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ia = wah) > ma a a at INFORMATION CENTER BT Office Of The Governor © Virgin Islands Planning Office “ ©" COASTAL ZONE MANAGEMENT = 807 SS BS ee | ee jer i f- U.S. DEPARTMENT OF COMMERCE NOAA COASTAL SERVICES CENTER 2234 SOUTH HOBSON AVENUE CHARLESTON, SC 29405-2413 ECONOMIC ASPECTS OF THE VIRGIN ISLANDS COASTAL ZONE MANAGEMENT PROGRAM Dre pun Ly of CUC Library 4 Cyril E. King Governor Thomas R. Blake I Director of Planning ft Compiled By: Walter L. Stewart, Ph.D., Resource Economist Edward H. Lindelof, Project Coordinator August 1977 Government of the Virgin islands mt a Virgin Islands Planning Office oOo = ay aS This program is funded in part ~, through financial assistance provided by the Coastal Zone Man- agement Act of 1972, administered by the Office of Coastal Zone Man- NN agement, National Oceanic and- a. Atmospheric Administration ~ ' ) ? oy bo Be TABLE OF CONTENTS Page INtroduction. ccccccccrc aces eee e ence eee ene eee ete ecr ees eessceserases | Some Basic Economic ProblemS...ccsececcecccecccvcessreserestercese | Background and Context for Planning. ......cc cece cence eee ener eees 2 Employment Summary ..... ccc cece eee e ee ee ee eee eee eee cent 2 Unemployment .......ceeeeeees cence eeeeees eee ce eet eee ee eeees 4 Non-Resident Labor Force ..c cece cc cece wees mere cee en seeeererenes 9 Population Growth ....... ceca w atest en eecens See w eee eeeee 5 Components of Changer scccccraccscccccensecssvccevesevesrace . 5 DISEriDULTON cocccccceccreescceeereeseetereenetereeertresete 0 The Tourism Industry .......cec ec eee ween wee c eee e eee e eee eeee 6 Future Population and Employment ..... eae eee nas ance eee eens 13 Socio Economic Impacts .......cecseceeees eee c cece eee een e eens 14 Property Values ... cc cece ccc cece reece ccc w cease cece seswesseseee VF Property RIGHtS cocccec cece etc en snes esse cesweceneeesesnccesesen TZ Proposed Permit System 2... cease cccc cree cece tase re cree eteereres 19 Coastal Policies wiscecencccececenceereee reer en ereseseesessees . 22 Land and Water Use Plan ........cceceeeeees wee w cece eee eeeneees 30 Areas of Particular Concern ......... bee ee eeeee tees e ences 31 Intergovernmental and: Public Involvement acc e cece eee vec eceseees 45 Public Access/Acquisition c.cccccccccccceseseecessetereeseseees AS Visual CONCErPNS cacccccccccccscececcceeeeeeescuseeeeeeees ceeeee 46 Economic Development ...cccc ccc eee cet eetees sete ecw ence eseeence . 47 Construction and Commercial/tIndustrial Activities ......... . 47 Commercial Fishing and Recreational Boating ................ 48 Tourfst/Recreation .... ccc. ccc cece ee nees Lecce ee ween eee kg POPtS co ccce ccc ea cnc ee nese nn as senesseas Ca eee e eee enee 50 Additional Provisions of the Federal Act ....ciccacececvenvceee 52 CEIP Program ..ccc cece cece secre cece eres asesesssssetssereeess 52 Interstate Grants ... ccc ccc cece wee c eect e nese e tec eteeseeeeneras 53 Research and Training GrantS ....ssceeceecoeeenes see e ee eeeeee 53 Beach Access and Island Preservation ..... Pr 54 List of Tables 1. Estimated Annual Employment ...... cece cee cece asec eeseeeteee 3 2. Components of Population Change-Summary ..... Cees eee .. 7 3, Components of Population Change-Annual eee eee eee eens .. 8 4, Population Distribution .......... sac ee cece eset ccecsasacaee 9 5. Air and Cruise Arrivals c.ccccscsccccccccrecceceseasesecses 10 6. Estimated Tourist Expenditures ...cccceccsecscccsccccccvese 7. Overnight Accommodations w..ccccccraccccrcssetcccecevereae 12 8. Impact of Government Action Upon Property Values .......... 17 Pe en ee ll ll ae t we INTRODUCTION: it has long been recognized that the coastal zone plays a vital role in the life of every resident of the Virgin Islands. The coastal zone is not simply important: it is the essential resource that makes the islands what they are:today. ‘Such diverse demands as petroleum refining, major port activities, as well] as’ breeding grounds for endangered species like the Hawksbill Seaturtle, the Brown Pelican and the Humpback Whale, depend significantly on the coastal resources. The Virgin Islands National Park on St. John, Magens Bay Beach on St. Thomas, and Davis Beach on St. Croix are all examples of the recreational resources of the coasta] zone. Enthusiasts of big game fishing, sailing, and scuba diving find unsurpassed opportunities in the Virgin Itslands coastal zone. World record marlin catches and world famous scuba diving and snorkeling locations, such as Buck Island Reef Nationa] Monument, make the Virgin Islands Coasta!] Zone a resource of vast economic and recreationa!’ value. The coastal zone is literally the life lineo the isiands. From providing seawater for the desalinization plants, or the ports from which most food and goods enter the islands, to providing the resource base for the most important industry, tourism, the coastal zone performs an indispensable furction te the people of the Virgin islands. Hence economic development must rely on careful cultivation of coastal! assets. Some Basic Economic Problems The existing system of allocating coastal resources among various uses is largely through private market forces and a feders|-teritorial regulatory system which is complicated and uncoordinated. tndivicus} regulations tend to address a fairly narrow scope of activities, purposes, and interests with ljttle attention directed towards overall long-range goals, policies and priorities. The existing system fails to maximize the economic benefits of the Virgin Istands coastal resources for a number of reasons: 1) Many coastal resource users have a detrimental effect on other activities without considering the ''costs' of these ''external'' effects in deciding whether or not to undertake their activity. Thus, the developer (public or private) of a facility which destroys or obstructs a scenic view, is not required to compensate all the people who would have otherwise received visual satisfaction. In effect, the private market does not properly value such common property resources as wetlands, scenic quality, clean air or clean water. ve: (a oe 2) The private market tends to value present consumption much higher that future comsumption and this places a high discount rate on future needs. This makes sense to the private consumer because in the long-term future he will no longer be around. Thus, the present system tends to understate the value of scarce non-replaceable natural resources that will continue to be demanded by future generations. 3) The existing local permit and regulatery system for the shorelines can be time consuming and, potentially, arbitrary as a result of unclear public policy and Jack of guidelines. Thus, the existing system can result in economic hardship upon developers as a result of delays or confusion. In any event, (whether there are delays or not) the uncertainty which accompanies the present system can frustrate the development of worthwhile projects. The only way to correct the misallocation of resources and the ineffective management of the present system is through carefully reasoned and coordinated public intervention. This is essentially the objective of the Virgin Islands Coastal Zone Management Program. Background and Context for Planning The population of the United States Virgin Istands has elrost tripled since 1960, from about 33,000 to an estimated 95,000 inhabitants in 1976 (V.1. Department of Health estimates). This rapid population growth has occurred primarily as a result of increase employment -opportunities associated with a developing tourism industry, and territorial government policies which have encouraged economic development by means of tax rebates and subsidies. As a result of this economic growth, Virgin Islanders enjoy a standard of living which is unsurpassed in the Caribbean. Estimated personal income per capita was $3,200 in 1972, approximately the same as for the state of Mississippi which ranked last in per capita among the “states (McElroy, 1974). The national estimate for the same year was $4,500. Employment Summary ~ Total employment in 1965 was about 23,000 and by 1977 it was expected t reach 40,500 (al! employment estimates are from Virgin Islands Employment Security). The most prominent feature of the employment situation is the large local government sector, about 22 percent of total employment in 1965 (4,900) and 25 percent of the total in 1977. Employment estimates for 1965-1977 are shown in Table f. 