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Legislature of the Virgin Islands P.O. Box 1690, Emancipation Garden Station St. Thomas, U.S. Virgin Islands 00804 ——○—— POST AUDIT DIVISION TEL: (340) 774-2478 September 25, 2025 MEMORANDUM: TO: Honorable Novelle E. Francis, Jr. Chairperson, Committee on Budget, Appropriations and Finance 36th Legislature of the Virgin Islands FROM: Post Audit Division SUBJECT: Lease Agreement LESSOR: Department of Property & Procurement LESSEE: Kobe Holdings, Ltd. PREMISES: a. Parcel No. 35F Estate Nisky, No. 6 Southside Quarter, St. Thomas, U.S. Virgin Islands, consisting of 18,077.4 U.S. sq. ft. or 0.415 U.S. acre of unimproved land more-or-less; and b. Unsurveyed portion of Submarine Base, No. 6 Southside Quarter, St. Thomas, U.S. Virgin Islands, consisting of 6,411 U.S. sq. ft. or 0.147 U.S. acre(s) of unimproved land more-or-less. TERM: Twenty (20) year period, with an option to renew for two (2) ten (10) year periods. The initial lease term commences on the first day of the month following approval by the Legislature and the Governor of the Virgin Islands. PURPOSE: The property will be used for commercial leasing and for other permitted purposes. LEASE SUMMARY BACKGROUND: Kobe Holdings, Ltd. is a locally owned and operated company doing business in the U.S. Virgin Islands since 2022, with the purpose of operating commercial spaces and other related purposes. Honorable Novelle E. Francis, Jr. Bill No. 36-0153 Lease Agreement between Property & Kobe Holdings, Ltd. REQUIRED SUPPORTING DOCUMENTATION DOCUMENT EXPIRATION DATE Business License 2/28/2026 Trade Name Registration N/A Certificate of Liability Insurance 11/2/2025 Certificate of Good Standing 6/30/2026 PAYMENT TERMS The lease requires an annual rent of $24,000, payable in equal monthly installments of $2,000, due on the first day of each month during the term of the lease. During the 24-month construction period, the rent will be reduced to $1,000 per month for the first 24 months. If all the improvements specified in the lease are completed before the end of the construction period, the full annual rent of $24,000 will begin in the month immediately following the completion of the improvements. After the second year of the initial term, and every year thereafter, the rent will be adjusted based on the Consumer Price Index, but the increase will not exceed 3% over the previous year’s rent. Additionally, the rent will never be reduced below the original annual rent of $24,000. A late charge of 10% of the monthly payment will be assessed if the rent is not paid within ten (10) days of the due date. IMPROVEMENTS According to the lease terms, the Lessee shall provide the improvements listed below at its own cost and expense, which are estimated to cost approximately One Hundred Fifty Thousand Dollars ($150,000.00). Improvements to the property include the following: 1. Excavation; 2. Mobile Office; 3. Equipment Maintenance & Storage Shed; 4. Security Fencing and Lighting; and 5. Concrete Parking Area. The improvements shall be completed no later than twenty-four (24) months after the Commencement Date of this Lease (“Construction Period”). Lessee agrees to keep the said Premises and appurtenances as repaired, in a clean, sightly, and tenantable condition, and to return said Premises to Lessor upon the expiration or other termination of this Lease, in as good condition as it was since the last repairs were made, less reasonable wear and tear from intervening use. LIABILITY INSURANCE Under the terms of the Lease, the Lessee agrees to: • Keep in force a policy of public liability and property damage insurance with limits of not less than: • One Million Dollars ($1,000,000.00) property damage, • One Million Dollars ($1,000,000.00) for one person injured or killed, and Honorable Novelle E. Francis, Jr. Bill No. 36-0153 Lease Agreement between Property & Kobe Holdings, Ltd. • One Million Dollars ($1,000,000.00) for any number of persons injured or killed in any one accident. • All of the said insurance shall be in a form satisfactory to Lessor and shall provide that it shall not be subject to cancellation, termination, or change, except after thirty (30) days prior written notice to Lessor. ADDITIONAL INFORMATION Detailed information on the following items can be found in the attached lease document: Items Page • Improvements 4 – 5 • Mechanic’s Lien 6 • Insurance and Indemnity 6 – 7 • Entry by Lessor 7 • Condemnation 7 – 8 • Cancellation, Termination, Assignment, and Transfers 8 – 10 • General Terms and Conditions 10 – 14 EXECUTIVE BRANCH APPROVALS Signee Title Department Date of Signature Lisa M. Alejandro Commissioner Department of Property & Procurement 6/3/2025 Lauren Doudreaux Assistant Attorney General Department of Justice 6/6/2025 Honorable Albert Bryan Jr. Governor Office of the Governor 6/10/2025 CONCLUSION The Department of Property and Procurement has entered into a lease agreement with Kobe Holdings, Ltd. for the purpose of conducting commercial leasing and related activities. Kobe Holdings, Ltd. has submitted an updated Certificate of Good Standing, valid through June 30, 2026. The Department has verified that the terms and conditions of this lease are consistent with those of similar agreements issued by the Department and confirms that the lease complies all applicable policies and regulations. Based on this confirmation, the Post Audit Division recommends the approval of the lease between the Department of Property and Procurement and Kobe Holdings, Ltd. Theodora Philip, DBA. Post Auditor Honorable Novelle E. Francis, Jr. Bill No. 36-0153 Lease Agreement between Property & Kobe Holdings, Ltd. APPENDIX I Honorable Novelle E. Francis, Jr. Bill No. 36-0153 Lease Agreement between Property & Kobe Holdings, Ltd.