 Marketing. It is my honor to provide testimony in support of ratification of the Hotel Development 17 Agreement between the Government of the Virgin Islands and Haven Development, LLC (“Haven 18 Development” or the “Developer”). 19 The Virgin Islands Hotel Development Program is administered by the Virgin Islands Economic 20 Development Commission, a subsidiary of the Authority. It was established under the Hotel 21 Development and Finance Program Act (HDA) of 2011, to encourage investment in the 22 development, reconstruction, and renovation of hotels, resorts, and related facilities in the U.S. 23 Virgin Islands. The HDA program’s primary goal is to stimulate tourism-based economic growth 24 while creating employment opportunities for Virgin Islands residents, particularly those who are 25 unemployed or underemployed in communities where hotel investments are made. 26 HDA was subsequently amended in 2018 through Act 8030, and again in 2019 through Act 8056 27 to strengthen the program and introduce provisions such as the Economic Recovery Fee (“ERF”) 28 Incentives. The program allows for the use of future revenues from hotel room occupancy taxes 29 and casino taxes to support hotel development projects that would not likely occur solely through 30 private investment in the reasonably foreseeable future. Monies generated through the HDA 31 Program are deposited into separate hotel development trust funds established for each approved 32 project. Funds allocated and deposited into each trust fund are sourced from the hotel and casino 33 taxes generated by that specific project. 34 Developers may receive incentives as follows: 35 (1) For new hotel projects, 100% of the revenues generated from the Designated Hotel Room 36 Occupancy Tax (“Hotel Occupancy Tax”), Designated Casino Tax on Gross Revenue (“Casino 37 Tax”), and the ERF, if applicable, shall be allocated to and deposited into the Project’s Fund. 38 (2) For hotel projects where 70% or more of the units have remained unoccupied due to natural 39 disasters or related impacts, 50% of the revenues generated from the Hotel Occupancy Tax and 40 Casino Tax, as well as 100% of the revenues generated from the ERF, if applicable, shall be 41 allocated to and deposited into the Project’s Fund; and 42 (3) For reconstruction and renovation of existing hotel sites where less than 70% of the units have 43 been unoccupied due to natural disasters or related impacts, 100% of the revenues generated 44 from the ERF shall be allocated to and deposited into the Project’s Fund. This project would not 45 be entitled to revenues generated from the Hotel Occupancy and Casino taxes. 46 The Hotel Occupancy Tax and Economic Recovery Fee are granted for a period of 30 years, or 47 until such time the direct investment is liquidated, whichever is earlier. The amount of the 48 Economic Recovery Fee for any approved ERF project shall not exceed 7.5% of the hotel room 49 charge. 50 Prior to Haven Development, USVIEDA approved two (2) HDA applications: RC Hotels (Virgin 51 Islands), Inc. d/b/a The Ritz Carlton St. Thomas, and CREF3 USVI Hotel Owner, Inc. d/b/a The 52 Westin St. Thomas Beach Resort & Spa and Bouy Haus Beach Resort St. Thomas, Autograph 53 Collection. As a result of the Hotel Occupancy Tax and/or Economic Recovery Fee, these 54 Developers were able to reinvest and upgrade the existing properties which were shuttered due 55 to Hurricanes Irma and Maria resulting in direct, indirect, and induced activities spurring economic 56 growth in the Territory.as a result of Hurricanes Irma and Maria resulting in direct, indirect, and 57 induced activities spurring economic growth in the Territory. 58 On March 6, 2024, Haven Development, the third applicant filed an application with the Authority. 59 Haven Development requested approval to impose a seven and one-half percent (7.5%) ERF in 60 addition to the dedication of the hotel occupancy tax revenues of twelve and one-half percent 61 (12.5%) to support payment of the debt obligation to be incurred in connection with the 62 development. Haven Development entered into a management agreement with Equities Hotel 63 Group, LLC to manage and operate the hotel as a Hilton Worldwide Hotel. Notably, Haven 64 Development, LLC was granted a limited, non-exclusive license to use the name Hampton by 65 Hilton St. Thomas, the first newly constructed hotel in over 30 years in the U.S. Virgin Islands, 66 adding 126 rooms to the hotel inventory. 67 At its decision meeting on December 12, 2024, the USVIEDA Governing Board approved Haven 68 Development for the full 12.5% Hotel Occupancy Tax on room revenues to reimburse a portion of 69 the hotel construction costs, along with a 7.5% ERF in accordance with 29 V.I.C. § 1312(c)(2). 70 These incentives were granted for a period of 30 years, or until the direct investment of $34.8 71 million is liquidated, whichever comes first. 72 On April 10, 2025, Haven Development submitted a request to increase its direct investment over 73 the initial budget to incorporate additional costs. Based on the USVIEDA’s October 3, 2024 74 independent financial analysis prepared by CBRE, Inc., the Developer’s debt of $44,105,254.61 75 will be liquidated in less than the 30-year period authorized by law, resulting in the USVI 76 recapturing the Hotel Occupancy Tax within approximately 18 years. It was determined that the 77 project is still feasible at the increased cost. 78 On July 15, 2025, USVIEDA approved the increase in the direct investment to be made by Haven 79 Development, LLC, along with the Development Agreement establishing the obligations of the 80 Government of the U.S. Virgin Islands and Haven Development, LLC. 81 On July 30, 2025, the Development Agreement was transmitted to the Honorable Albert Bryan Jr., 82 Governor of the U.S. Virgin Islands for consideration. Thereafter, following Governor Bryan’s 83 approval, the Development Agreement was submitted to the 36th Legislature for ratification 84 pursuant to 29 V.I.C.§ 1307(c). 85 Hence, I am here today on behalf of USVIEDA to respectfully support ratification of the 86 Development Agreement. We believe that Haven Development’s project is in the best interest of 87 the Government and residents of the United States Virgin Islands, and we look forward to this 88 body’s favorable consideration. My team and I are available for any questions that you may have. 89 Thank you. 90