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The number of workers engaged in construction has grown from about 2,700 In 1965 to 5,460 in 1977. Manufacturing employment increased from 1,600 to 2,960 from 1965 ta 1977. Mast of- the manufacturing employment is accounted for by the two larce industrial operations on St. Croix, Hess Oi] and Martin Merietta Alumina. In addition to oil refining and alumina processing, other manufacturing activities include watch assembly, textiles, and the production of rum. = . Retail trade establishments, with an estimated 1977 enployae > of 5,600, represent the largest single industry in the private sector. This was also true of the 1965 total of 3,20G. Whole a’ trade increased from 300 in 1965 to more than 506 in 1977. o Hotels and other lodaing places accounted fer 2,900 erplewsra- in 1977, an increase of about GOO over 1665 tctais. “he prck employment during the perfod was 3,400 in IS74. Other serv! employment grevi from 1,390 in 1665 te TESCO im TS77. Bree GG.8 to 1977, employment in transpertation, communications, and utilities increased from 1,500 to 2,200. Finance, insurance, and real estate grew from about 600 in 1965 te 1,600 im 1977 Self-employed, domestics, and unpaid family workers have constituted a sizable portion of the employment tote! in recast years, and these workers comprised about IS percent (5,400 employees) of the totai in 1977. The actual size of the agricultural and fishing industries i: difficult to determine since most of these worners are se! fremetoves or part-time only. Local estimates for covered employment (estimated 200 employees) undoubtedly understate the importance of the fishina industry in particular. There are presently about 500 licensed commercial fishermen and an additional 450 helpers in the istands. The average number of days fished per month is low (5.2 cays), indicating a great deal of part~time employment. The total fish catch for 1974-75 was valued at about $1 million. In addition, an estimated 50,000 pounds of lobster was harvested from nearby waters (V.1. Bureau of Fish and Wildlife, 1976). With the exception of several dairy and livestock operations and some small scale truck farming, there is little large scale commercial agricultural activity in the Territory. Unemployment - Between 1965 and 1971, unemployment in the Virgin Islands was almost non-existant. The 1972 rate of 4.0 percent was double that of the preceeding year. The rate has climbed steadily since then. There have been sharp increases in the unemployment rate in the past three years, from about 5.5 percent in fiscal 1974 (weekly average 2,200) , to 10.8 percent is fiscal ~® yo ee ee fee 1976 (4,700 per week). By December 1976, the unemployment rate was estimated to be about 8.5 percent for the Territory. Un- employment on St. Croix was estimated at 9.7 percent. for St. Thomas-St. John, the rate was 7.2 percent. The unemployment rate for 1977 is estimated to be about 8.5 percent (weekly average 3,800). The Non-Resident Labor Force - In mid-1975,.there were approximately 10,700 non-immigrant aliens residing and working in the United , States Virgin Isjands. By the end of 1976, there were only 6,566 aliens in the work force (all estimates furnished by U.S. fepartrent of Labor, Manpower Administration). [In 1976, these workers comprised about 17 percent of total employment. Many have resided in the Virgin Islands for long periods of time and have become a permanert part of the economic structure, These noncresidents workers have Leer a significant part of the total work force for many years. Nen- residents are employed In almost every industry; however, they are amajor part of the work force in the construction industry and private household werkers. oe Population Growth - The population of St. Croix has increased from about 15,C00 residents in 1960 to 48,060 in 1976 or 53 percent of the total increase for the Virgin Islands. During the same period, St. Thomas has grown by about 28,000 residents and St. John has added almost 1,300 new inhabitants. Populatior changes are summarized below. Population Growth By Island 1960-1976 Year Virgin \slands St. Thomas St. John St. Croix 1960 33,425 17,392 928 15,105 1965 49,742 26,375 1,347 22,020 1970 75,151 37,285 1,924 35,942 1976 95,650 45,240 2,220 48,190 Source: V.1. Department of Health Population Growth - “Components of Change - Population growth in the Virgin Islands over the past 15 years has been targely attributable to an influx of migrants from the nearby islands, and to a lesser extent, migration from the continental United States. For the ten- year period 1960-1970, 64 percent of the total increase was due to “net in-migration . ~The most striking aspect of population change im recent years is the complete reversal of the 1960-1970 qrowth trend. Between 1970-1975, only about 35 percent of the total on ee ee ee ee ee ee ee ee ee we ‘ nr 5 ' 1 Y a population change was accounted for by net. migration with the remainder attributable to natural Increase. Most of the natural increase of the past 5 years is the result of a very high birth rate rather than a lowering of tthe death rate. Table 2 and Table 3 detafl the components of population change for 1950-1975. Table 2 shows a summary of the changes while annual estimates are listed in Table 3. During the 5 year period 1967-1971, average annual net migration was 4,100 as compared to about 450 per year for 1972-1975. Population Distribution - Population increases and economic advances have brought about dramatic changes in the land use patterns ef the Virgin tslands. The traditional activity centers of Charlotte Amalie, Cruz Bay, Christiansted and Frederiksted continue to be important as residential centers for commercial activity; however, their importance as residential centers has declined considerably in recent years. Most new housing developments have located in the formerly rural countryside, contributing to urban sprawl] conditions in some areas. Comparative population distributions for each island by quarters are shown in Table 4. On St. Thomas, the most striking population changes are those which have occurred on the eastern end of the island.. In 1960, the combined population of East End, Red Hook, Frenchman's Bay, end New Quarters was 904; the estimated population of these areas in “1976 was 19,000. Growth in the Cruz Bay area of St. John has accounted for almost all of the population increase on that island. Central St. Croix (Company, Queen, King, and Prince Quarters) has grown from 5,200 inhabitants in 1960 to an estimated 31, 200 in 1976. The Tourism Industry - With the exception of Hess O71, the single most significant economic activity in the Territory is tourism. In 1973, it was estimated that this industry was directly responsible for 20 percent dh all employment in the islands. Indirect employment attributable to the tourist industry accounted for an additional 16 percent of the total (Checchi and Comapny, 1974). The industry has grown dramatically since 1960: . annual visitor totals have fncreased from less than 200 thousand to well over a million, tourist expenditures have increased to more than six times the 1960 level, and the number of overnight accommodations has grown from !,400 rooms in 1960 to more than 4,400 in 1976 (V.1. Department of Commerce estimates). Overnight hotel visitors continue to play a central role in the tourism industry; however, the relative importance of this type of tourist activity has diminished in recent years. An increased level of day-trip shopping and sightseeing by visitors ON DM UND MT Pwo Om OF mw in WINONA Nm SO maT OM Re PF One ast N we TO MLN JT OLN — NO mm NON NANO NO — m OON OE MA OALVA MH A TAN Mm ONO WON LAM w wowvot eo ao rmwcn ae co TN EN NOON C4 me NAN = ~~ Cc a= L LV Oem OLN NN PR. 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MO RMAC OU AR a = OH « TWH —DMNM—DHOMNTODAOMNA SR me AGRO SCRBARGS -_ ee es | DOK NMTNVOUERD NO-—NMTODO o> WO NO 80 80 80 10 SO W100 00 BR Vu ADAAAAAAAAAAAMNAAAA > oe oe mee eee eee ee =a =— cy from Puerto Rico and the many cruise ships which regularly call in the islands has accounted for this relative decline, In spite of some recent shifts in charter boat activity out of the Territory to the nearby British Virgin Islands, this segment of the tourist industry has also increased in importance in recent years. St. Thomas is the focal point for most of the tourist industry in the Territory. More than three-fourths of all air visitors to the islands spend some portion of their stay in St. -Thomas. [n- addition, the vast majority of cruise ship calls are also made to St. Thomas. Air and cruise ship passenger arrivals for the period 1960- 1976 are shown on Table 5. Air arrivals at Truman Airport in St. Thomas have increased from about 87 thousand in 1960 tc 371 thousand in 1976. In the peak year of 1969, almost 567 thousand passengers deplaned in St. Thomas. Arrivals at Hamilton Airport in St. Croix have climbed from 36 thousand in 1960 to 157 thousand in 1976. The peak year was 1972, when 243 thousand were counted. Cruise ship passenger arrivals totaled about 50 thousand in 1960 and 470 thousand in 1976. Most of these visit St. Thomas only. Estimated tourist expenditures for selected years are shown in Tahle 6. The estimated expenditures in 1960 were $24.8 militon and by 1976, these had climbed to more than $152 million. In 1975, expenditures by all air visitors (overnight and day trip) were about $119 million. Cruise ship visitors spent an estimated $32 million in 1976. Table 6 Estimated Tourist Expenditures Year Total All Air All Water (FY) (Smil.) Visitors Visitors 1960 24.8 n.a. n.d. 1965 54.0 na. nea. 1972 ; 158.5 131.0 27.5 1973 148.8 112.3 36.5 1975 145.6 114.8 30.8 1976 152.2 “118.9 33.3 Source: V.1. Department of Commerce The local Department of Commerce conducted a survey of approximately 