USVI Public Records

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I - —a— --—-—- --—‘-- .- -- unmco, rni.,Ct I I TOM FADER Bureau Chief ST. CROIX — The Economic Development Commission heard requests for tax benefits from an adsdng health care company and a new company preparing to manufacture and sell drinking water during a public hearing Tuesday. in addition to hearing hum the two new applicants — Plessen Healthcare LW and Ynsuf Drink Ing Water the. — the EDC board heard a request from the French mans Reef and Morning Star Marriott Beach Resort on St. Thomas to extend Its EDC cer tificate for 20 marc years. The EDC, a component of the VI Economic Development Authority that provides compa nies with tax breaks in exchange for making capital Investments, hiring residents and giving char itable conhibullons, held the pub lic hearing via video conference between its offices on SL Cmlx and St. Thomas. fleasen Reahhr U: The company, an Ambulatmy Surgical Center that opened in July2015. Is seeking tax benefits on the facility fees It spends on the ASC lnfrasftucbire such as equipment and supplies. EDC, PAGE 2 A Companies for bottled water, health services seek EDC tax breaks I I - - IWWWflwwnt S___ - — — w. FROM PAGE 1 The EDC board heard testimo ny In support of the application from the Gov. Juan F. Luls Hospital, as well as In opposition from representatives of two eye clinics — Sterling Optical and Vision Center. Jan Tawakol. flessai Healtirare founder, thief executive officer and president, said his company — which he clarified is a different entity fiom Messai Ophthahnohwjr — Is only seeking tax benefits for the facility fee to help It purchase medical supplies and equipment as well as pay its nurses, staff and rease to the Government Employees’ Retirement System building. The company wants the benefits in provide a health-care infrastructure on St. Croix for physicians to use the facility. Wanth Ruben. JEt’s chiefocec utive officer, said the hospital sup ports tax benefits for Messai since it supported JEt after Hurricane Maria and continues to support it during anergendes. For instance, she said JFL counted on Plessen three weeks ago when the hospi tal’s operating room closed. She said Plessen rapidly accepted patients and worked with JFL physicians to provide continued• care to the patients. Sterling Optical, represented by attorney Trudy Fenster, testified in opposition to granting tax ben efits to Plessen because It would aeate an unlevel playing field” for other health care entities. Vision Center, in a letter that was read into the record, also opposed the application because giving Plessen tax benefits would give the company an “unfair advanthgC over other health-care entities. Tawakol clarified Plessen, which provided a $1.4 million capital Investment, isn’t seeking tax benefits for physician income or for any optical retail store. Philip Payne. EDC vice chair, asked what is included in the facility fee. Tawakol said Medicare pays doctor fees sepa rate from facifity fees. He said physicians use the facilities at Plessen Healthcare to treat their patients so they submit a claim to Medicare to get paid sepa rately. Plessen submits the claim for the facility fee to pay the rent and nurses as well as purchase equipment and supplies that are available for the physicians. “Under Medicare it’s a com pletely separate operation he said. it’s a health-care suppli er versus a health-care provider. which are the physicians.” Tawakol noted during the hearing that the EDC board pre viously granted tax benefits to another ASC. as well as a hemodialysis treatment center. The board also has previous ly approved granting tax benefits for Plessen Healthcare twice. The health care supplier ultimately got denied at the level of the executive branch both times. It is, however, no longer a requirement for the governor to sign off on EUC certificates since the Legislature voted during leg islative session on June 14 to override Gov. Kenneth Mapp’s veto of Uffi No. 32-0175. which strengthens the authority of the EDA and removes the governor from the EDC’s approval process. Yusuf Drinking Water 112: The company, which has already purchased $2.5 million In equipment plans to construct a building behind the Sion Farm Shopping Center to manufac ture drinking water, focusing its effort on 16.9-ounce bottles. The company, a vision of longtime grocery store operators, plans to ultimately invest $10 million and hire 50 residents. The company’s principals — Mater Yusuf, better known as Mlke,’ owner of Seaside Market and Deli, and Nejeh Yusuf — told the EDC board about their abifity to manufacture water in the building during a power out age using microturbines, noting the necessity in the aftenuath of hurricanes. in addition to using well water, the company plans to use cistern water as part of the bottling process. It has invested more than $250,000 for equipment to offer distilled water to customers in plastic bottles and 5-liter con- talners that are free of BPA. or bisphenol A, an Industrial chem ical that has been used to make certain plastics and resins since the 1960s. Payne asked whether Yusuf Drinking Water, which will be branded as such trade names to ‘include Caribbean 1-120, Blue Oasis. Island Crystal and MyVI, will move forward with its manu facturing plans if the EDC does n’t grant tax benefits. The Yusufs said they are moving forward regardlesa ‘ibe commitment’s been made.” NeJeh Yusuf said. Frenohutin’s Reef and Morning Star Marriott Beach Rescrt The St. Thomas hotel, which sustained significant hurricane damage last September, Is corn- nutted to invest $170 million to rebuild so the resort can reopen 173’ ecember 2019. The company, however, Is seeking an extension ofits tax benefits through 2050 in exchange for rnaldng such a large investment The hotel ha a 1 5-year EDC certificate that isn’t set to expire until 2030. It receives 90 percent lax exemptions. The hotel, how ever, is seeking to modI’ its cer tificate to receive 100-percent tax exemptions. It Is also seeking a 10-year extension to 2040 from 2030, as well as an additional 10- year extension to 2050. The resort received a two-year employment waiver through August 2019. It plans to hire a minimum of415 frill-time employ ees when It reopens in December 2019. The EDC board also addressed a compliance mailer for the St Thomas resort, which appeared for resolution ofnon-compliance. The board voted during executive session in a decision meeting for the company to pay $94,370 to the Industrial Promotion Ad Fund. The EDC board addressed a compliance case during the pub lic hearing for Tecoma Asset Management HE as well. Theoma Asset Management The company, which had its entire staffof five employees relo cate to florida after Hurricanes irma and Maria struck the teth tory last September, requested a 2-year suspension of benefits to Dec. 31, 2019 from Jan. 1. In addition to the staff reloca tion after the hurricanes. Greg Ferguson, representing the com pany, said the federal Tax Cut and Jobs Act of 2017 made It “economically impossible” for stateside residents to invest In VI corporations. He noted the prin ciple of Tecoma was never a VI resident He said the new tax laws make It unfeasible from an eco nomic standpoint for the principle to continue to own a company In the Virgin Islands. The EDC board wifi make a decision on the company’s request at a future meeting.