Mapp announced $1.4 billion agreement to restart St. Croix refinery

Gov. Kenneth E. Mapp announced on July 2, 2018, that the Virgin Islands government had reached a $1.4 billion agreement with ArcLight Capital Partners to refurbish and restart the refinery at Limetree Bay on St. Croix.

According to the administration, ArcLight planned to invest about $1.4 billion in the project, creating more than 1,200 local construction jobs over 18 months. The administration said refining operations were expected to begin at the end of 2019, with as many as 700 permanent jobs, in addition to more than 750 jobs at the terminal storage facility.

Mapp said he had called the Legislature into special session for July 25, 2018, to consider and ratify the agreement.

Under the terms outlined by Government House, ArcLight would make a $70 million closing payment to the government, including $30 million for the purchase of about 225 acres of land and 122 homes, and a $40 million tax prepayment by a new refinery entity. After refining operations began and the prepaid taxes were credited, Limetree would make annual payments in lieu of taxes at a base rate of $22.5 million, with a minimum of $14 million and a maximum of $70 million depending on refinery performance.

The administration said 50% of annual revenues from refining operations would be directed to the Government Employees Retirement System, with projected payments of $300 million over 10 years. The proposal also called for the Public Finance Authority to purchase the Havensight Mall and the Port of Sale ground lease from GERS, with additional revenue from those assets also directed in part to the pension system.

Government House said up to $10 million from the closing payment would be used as an equity investment in a planned 110-room hotel at Yacht Haven Grande on St. Thomas. The administration also said portions of the closing payment would be allocated to income tax refunds, the Judicial Branch, a legislative complex on St. Croix, the Waste Management Authority, capital improvement funds on St. Croix and St. John, Paul E. Joseph Stadium, and reconstruction of the St. John Battery.

The administration said the amended terminal and refinery operating agreements together were expected to generate an estimated $775 million in government revenue over 10 years, including more than $600 million in new revenue from refinery operations.

Official source: https://www.vi.gov/u-s-virgin-islands-governor-announces-1-4-billion-landmark-deal-to-restart-refinery-in-st-croix/