7,000 exiting air travelers throughout 1976. In addition, a number of -I1- be » ' t . oo + iar cruise ship passengers were interviewed during the first quarter of the year.. Some of the results pertaining to expenditures are shown below.” The expenditures represent dollars actually spent in the Virgin Islands and do not include any prepaid expenses which may have been incurred, — Average Group Average Travel Expenditure Group Size All air ~ $466 1.87 Overnight anly 563 1.93 One-day non-resident of Puerto Rico 174 1.69 One-day Puerto Rico , : businessman 67 1.10 One-day Puerto Rico non-businessman 15 2.15 Cruise ship 114 : 1.96 oe Table 7 shows the changes in the number of overnight tourist accomodations and the estimated hotel occupancy rates for the period 1972-1976. The number of rooms shows considerable variability during the period as a result of hotel closures and openings and the shifts of condominium units to hotel type accommodations and vice-versa. The total number of rooms available in 1976 was only slightly higher than in 1972. Overall occupancy rates were about 48 percent in 1976, down from an estimated 58 percent in 1972. Table 7 Overnight Visitor Accommodations Occupancy Occupancy Occupancy Rate-V.!. Rate Rate Year Rooms (%) St. Thomas/St. John St. Croix 1972 44317 57.7 62.2 53.5 - 1973 3,865 48.8 58.9 38.5 1974 3,939 43.8 42.4 37.8 1975 4552 | 50.6 47.8 4h 2 1976 4,460 48.2 ; 55.0 40.3 Sources: Number of rooms and total occupancy rates are from V.1. Department of Commerce. Qccupancy, rates by island are monthly averages from St. Croix and St. Thomas-St. John Hotel Associations. ~}2- ee 4 be] mmm Hm mH Hm Hmmm CE lUMlUlUUllCleelll ele ce ‘ * Occupancy rates for St. Croix have been consistently lower than those for St. Thomas-St. Jonn. In 1976, the St. Croix figure was about 40 percent compared to 55 percent for St. Thomas- St. John. Using an overall occupancy rate of 48 percent for 1976, the total number of vacancies for the year amounts to about 845,000 room nights. Future Population and Employment - Population projections by the V.1. Department of Health indicate that by 1985, the total population of the Territory may reach 120,000, an increase of about 25,000 over 1976 estimates. More than 60 percent of this increase is expected to occur in St. Croix. If the population of the Territory in 1985 is 120,000, then the total number of people available for employment will be about 54,000. The estimated employment for 1977 is about:40,000. In & years, the employment need increase is 14,006 or about 1,700 new jobs per year, every year through 1985. This need, of course, includes finding employment for about 3,800 residents who are presently unemployed. For the ten year period 1967-1977, employment in the Virgin Islands increased from about 29,000 to 40,000 or 3,000 less than the needed increase forthe next 8 years. !t should be remembered that about 4,000 of.the 1967-1977 employment Increase was attributable to increased employment by the local government. By 1985, the needed. employment increase will be twice that of the private sector for the ten year period 1967-1977. It is unrealistic to assume that the local government can absorb another 4,000 or even 2,000 additional amployees between now and 1985; therefore, most new jobs must come fron the private sector. If these new jobopportunities are not found, there will be considerable out-migration from the Territory. The Virgin Islands Coastal Zone Management Program is premised upon the assumption that the public and private sectors will take positive steps to attempt to fill at least part of these employment needs. It can be anticipated that the federal government will also assist in meeting this objective. As a result, we can expect that development pressures and use conflicts for the shoreline area wil] increase greatly over the next 5-8 years. The necessity for long range development planning for coastal areas isthus paramount, The increased demand for port facilities, local and tourist recreational facilities, commerce and industry of all types,.hotels, housing, schools, marinas etc., will only accentuate the basic economic problems outlined earlier. In essence this is the economic and social basis for the Coastal Zone Management Program, v » H y? « rr oo ee ee ee ee ee ee ee a L] Socio -Economic Impacts A study by the Real Estate Résearch Corporation of the potential impacts of coastal management programs identifies those sectors affected by coastal management. Benefits will be of various kinds and wil} occur in different ways and degrees. The following major categories of beneficiaries can be identified: owners of property directly affected by implementation decisions, neighboring property owners, owners of businesses whose productivitya market attractiveness would be enhanced by the Virgin Islands Management Program policies, government, and the general public. The benefits of coastal zone management will be the positive changes which occur in the scale, distribution, and place of elements such es production (including manufacturing, agriculture, fishing), utility services and costs, business sales, employment opportunities, population and the labor force, housing demand and supply, construction, financing and investment, property values, government costs and revenues, educational and recreational opportunittes, and aesthetics. Planning and managing the coastal zone of the Virgin Islands consists of the use of foresicht in cooperatively determining how to both preserve valuable natural resources and accommodate the needs of an expanding population and economy. To achieve this balance involves trade offs which include some short-run and long-run positive and negative effects. For example, long-run benefits from protection of marine habitat such as a mangrove lagoon include increased fisheries productivity. In the short-run, the loss of such an area for development is often perceived as a highly negative impact. Potential economic benefits of the coastal zone policies have the ' following attributes: ° They can be ''one time only" or "'recurring,'' y om They can cause net increase in economic activity or merely shift benefits among individuals or groups, Costs may be Incurred in their attainment--such as, expenditures for shoreline restoration, and maintenance, pollution control, and Secondary ''spin-off'' effects may be felt--both positive and negative, depending on the nature of policies and the economic activities affected. The following list of benefits of coastal zone planning and management is similar to the benefits of most State and local planning activities: * Reduced cost of new development, “lhe | * ae « 4 ig a Better preservation of natural environment and natural buffers, increased recreational opportunities, Better preservation of existing buildings, Less pollution, Less congestion, Higher quality development, More efficient use of existing public facilities and services, ‘More diversified tourism opportunities, Better fit of supply and demand, : Greater awareness of needs and opportunities, Less uncertainty regarding future potentials, thus creating an atmosphere which is conducive to attracting outside investment and long-range economic development, and Improved posibilities for effective actions based on under- standing and consensus regarding goals. Potential economic benefits can include increased productivity, increased amount of commercial and Industrial development, more jobs, increased property values, reduced or stabilized consumer prices, and heightened satisfaction with one's physical environment. Prudent coastal} zone planning, therefore, results in balance between ‘conservation of irreplaceable natural resources and the needs--job creation, housing, recreation, port facility and marinas--of an expanding economy. While some coastal zone actions result in net gain or net losses for the local economy, in most instances the short-term effects of the program cause a redistribution of assets. Some lost expectations will undoubtedly be encountered, but gains elsewhere should offset these losses. In any case where regulations would actually result in a legally-determined taking, the regulations would be declared void or compensation paid. Planning stabilizes erratic ''swings'' in expectations because it results in less uncertainty in future prospects of land investment. While there may be short-term lags, the long-run benefits are likely to balance or exceed costs. For example, many non-water dependent activities may not be built in the coastal zone. These same regulations will result in heightened opportunities in coastal dependent economic activities--tourism, recreation, fisheries, port, and marina development. ae Pa Property: Values - The Real Estate Rechearch Corporation report states the following ‘with respect to property values: % The key determinants of land values include ° Natural site characteristics and environment, Man-made site characteristics and environment, Community image, Demand for particular land uses, Access, . Utilities, Public facilities and sservices, Taxes, and Land use and development regulations. * € In general, about 55 percent of land value