A pivotal ruling from a U.S. Circuit Court judge has mandated the transfer of ownership of the Caneel Bay Resort’s buildings and infrastructure to the U.S. Department of the Interior. This decision enables the National Parks Service to proceed with the redevelopment of the iconic resort.

The legal tussle over the rightful ownership of the property began in 2022, involving EHI Acquisitions LLC and the United States Government. Originating from a unique ownership arrangement crafted between 1977 and 1983, the Caneel Bay Resort was built on a 150-acre tract that was part of a larger 5,000-acre donation to the National Park Service by philanthropist Laurance Rockefeller. While the land was deeded to the National Parks Service (NPS), the buildings remained under the ownership of Rockefeller’s company via a “retained use estate.” This arrangement included an indenture with a reversion clause, offering the government the option to acquire the resort buildings at no cost—otherwise, the land would revert to the resort’s owner.

The legal dispute intensified when EHI, having acquired the retained use estate, claimed full ownership of both the land and resort buildings after the government declined a 2019 offer to assume ownership. EHI interpreted this “offer” as a sales proposition, whereas the government viewed it as a no-cost conveyance.

Judge Cheryl Ann Krause clarified this discrepancy in court, affirming the documents’ explicit intention for the land and improvements to be gifted to the government for a nominal fee of $1, as stipulated in the 1983 indenture. She stated, “To keep the land, the Government would have to accept the offer of the improvements. But if that offer were conditioned on payment, then the Government’s retention of that land, in effect, would also be conditioned on payments…meaning it would no longer be a gift.”

Judge Krause further underscored the non-commercial nature of the transaction, reflecting on the indenture’s clear direction for the integration of the Caneel Bay Resort into the Virgin Islands National Park, aligned with both parties’ philanthropic objectives.

Despite EHI’s arguments that the government intended to spend significantly to re-acquire the resort and their attempt to redefine “offer,” the court found these points unconvincing. Judge Krause dismissed these claims and awarded summary judgment to the United States, confirming that since no valid offer was made by EHI before the expiration of the retained use estate on September 30, 2023, the land’s title remains with the U.S. Government.

This ruling confirms that the government not only retains ownership of the land but also gains title to the resort’s structures, with EHI planning to appeal the decision. This marks a significant step towards the full integration of the Caneel Bay Resort into the national park system, reflecting the original intent of its benefactor.

David Schnittger of Squire Patton Boggs outlined the significant hurdles they faced last year in progressing the U.S. Virgin Islands’ policy objectives within a highly partisan environment in Washington. During a recent meeting with the V.I. Public Finance Authority Board, Schnittger explained, “Our efforts in 2023 were dedicated to navigating through the legislative gridlock to advance the agenda of the U.S. Virgin Islands.”

A primary focus for Schnittger’s team was advocating for the permanent extension of rum cover-over rates. He described this effort as a vivid example of the broader congressional stagnation affecting the U.S. Virgin Islands and Puerto Rico. “The 118th Congress has found it challenging to pass legislation across the board, leaving critical initiatives like the rum cover-over extension stalled,” he remarked.

In response to the legislative standstill, Governor Albert Bryan Jr.’s Washington representative, Terry Helenese, has established a weekly working group addressing the cover-over issue. This group includes key stakeholders from both the Virgin Islands and Puerto Rico, as well as industry representatives.

Beyond legislative advocacy, Squire Patton Boggs has successfully promoted the territory’s policy goals on sustainable energy and economic development by collaborating with federal entities such as the Environmental Protection Agency and the Department of Energy.

Concurrently, the law firm Winston & Strawn is striving to overcome congressional obstacles by working with V.I. Delegate to Congress Stacey Plaskett. Their goal is to secure earmarks in forthcoming appropriations bills that would fund necessary studies by the Army Corps of Engineers for the dredging of the Charlotte Amalie and Christiansted harbors, a step essential for their re-federalization and subsequent maintenance by the USACE.

Moreover, Winston & Strawn is actively pursuing equitable solutions for the residents of the Virgin Islands, focusing on issues like the unavailability of Supplemental Security Income and the rigid funding cap on Medicaid. “Advocating for fair medical treatment remains a cornerstone of our efforts,” stated Winston & Strawn partner Bryant Gardner.

Despite these extensive efforts by the territory’s representatives in Washington, the members of the PFA board were informed that achieving several key policy goals for the Virgin Islands still hinges on breaking through the ongoing legislative deadlock.

Congresswoman Stacey Plaskett has lauded the enactment of the Fiscal Year 2024 appropriations bill, marking a significant milestone with its presidential endorsement. This legislative achievement promises substantial benefits for the U.S. Virgin Islands through a comprehensive funding initiative celebrated for its cross-party backing in both Congressional chambers.

Characterized by its extensive support for economic growth, public safety enhancements, and family assistance nationwide—and by extension, in the Virgin Islands—the bill embodies a commitment to vital societal sectors. According to Congresswoman Plaskett, the legislation channels funds into pivotal areas such as educational initiatives, job training, and accessible, high-quality childcare. “This funding package champions essential services and programs that underpin education, workforce development, and childcare affordability,” Plaskett remarked.

The bill earmarks significant funding across various domains: $1.1 billion is allocated to the Small Business Administration to aid underserved business owners, $20.3 billion is designated for comprehensive disaster recovery efforts, and additional funds are directed towards combating the opioid crisis, specifically fentanyl. It also encompasses contributions towards Rural Health Programs, Career and Technical Education (CTE) State Grants, School-Based Mental Health Services, support for Historically Black Colleges and Universities (HBCUs), and the Low-Income Home Energy Assistance Program, among other initiatives.

Highlighting the bill’s transformative investments, Ms. Plaskett pointed out the strategic funding for education, healthcare, and climate change mitigation efforts that are critical to the Virgin Islands’ prosperity. “The legislative package makes unprecedented allocations towards Head Start, childcare, educational enrichment, workforce training, and placement programs,” she detailed. The bill also fortifies national defense, underscores the U.S.’s dedication to climate change countermeasures and global health improvement, and boosts funding for border security and cyber-defense.

Congresswoman Plaskett views the bill’s passage as a triumph for House Democrats, who she notes, “successfully protected community investments while countering several detrimental proposals by House Republicans, such as cuts to education and climate change initiatives.”