As a result of the proposed law, WICO’s net contribution to the tax offices would be zero and the historic structure would become the property of the general government and, if all goes well, a museum.
WICO operates and maintains the territory’s largest cruise port, the WICO Pier, and also operates the adjacent Havensight Mall, which is owned by the Government Employee Retirement System. Established as a corporation, WICO is wholly owned by the Public Finance Authority, a government agency VI. Therefore, she and all of her assets ultimately belong to the government.
WICO has a long history of paying a fixed fee – payment in lieu of taxes, of $ 700,000 per year – instead of paying corporate income tax, property tax or gross revenue taxes. Until 2006, WICO paid its PILOT in full, but since then has made partial or token payments. He has lost millions of dollars in his payments and currently owes $ 6.65 million.
During budget hearings in 2016, Director General Joseph Boschulte asked senators to consider reducing the PILOT, saying it was too high given the reduction in WICO ship calls and direct competition for ships by the docks managed by the VI Port Authority, a semi-autonomous government. agency that manages the territory’s airports and supervises and in some cases directly operates its seaports.
From 2003 to 2006, WICO carried an average of more than 1.65 million passengers per year, Boschulte told senators. But then the Austin “Babe” Monsanto facility, owned by VIPA, opened in Crown Bay, and two major cruise lines received lower fees than WICO’s in exchange for long-term docking agreements. , did he declare.
Then the travel industry was hit by the 2008 global recession.
Between 2007 and 2014, WICO carried on average just over 1.2 million passengers, a reduction of over 450,000 passengers, or 27%, per year, he said.
“This has translated into a loss of $ 2.5 million in maritime revenue for WICO per year. As a result, since the opening of the Monsanto Pier in 2006 and the resulting erosion of revenue, WICO has not been able to meet its annual PILOT obligation, ”Boschulte said during budget hearings.
The Estate Catherineberg building was constructed in 1831. The Danes considered it to be the residence of a governor, but instead decided to rebuild the existing Government House, starting in 1864. WICO, then a private company, purchased the property in 1917.
The government bought WICO in 1993. Around this time, WICO began renting out the historic former Danish Consulate to the government for $ 1 per year, apparently as a residence for Governor VI. Federal law declares Government House on St. Thomas the official residence of the Governor. Governor Charles Turnbull resided in Catherineberg for a short time and is the only governor to have done so. Although this is an important historic structure, built in 1831, it remains moldy and unsuitable for family life or entertaining.
The bill, sponsored by the Sens. Janette Millin Young (D-STT) and Kurt Vialet (D-STX), authorized the government to purchase the property and offset the cost of overdue PILOT payments. As amended, the bill would require WICO to pay the costs of converting the structure into a museum. All reduced PILOT payments would go towards maintaining the museum.
The votes to send the measure to the Rules and Justice Commission were: Vialet, Sens. Marvin Blyden (D-STT,) Dwayne DeGraff (D-STT,) Neville James (D-STX,) Nereida “Nellie” Rivera-O’Reilly (D-STX,) Tregenza Roach (D-STT) and Brian Smith ( D-At-Large). All the members were present.