is attributable to government action, with the balance resulting from the actions of the property owner, his neighbors, and the general public. Governments influence land values through use or design regulations, improving access, providing public facilities and services, preserving favorable "images'' and through its tax rates and policies. Table 8 shows the different types of government action that impact property values, and their relative importance in determining the overall] net effect of coastal zone regulations on land value. Restricting land use options will lower land values of subject properties, but will also transfer any unsatisfied demand to other competitive sites not subject to use restrictions. Regulations requiring mitigation of “adverse environmental impacts result in higher development costs but also result in more attractive, desirable sites. Improved access and public facility provision generally impact positively on land values; however, access improvements can have such negative effects as increased noise or reduced privacy. wt °o a 7 ¥ ~16- , | v4 4 AL . t a . A TABLE 8 IMPACT OF GOVERNMENT ACTION ON PROPERTY VALUES Impact on Values of Subject. Property Type of Action Restrictions on land use Developer required to make improvements or pay fees Resource amenities protected or restored by government . action Shore access by the public maximized and protected Concentrating development in existing communities Providing infrastructure, public fac‘lities, and services Tax reduction or deferral for regulated, restricted, or encouraged uses of coastal properties Value declines Value declines Value rises Value declines If still undeveloped, value declines; if already im- proved, value rises Value rises Value rises Source: Real Estate Research Corporation. The Virgin Islands Coastal Zone Management implemented through government action resulting potential (and hence lower profit expectations) Impact on Values of Neighboring or Competitive Properties Value rises Value rises Value rises Value rises, Value rises Values unchanged Values unchanged Relative Importance of Specific Actions in Determining Tnpacts Net Effect on Property Values Redistrihutional Very important Unimportamt compared to Slightly negative i ‘ey nes other public actions Slightly positive to very Very important positive Less important than use restrictions or amenity protection Slightly negative Positive Very important Positive 1m portant Less important than use restrictions of amenity protection Slightly positive Program will be ina loss in development for some sites--presently unserviced rural lands, agricultural and wooded acreage, areas with development hazards, and parcels with scenic, historic, or ecclogical significance. Recreation and other water dependent uses wil! be given priority over urban development along the waterfront. If a market for more intense use exists, the affected parcel will lose value. In a normal market, the demand for more intense use will be transferred elsewhere; this is encouraged by program policies fostering more compact development in already built-up communities. The overall net effect of the program on land values wil] ultimately be positive because of better management, improved amen!ty protection, and reduced uncertainty about future governmental policies. Property Rights The individual right of property owner is one of the most sensitive Issues with respect to the management of resources, whether the management is accomplished through coastal zone. programs, Territorial land use plans, or regulation of development, Concern has been expressed about.property regulation, and this concern will undoubtedly continue fin the future. ~|7- wa * * t . «, mm a . Pad The Virgin Islands law is clear on this point (Revised Organic Act of 1954, Section 3). {t prohibits the taking or damaging of private property unless there is payment or just compensation. The Virgin Islands Coastal Zone Management Act requires that permits which affect the use or conservation of coastal resources also take into account social and economic needs of the people. These concerns will be incorporated into the Environmental Assessment form for major permits. ~18- pe ‘ ™ a . ’ ry . ; | A | Proposed Permit System “ The existing regulatory system which controls development ‘activities in the coastal zone includes: a Zoning Permit from Department of Public Works Earth Change Permit from V.I. Conservation District (private sector projects) or the Department of Conservation and Cultural Affairs(public projects) Building Permit from Department of Public Works Subdivision approval from Planning Office Historic District approval from Virgin Islands Planning Board Provisions of the Trustlands, Occupancy, and Alteration Control Act administered by the Department of Conservation and Cultural Affairs Provisions of the Open Shoreline Act administered by the Department of Conservation and Cultural Affairs Provisionsof the O71 Spill Prevention Contro! Act administered by the Department of Conservation and Cultural Affairs Water and Air Pollution Discharge Permits administered hy the Department of Conservation and Cultural Affairs The proposed permit system for the first tier coasta! zone would consolidate the zoning permit, earth change permit, Trustlanas Occupancy and Control, and Open Shorelines Act. The Oi] Spill and Water and Air Pollution Permits would remain in the Department of Con- servation and Cultural Affairs but would be coordinated with the consolidated permit by the proposed Division of Coastal Zone Man- agement in the Department of Conservation and Cultural Affairs. As contrasted to the present system, the proposal calls for definite time limits for action on all the permits which are consolidated into the ''Coastal Zone Permit.'' A well-defined appeals process through the existing Board Of Zoning, Subdivision and Building Appeals Board (renamed the Land Use Appeals Board) is also included in the proposal. Judicial review through the District Court is also included in the appeals process. In addition, a consolidated "Bureau of Enforcement!’ will be set up to monitor and enforce al] rules and regulations of the Coastal Zone Permit and all other laws administered by DCCA including fish and wildlife protection and boating. ba s 4 » f CG \ e ° = . The proposed permit system makes distinction between "minor'! and "major'' permits. The time limits for administrative action are cleariy defined. A decision on the coastal zone permit application by the Commissioner of Conservation and Cultural Affairs is required within 60 days for minor permits and 90 days for major permits. Presently, there is no time limit specified for most permits. If any decision of the Commissioner is appealed to the Land Use Appeals Board, this Board must render a decision within 90 days forminor permits and 90 days for major permits. All single and two family residences will be "minor" permits and all development seaward d’ the line of. mean high tide or which tnvolves submerged lands will require a ''major '' permit. Applicants for ''major' permit will be required to submit ‘Environmental Assessment Forms "' which include information on both environmental and economic aspects of the proposal. Economic Aspects of the Proposed Permit System The stipulations of time limits fer administravive action can potentially result in great savings for private developers and consequently che local public. Excessive delays resulting from the present system can cost private developers and the public additonal expenditures as a result of inflation, construction cdsts increases, and the cost of capital. In addition, excessive delays and unclear guidelines have undoubtedly discouraged eccnomic development in some areas. The monetary value of the savingswhich could result from the proposed system is impossible to calculate; however, et the very least, a savings of 1.0 - 1.5 percent a month in construction costs increases could occur as a result of swift action in perrits. _ Additional savings can be expected as a result of the elimination of uncertainty and confusion associated with the existing system. The preparation of an impact evaluation for some major projects may require additiona) expenditures by a developer - private or public. In most cases, the proposed system will not require more detailed information than is now required. tn addition, since many large coastei projects must have an Army Corps of Engineers permit, the preparation of such an assessment for those kinds of projects is necessary regardless of the local requirements. The consolidated permit procedure and Bureau of Enforcement will require additional personnel, a much greater expenditure of funds than is presently allocated to DCCA for similar uses. Primarily these funds will be used for personnel, administration, and purchase of materials, supplies, and equipment. The Bureau of Enforcement will require substantial funds for personnel training and equipment. Purchase of boats and mator vehicles will account for much of the Enforcement Bureau expenditures. An approved program will enable the Territory to receive federal funds (80% matching grants) for the