Bed and breakfasts, art galleries and financial companies fight over tax breaks

Kevin Rodriquez chaired the EDA meetings on Tuesday (Zoom screenshot).

The Economic Development Authority board, in a public hearing and decision meeting on Tuesday, heard cases involving half a dozen companies. All but one of the companies focused on financial services. And the one that didn’t offer financial services, the St. Thomas Tropical Botanical Garden, was leaving the program.

The Phantasea Botanical Garden, which opened in 2015, cited the 2017 hurricanes and the pandemic as reasons for its failed business model and the need to end its participation in the program. The council agreed to authorize the termination, but specified that the company would have to pay the corresponding taxes.

At the Enterprise Zone Commission meeting later today, the Commission approved two projects for its tax incentive program for, as its website describes, “vibrant communities that are now considered in trouble”. For example, one project would bring a bed and breakfast to the top floor of 7 Strand Street, Frederiksted, and a restaurant to the ground floor of that building known as Victoria House.

The second project is on St. Thomas in the Garden Street area in Charlotte Amalie. The project is an art gallery on Prindsens Gade. Commission Chairman Kevin Rodriquez said the art gallery is already popular and he has purchased art there. Nadine Marchena Kean, an EDA staff member who gave positive recommendations on both projects, said the street where the art gallery is located needed “a lot of repairs.” Both projects will now be eligible for property and income tax relief.

The Commission and the Bureau of the EDA are composed of the same members. Along with Rodriquez, Jose Penn, Gary Molloy and Positive Nelson attended all of the meetings. Member Philip Payne attended the morning meetings but had to leave before the Commission meeting. Haldane Davies was absent from all meetings.

At the public hearing, which opened in the morning for members, 2400 Services, LLC and Cypress Mortgage Capital, Inc made presentations seeking tax benefits.

2400 Services is owned by John Alexander, whose family is originally from the Virgin Islands, and he returns from the United States to run the business. The company will provide financial, consumer and real estate services to third parties engaged in the lending market.

Cypress Mortgage Capital describes itself as a correspondent loan company. Its website says it can help first-time homebuyers buy a home without depleting their savings, by offering low down payment options.

Alexander said 2400 Services rented an office in Frederiksted. David Kittle, CEO of Cypress Mortgage, said the company has an office in Christiansted.

Payne, reviewing the salaries offered by 2400 Services, said they weren’t good in the high-cost-of-living territory. He said, “$16 to $17 an hour are low numbers.”

At the decision meeting after the public hearing, Barrier Holdings and Red Bay Holdings received the incentives approval. The Autorité, during its public hearing on 16 November, heard representatives of these two investment companies plead in favor of their participation in the programme.

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