above purposes. The local share can be contributed as '"' in kind services.'' The exact amount of federal funds is unknown at -20- ed a 1 Ld * ' ‘ " 4 + ar this time; however, the absolute minimum available is $180,000. According to federal officials, the likely amount is in the neighborhood of $500-600 thousand, an amount which the Territory can easily match with no additional out-of-pocket expenditures locally. A rough estimate of the’minimum federal funding level necessary to implement the proposed program is $500 thousand. Congressional authorization for expenditures presently extend through federal fiscal year 1980. There is very little Likelihood that this federal program will be discontinued. Additional personnel and equipment expenditures will have a beneficial effect upon the local economy. An additional $500-600 thousand will be spent locally during the first year. It is highly unlikely that this amount will decrease in future years, rather it will likely increase if the program is indeed successful. It should be emphasized that this funding is for administration and day-to-day management activities. Additional funds are avallable for land purchases, on-going planning, research studies, personne! training programs, interstate planning, and energy impact mitigation. These provisions of the federal CZM Act are covered later in this analysis. ° -2\|- Pty ‘ com 1 Em mH He HEHE HE HE HE HE HE EE a a + The Coastal Policies Section 902 of the proposed Virgin Islands Coastal Zone Man- agement Act of 1977 (Bill No. 7665) outlines the general findings and goals of the management program. These goals have been developed based upon an analysis of existing governmental policies, resource capabilities and likely future needs of the Virgin Islands. These coastal goals reflect: the need for economic development, the conservation and preservation of significant natural resources, and the perpetuation of traditional] shoreline uses. In order to accomplish these goals and to provide a context for establishing rules and regulations, a number of major policies are included in the proposed Act (Section 905 (a)). these policies must be used by the Commissionerof Conservation and Cultural Affairs as the basis for granting, denying or modifying coastal zone permit applications. The policies can be grouped into three broad areas: those relating to development practices, those relating to the natural environment, and those relating to coastal amenities. 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A{,ed07 - Aqypenb ,e}uawu0s;aua pue 31Ua9s s{DajO1g - @SOY} JO SI!IS{4azoeseys ay a2dueyUa pue 499}30I0d OY (8) . : "BULL 2IOYS By} 03 Ssazze : SELQNd aplAoid 30 aijnbse oF me, Aq papyAosd se sarouase Dy1qnd yo sa1qitlq!suodses pue saiqjnp 40 aduewsojsad ayy asnaxe 2l LPeys sou ssacs5e 311qnd Gulysixa 23147594 [Leys Uo!zIeSqns simu! GuryiON -“Aemssanze aya Jo Alijiqet, pue ad.ueuaquleuw soy AII|Iqrsuodsas + "Qo0a]puy ‘ 7220419 a y ’ ’ Y . e r coy td a9 ‘ The Land and Water Use Plan The Coastal Land and Water Use Plan constitutes a suggested comprehensive plan for the development of the first tier of the coastal zone. Ideally, al! zoning amendments, capital improvement programs or projects, government Jand acquisition programs, land subdivisions, and other development activities should be, consistent with the Coastal Land and Water Use Plan. A plan of this type is intended to serve as a policy guide for decision-making relative to development activities in the first tier “of the coastal zone. The proposed Land and Water Use Plan represents an attempt to identify those areas of the shorelines which should be reserved for certain water-dependent, industrial uses, environmental protection uses, and public use areas. In its present state of development, this land and water use plan is offered as a recommended guide to the public and to public decision-makers concerning future developrent in the coastal zone. The proposed legislation clearly identifies this plan as a working plan which its to be futher refined within one year of the passage of the proposed act. It does not and will not modify the property development rights that presently accompany the existing zoning law. Under the proposed law(Bill NO. 7665), the Planning Office, the Legislature and the interested public will be afforded an opportunity to review the existing zoning law and make recommendations within a year regarding any zoning changes. Until such time as zoning changes are approved by the Legislature, the present zoning regulations remain in full force and are unaltered. The principal mechanism which has been used to allocate and manage land uses in the Territory ts the Zoning Law. Since many ’ future land and water uses will be dependent in part upon development patterns associated with the present zoning, the existing system is an integral part of any future planning or economic development process. ’ The Virgin Istands Zoning Law establishes seventeen separate zoning districts, ranging from agricultural, residential, industrial, and waterfront to public use classifications. [nell of the districts a variety of uses are permitted as a matter of right, as accessory, ur under specified conditions, The present Zoning Law was enacted in 1972 (Act. No. 3284). Al! zoning changes or amendments require public notice and hearings in addition to legislative and gubernatorial approval. , Under the present zoning, most, if not all, of the remaining sandy recreational beaches not presently developed are zoned for high or medium intensity uses (W-] or R-3), while the vast majority of the shoreline is zoned for low density residential uses (R-1] or R-2). If the shoreline were to be developed strictly in terms of present zoning, local récreational needs would have to be met using -30- * . * » t 1 fa . . mn jae existing publicly owned shoreline areas, The growing population centers in eastern St, Thomas and central north-central St. Croix presently have limited recreational areas and even in the absence of additional population growth in these areas, additional beach/ recreation areas are needed, With the exception of National Park Service lands on St. John, very little of the shoreline is protected for conservation, or wildlife habitat or as natural buffer zones. In addition, the existing zoning law makes no provision for allocating scarce shoreline areas for water dependent uses. Economic Aspects of thé Proposed Action Since the Land and Water Use Plan will be superceded by the existing zoning, there is, in effect, no change from the present situation. What the Land and Water Use Plan does do js to clearly establish the intent of the Legislature and the Planning Office to carefully review existing shoreline uSes and needs including loca! recreation needs to determine if zoning changes or other actions are required. It is unlikely that this one year study period will affect the economy in any way. Should any development occur during this period, the applicable zoning regulations are in full force. Areas of Particular Concern The detailed examination of all the coastal areas of the Territory has revealed that. there is a definite need for guidelines to be established for development in certain limited locations in order to assure that proper development occurs. Presently, there is no com- prehensive development plan for the Virgin [tslands. As a result, priorities and recommendations for future development of the coastal zone must be clearly identified through the Coastal Zone Management Program. Just as the proposed land and water use plan is an advisory plan, the fdentification and recommendations for "areas of particular concern" also function as advisory plans for development of specific geographic areas. Existing zoning regulations wil! remain in full effect forthese areas also. The proposed Coastal Zone Management Act includes provisions for the adoption of the recommendations and priorities for areas of particular concern as a guide for evaluating future development itn these areas (section 905 (b)} These recommendations are detailed in Chapter 7 of the Preliminary Coastal Zone Management Program, and as an appendix to the.proposed Legislation. These areas are identified In Figure 1, -31- i. FIGURE 1 AREAS OF PARTICULAR CONCERN i. d oS o af, 4 7 oe B. Se “So y=, "ss i. oe e3 10 3 O10 nO Ss ' 7, — 1 ST. THOMAS ST. CROIX 1. St. Thomas Harbor and Waterfront Christiansted Waterfront 2. Botany Bay Southgate Pond - Cheney Bay 3. Magens Bay and Watershed . Green Cay 4. Mandahl Bay Isaac Bay - East End 5. Vessup Bay - East End Great Salt Pond Bay 6. Mangrove Lagoon - Benner Bay Southshore Industrial Area Sandy Point ST. JOHN Frederiksted Waterfront Salt River - Sugar Bay 1. Enighed Pond - Cruz Bay 10 St. Croix Coral Reef System 2. Chocolate Hole - Great Cruz Bay 3. Lagoon Point - Coral Harbor rr} a * * « i i 4 w 4 The specific recommendations are an outgrowth of the coastal zone planning process and represent a synthesis of many diverse considerations. In most cases, the recommendations reflect a refinement &d the policies and use recommendations included in the proposed legislation. <A brief examination of the recommendations for each of the areas is included in the following section. 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JOOP -3no wesboig saipnys |eluawuod}Aug ue se srsas JUlog u0Obey dey papuauworas AjGuos3s Ss} 3} ‘“papasu aq [fm UOlIaIOINd Y3IM UO}JeZ! (19M BdUe{eq OJ JUsWabeuew ysed yngasey ‘waysds HAeg FEAF! 44dL_ aYyZ OJU! JUusog UooheZ jo UOISN;oUE 3yQ sestopua A,bu013s wesboug juawaSeuew ouo7 jeqseo) ay) Apg [&409-Jupjog uoobey (£ “szoedu} (ensfA pue peqUawuos) Aua aZiwlujyw oy se dauuew e@ Y2NS Ul sUuOp aq PLNOYs a|Oy a3e1,090y9 pue Aeg ZN4} 2e94N JO JUBWdO;aAapP vuniny ‘ses4e asayz 03 pa}; (dde Aq39!435 3q pynoys AuswdojeAap sadojs daaqs pue ‘Ssayse0q ‘sanoubuew ‘spuod 31,eS 03 j2edseu YIIM SUC! JepusWWO IE JUaWebeUueWY |aUOZ [215209 ayL ‘“sAofua Ayjuasaid ease ayy ey? $313! UdWe ayy Aosqsap Jou 4, J|M a,OH |a3ejOD049 pue Aeg znJy e919 yO Juswdo|sAap Jey} |unsu; 03 BdI4Z4yNs pjnoys uetd syya Ui pauy_Ino sasyaspod ayy ‘Ay peasuag Aeg ZN1) 3eB1N-3lOH BIepO30yQ «= (Z ‘des} ues) pas e& se vuoi iounj S$,puod yes ay3 a9e]dat 0] Uayed aq 3snwW sauNnseay {O42U09 e5euyeip pue uorsosa 6u0136 ‘syUawaAo4dut pasodoid Aue yO voi jonNszsuod Buysinp Ajyisorsd ybry U2eA!& aq 3smwu JuWoUOI;/AUa SU! 4ewWaYy. 4O UO!}2eI08qg *pasepisuod aq ysnu 4sease puog 31eS JO JUsUdO;eAap UO syureszsuod ayz° ‘puog peybruZ ul yon Aue 4Oj UO13! pudDd er eitnire SUOLJEpUsUWO OY . . e f eof ‘ . a ae » > . ” . ' £ o Intergovernmental and Public Involvement One of the most beneficial socio-economic impacts of the proposed program is that it encourages citizens to become involved in the management of coastal resources. The Program exhorts and/or requires the direct Involvement of Federal and local government agencies as well as further efforts from the public and private sectors. . Public involvement measures are found in the development and continual revision of rules and regulations, the issuance of permits, appeals procedures and the process for making program amendments and zoning changes. Because of the Federal! consistency requirements of Section 207 of the federal act, actions of Federal agencies must be consistent with the provisions of the management program. The Planning Office and the Department of Conservation and Cultural Affairs will be developing rules and regulations both immediately to implement the program, and from time to time to revise standards, Working on these guidelines will entail public imput and participation in the development stages. Furthermore, the VICZNA requires that public hearings be held before forma! adoption of the rules and reguiations. These rules and regulations are of course subject to review at any time by the Legislature (VIC, Title 3, Chapter 35). Activities which will recuire a major permit will require public notification and hearing at which time public views concerning the possible consequences of the activity can be voiced. tn addicion, section 906 of the VICZMA requires review of major permits by retevar.t Virgin Islands public and private graups and Federal agencies, There is clearly defined appeals procedures for any aggrieved person (Section 910). The Board of Land Use Appeals is a citizen board which may overide the action of the Commissioner of Conservator. and Cultural Affairs. Furthermore, the Board is required to hoid public hearings on appeals to provide a public forum for discussion of the appealed permit decision. Amendments to the Management Program must follow the same procedures as amendments to the zoning law. Publtc notification and public hearings must be held and the Legislature must act on the Proposed change. Any zoning amendments must follow the prescribed procedures in the Virgin Islands Code (Title 29, Section 238). Each individual, as well as adjacent property owener, must be notified of the proposed amendment. Public hearings must be held and the Legislature must act on the amendment. Public Access/Acquisition The policies for access-are one of the most unique to coastal zone management since,they deal with the problems of sacia] equity, the benefits of which are not easily quantified. The issue is directed toward the responsibility of a society to protect the ~45- a ‘ Dm eH He Oe , 4 1 > { é ar rights of all of its citizens. Despite the provisions of the Open Shorelines Act which reaffirm the customary use of lateral shoreline access, and the provisions for requiring access found in the Industrial Incentive Act, access to the shoreline is still a coastal issue of consequence.’ Physical access is addressed in section 905 (a) policies, as well as in the existing statutes. While the policies will assure the social benefits of physical landward access, it will nat be required in all instances. Access may be a provision of a major coastal zone permit under certain circumstances and with certain stipulations. The rules andregulations will serve to further operationalize these circumstances. It is likely that landward access would be required of all new hotel and: beachfront condominium developments. In any event, dedicated accessways will not be required to be opened to public use until a public agency or private association agrees to accept responsibility for maintenance and liability of the accessway. The most likely economic impact of increased access will be the necessity for expending additional funds for maintenance, life- guards, clean-up, etc. Cd Visual Concerns Perhaps the most apparent impact of human activity on the Virgin tslands coastal] zone has been a visual one. in sore areas the visual resource remains natural, and in others develoomnent has respected the special visual] qualities of the coastal envirenment, but some of the coastline has been degraded by poorly designed development. In these areas there are buildings that are obtrusive being inappropriate to nearby landforms and inconsistent with the pattern and scale of existing development. There are signs and overhead utility lines that block views and create visual clutter. There are visual scars left by cutting, grading, filling, and vegetation removal, and this is often accompanied by the erosion that results from the alteration of natural landforms. There are, also, inadequately landscaped developments that detract from their natural setting rather than being enhanced by it, The Territory's coastal zone is a visual, educational, and aesthetic resource of considerable worth. Both residents and -visttors alike benefit from the visua] attractions which our natural setting affords. The policies on protecting visual resources will provide long-term benefits, and will not be an irretrievable committment of resources. While individuals may resent the permit process regulating the siting characteristics for development (design standards, location, landscaping, etc.) the policies recognize that scenic and visual qualities are . resources important to the public as well as to the economy of the Territory. In some instances, the policies may result in additional development expenses. Long-term benefits in the form of visitor attractiveness and protection of property values will likely occur. a? ’ ? t 7 > ‘ t } Economic Development The management program's impact on employment and cther business investments will vary for major industry sectors. Investment and employment potential in fisheries, certain tourism activities, and commercial recreation, marinas and port facilities will be enhanced through the incentives of the regulatory policies. The long-range viability and security of these industries in the coastal area will be protected and encouraged, but the costs of doing business in the coastal zene may go up for some industries which must allow for public access and environmental protection standards. This added ” investment stimulates other businesses, but it might also make certain business development or expansion programs questionable. Coastal dependent industries will benefit as they have not donc before from the priority siting they are given under the Act. The trend in many areas has been for non-dependent activities which preclude space for coastal dependent industries, such as fisheries, marinas and port facilities that depend on a shoreline location. (1) Construction and Commerctal/Industrial Activities One of the primary economic reasons for the management program is that it will promote, through reduced uncertainty and water- dependent siting priorities, an atmosphere which is conducive to the long-run economic development of the Territory. [Ff this aconormic development does not occur, the construction Industry in the Islends will be forced to rely mainiy upon maintenence and replacement construction activities for its survival. This industry witi alse benefit from construction of port facilities and harbor tmorcvements and sustained growth in residential development which will accompany economic development. The program's policies with regard to sand extraction will lower construction costs and encourage development. _ The permit process, with its specified time Timits for action and reduced uncertainty, will result in cost savings as a result of tess delays and clear delineation of procedures, This will benefit development activities of all kinds. Jt is likely that the permit process and some required mitigation measures provided for by the policies'’will result in higher inittal construction and development costs. Benefits to all sectors of the economy will occur as a result of higher quality development. These include protection of water and visual quality, and enhanced property values. [nvestment in rehabilitation of urban areas will also benefit the construction industry. {t is likely that there will still be periods of general economic decline, and growth spurts; however, these impacts cannot be totally attributed to coastal zone management. There are several policies that will impact the commercial/ industrial activities and subsequent employment. Water dependent -47- ? 3 2 * hd nd id j ae activities will be assured of sufficient suitable locations, Ports, marinas, and-docking facilities, power and desalinization plants and other water dependent activities are given a high priority along the shoreline, his type of commercial/industrial use fs necessary for the future economic well being of the Virgin Islands. Subsequent employment benefits will result. These new and expanded activities will bring an increase in the number and quality of job opportunities. The transfer of goodswill be enhanced, This wil} have the beneficial social impacts of greater availability of consumer goods and increased competition which will tend to lower costs to the consumer. Increased employment will result in higher tax revenues with resultant positive impacts upon local public services and facilities. There are several policies which may impact the manufacturing industries and subsequently employment as well. ‘The implementation of the program over the next several years could mean that some new manufacturing industries that are not coastal-dependent must be sited further inland and not near the more accessible waterfront areas. This could increase the costs of transportation for those industries, whereas before they were in a more competitive position as a result of their waterfront sites. The policies and recommendations which relate to development of potential industrial ereas such as Sub-Base in St. Thomas and inland sites on St. Croix will tend to offset this potential negative impact. (2) Commercial Fishing and Recreational Boating The Coastal Zone Management Program will protect and enhance the commercial fishing industry and recreational boating. Fishing uses have received a high priority use designation which ensures that needed facilities will not be lost to non-water dependent uses. Net only does the program support the commercial fisheries by protecting their harbor and support facilities, but it also protects the waters and habitat necessary to support the fisheries, The continued discharde of wastes into coastal waters and the alteration of wetlands, which the program seeks to prevent, could mean a significant loss of jobs for the Territory as a result of decreased fisheries production. The recreational boating industry will also benefit from the Program, The policies which relate to water quality. water dependency maintenance dredging, wildlife habitat and all of those which positively ‘—mpact the tourist industry will promote boating in the Territory. Because of the increased demand in this activity, it is expected that there will be increased demands for new marinas and support facilities. The program encourages: the maximization of use of existing facilities with as little adverse environmental impacts as possible, and where feasible the development of new facilities. The program recommendations with regard to additional marina areas . for Crown Bay, Red Hook, Cruz Bay, Christiansted and Frederiksted will increase the available marina facilities on all three islands. s 4 4 4 a” i af (3) Tourist/Recreation “ The Virgin Islands Coastal Zone Management Program wil] protect and enhance tourism, As is the case with fishing (except on a much larger scale), the thousands of jobs and mijlions of dollars in income from tourism are directly dependent upon the protection and wise use of the coastal resources. This fis one of the major reasons for the detailed policies on development, environmental resources, and amenity resources, .The permit system and the policies both seek to insure that the Virgin Islands wil! continue to be an attractive and competitive tourist destination, The proposed permit system will insure that all projects are considered in a timely and even-handed manner, with adequate safequards to protect existing or potential tourist attractions. The program policies will encourage expansion of existing hotel facilities rather than new construction on undevelorced sites, The permit system may result In higher development costs for beachfront hotels as a result of required mitigation measures and provisicns for physical access and visual concerns. The policies, especially thase which relate to water quality, reef systems, and mangroves wil! hein protect beaches from erosion as well as protecting and enhancine fishing, snorkeling and scuba diving - all important tourist attractions. a“ In addition, policies and recommendations regardince marine facilities and maintenance dredging will have a positive [impact upon charter boat and sport fishing industries. In effect, the permit system and the policies promote the development of a diversified tourist economy in which special attenticn is given to tne needs of fishing and boating industries, snorkeling and scuba divine, beach recreation, and cruise ship oriented tourism as wel] as beachfront hotels. Important considerations such as scenic quality and beach erosion are also included in the program. The provisions for public access and impact mitigation may result in additional development costs, The cruise ship orfented tourist industry is encouraged by water-~- dependency policies, maintenance dredging policies and recommendations for additional facilities in Crown Bay and Frederiksted. The direct beneficiaries of a successful tourist industry are, among others, establishments engaged in the sale of food and beverages, hotels and guest houses, theaters, sports and other recreational business, automobile services, professional and personal services, clothing, gift shops, taxis, tour buses, and travel agents. Indirectly, the entire economy benefits from the industry including the tocal government through increased tax revenues. The Program policies will continue to encourage the further development of recreation and tourism in the coastal zone to perhaps the disadvantage d private, residential, general industrial, and general commercial! development. It must be recognized that there is a limit to the amount of tourist and recreation growth which can be accommodated by the coastal zone. At some point congestion and resource limitations will bring about unavoidable cumulative impacts -49- v a aoa” - and social costs which cannot be satisfactorily mitigated. At some point in the. future, this issue must be confronted and resolved. While this issue is usually viewed in the context of industrial, commercial, residential and hotel-condominium deveiopment, similar results may occur with beach use, fishing and water sports development. The provisions of the Coastal Zone Management Program including the permit system, the policies, the land and water use plan, shoreline erosion, and energy development siting will assure that adequate monitoring and mitigation measures are carried out to insure that the greatest possible public benefits will occur while minimizing adverse impacts from worthwhile and necessary uses. The potential economic and social benefits of this activity cannot be valued in dollars and jobs. The policies on shoreline access, recreation and visitor facilities. protect the rights of the public to enjoy access to the coastal en- vironment and increases the opportunity for recreation. Increased access and recreation Is especially important for areas such as eastern St. Thomas and Christiansted and central St. Croix where large population concentration occur and which presently have limited re- creational opportunities, Although numerous attempts have been made, it is difficult to quantify the quality experience of a day at the beach or a look at a view such as from the scenic road on St. Croix or the Drake's Seat. overlook, or from the highway overlockina Coral Bay. Potential adverse impacts related to access wil] include increased maintenance and public service costs, and negative impacts on private property holders who prefer exclusive use. There may be additional costs to developers for conveyance of access rights. Many of the policies may be potentially growth inducing, resulting in adverse impacts upon water quality and related environmental and amenity resources, and public infrastructure. There will be heavier “ use Impacts on natural resources especially from the line of vegetation to the coastal waters, and, in some cases, the coastal waters and marine life. Other policies are provided to mitigate these impacts. (4) Ports With the exception of some locally produced fruits and vegetables and some seafood, almost all consumption goods and construction materials (Including sand) uses in the Virgin Islands are imported. While an increasing amount of imports arrive by air, most bulk materials are shipped to the Territory by ocean freight. Provisions for adequate port facilities are thus absolutely necessary for each of the three . main islands. Port facility development is addressed by specific policies and recommendations of the Management Program. In addition, the policies which relate to the maintenance dredging are applicable. Specific recommendations for each island are included in the program. -50- a | — om -™ zz —_ = 6 Mow * “ ae Upon completion of the new Southport on St. Croix, the Man- agement Program recommends that the existing facilities at Gallows Bay be developed for marine recreation purposes including a marina. Adequate space will continue to be provided for small inter-island trading vessels which frequent the area presently. It is recommended that all heavy freight traffic be shifted to the new public port. The program also recommends that the limited port facilities at Frederiksted be expanded, primarily for cruise ship docking and recreational boating including marina facilities. Positive economic impacts will result from conversion. of the existing areas for cruise ship and recreational boating. Increased tourist potential and recreational opportunities will occur with resultant increases in employment and overall economic activity. Economic savings will be achieved by consolidating all heavy port needs in a single, well-equipped and centrally located port. Likely benefits include lower handling costs, lessened traffic congestion in Christiansted, more timely scheduling for imports and exports, and a greater variety of available goods, all of which should lead to lower consumer costs. The port related recommendations for St. Thomas are directed mainly toward the Crown Bay~SubBase area. The program endorses the Port Authority proposal for dredge “and fill activity in the Crown Bay area for the purpose of cruise ship docking, freight and related uses. A marina proposal for the area is also endorsed, Presently, the existing Factlities of the West [ndian Company docks and the limited shallow draft facilities near Aspinall School are inadquate to accomnedate an increase [In the number of cruise ships. The Crown Bay propesal would provide benefits in terms of additional docking and warehousing and bulk storage facilities and also in terms of encouraging the redevelopment of the entire Sub8ase arga for industrial and commercial uses. Additional benefits include those resulting from ‘the proposed marina and repair and maintenance facilities. Potential adverse impacts could occur as a result of lowered water quality and construction impacts. Construction of the project would result in the displacement of several businesses along the shoreline including 2 restaurants, and existing dock aniboat storage, several automobile sales and service operations, and warehouses. These activities would be forced to find other locations inland. Existing businesses would be adversely affected. Mitigation measures provided for in other policies would lessen possible negative environmental impacts. . The program also recommends additional facilities for Red hook | “including use of an existing salt pond for expansion. Since the primary use of the Red Hook facilities is for St. John traffic, the additional facilities recommended Or Cruz Bay and Enighed Pond are directly related. Most of the economic benefits from these projects would accrue, to residents of St. John in the form of better service at less cost, In addition, positive impacts from well planned development of the Cruz Bay beach and the recommended marina and recreation facilities at Enighed Pond would also occur. Potential adverse environmental impacts from destruction of the salt pond at Red Hook and Enighed could occur. Mitigation measures called for in other policies could lessen these impacts. -51- at ADDITIONAL PROVISIONS OF THE FEDERAL COASTAL. ZONE MANAGEMENT 1 ry F ’ q (1) CEIP Program The Coastal Energy Impact Program (CEIP) was created by one of the 1976 Amendments to the Coastal Zone Management Act of 1972. The purpose of the program is to assist states and local communities to meet the needs arising from new or expanded coastal energy activities. To be eligible for assistance under the CEIP, a coastal state must be receiving a grant under section 305 of the Coastal Zone Management Act, must have an approved management program, or must be making satisfactory progress toward the development of a management program. There are four forms of assistance available under the CEIP: a) Planning grants, 80% federal match - these can be used ' to help plan for socio-economic or environmental consequences of coastal] energy activities. The amount of the planning grant available is based upon.relative need of a particular area including considerations such as new employment from energy activities, population density, safety and environmental factors, and local planning costs. . aie b) Credit assistance, federal loan guarantee - these funds can be used to help finance new or improved public facilities or public services necessitated by new or expanded coastal energy activities. The amount of credit assistance available is determined by a process similar to that of planning grants. Use for funds could include schools, roads, hospitals, police and fire protection, etc. » c) Repayment assistance - thls is available to states In case they cannot meet obligations incurred under credit assistance program. d) Environmental amelioration grants, 100 % federal grant These are primarily to help prevent, reduce, ao repair damage to environmental or recreation resources. This allotment is made on basis similar to planning grants. The Virgin Islands allotment for FY 77 (beginning October 1, 1976) was made on May 16, 1977. Only one new or expanded energy activity qualified for allotment purposes- Hess Offshore Terminal. Based upon this single facility expansion, the Virgin Islands was allotted: $ 59,423 = planning grants 1,794,200 credit assistance 24,466 environmental grant ’ = Obed ws The exact amount of next year's allotment is unknown. Recent action by the Legislature in ratifying the proposed VIRCO agreement will allow for the inclusion of this project in the calculation of the amount we may receive. If VIRCO had been inciuced last year, the amount of the planning grant and environmental grant would have doubled and the credit assistance would have been $8~-10 million. Next year's funding may reach this higher amount. The expenditure of approximately $85,090 in planning and environmental grants this year will have a beneficial impact upon the economy. More importantly. this planning money will allow the financially strapped Virgin Islands government to continue planning on vital issues which would not otherwise occur. The credit assistance funds are of the utmost importance to the Territory and especially St. Croix. The present need for additional schools, hospitals, police and fire, roads, water etc., is obvicus. Employment and population impacts of the VIRCG project will add to this need. These funds will allow for the much needed economic expansion on St. Croix, while at the same time, insuring that necessary public facilities are avilable. The economic impacts of this program are clear. (2) Interstate Grants Program This program provides federal matching funds (90% federal share} for planning and coordination between two or more coastal states (for example Puerto Rico and the Virgin Islands). The exact amount of next year's funding is unknown. The amount the Virgin Islands can receive will depend upon the total budgeted by Congress and the nature of the proposal, (3) Research and Training Grants Program This program can provide 80% federal matching funds to undertake further research studies related to coastal zone management problems. Possible uses of funds include: (a) erosion problems (both first and second tiers) (b) beach access problems (c) a complete study of the impact of the boating industry (d) location of off-shore sand deposits suitable for mining {e) marine productivity studies relating to the fishing industry. Benefits from this kinds of studies would accrue to the entire economy in the form of better information upon which to make decisions and actual recommendations for future courses of action. The provision for training funds is an issue of vital concern for the Virgin Islands, The economic and social development of the Territory cannot occur without adequate training programs. Potential positive impacts would occur in the form of increased we '? “ s wey 8 employment opportunities and provisions for upgrading the local work force skills. The total amount of funds available is not known. (4) Beach Access and Preservation of Islands Program This program provides 50% matching grants for the purchase of beach access and preservation of islands. The use of ‘these funds to acquire important beach lands will benefit all residents. Total] amount of funding for next year is unknown. - i i Lt F tm ——— 7) = ih | = =0 | | | wo | SSS © | | | | ‘{