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Seeking Solutions: WICO’s Strategic Efforts to Overcome Financial Challenges

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A view of the bustling WICO Dock in St. Thomas, capturing the essence of its importance to the local economy. Photo by ERNICE GILBERT, V.I. CONSORTIUM.

The West Indian Company (WICO) is navigating through financial turbulence, aiming to reinvigorate its economic stance and fulfill its obligations to the government. During a recent session with the Senate Budget, Appropriations and Finance Committee, WICO CEO Anthoney Ottley shared insights into the hurdles the company is confronting, particularly in the aftermath of the pandemic.

The core of WICO’s financial strain lies in its struggle to meet the Payment in Lieu of Taxes (PILOT), a $700,000 yearly fee owed to the Government of the Virgin Islands. This challenge has accumulated over $10 million in debt since 2006, despite partial payments. Ottley pointed to the rise of Crown Bay and the Austin “Babe” Monsanto Marine Terminal as key factors diverting cruise traffic away from WICO, exacerbating its financial predicament. A novel approach to the PILOT, proposing a payment system based on a percentage of net operating expenses, was suggested as a potential pathway forward.

The Senate Committee engaged in a robust discussion with Ottley, exploring various avenues for WICO to enhance its revenue streams. Currently reliant on passenger fees and rental incomes, WICO is exploring diverse opportunities to bolster its financial health. Initiatives include diversifying dock offerings and developing adjacent properties, with a keen eye on innovative partnerships, such as leveraging shore power connections for docked cruise ships—a collaborative venture with the Water and Power Authority that is under consideration.

Committee members, including Senator Novelle Francis, encouraged WICO to articulate its strategies for financial improvement in a white paper, highlighting the mutual benefits of revising the PILOT framework. Additionally, suggestions were made to utilize untapped assets, such as the development of Estate Liverpool land and leveraging the Estate Catherineberg property, to generate additional income.

As WICO aspires to achieve pre-pandemic passenger volumes by 2025, the company is committed to exploring every avenue to revitalize its operations and settle its debts. The dialogue with the Senate Committee underscores a collective determination to secure a sustainable future for WICO, reinforcing its pivotal role in the Virgin Islands’ economic landscape.

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St. Croix Business & Professional Gala Honors Local Achievers

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The St. Croix Chamber of Commerce held its esteemed 2024 Business & Professional Gala on Saturday evening at the Grapetree Bay Hotel, situated on the picturesque east end of St. Croix. This prominent event in the business community’s calendar drew a diverse group of distinguished attendees, including their families and colleagues.

The evening began with lively live music and networking, enhanced by a cash bar and a specialty drink area sponsored to offer complimentary signature beverages. Guests were treated to a variety of gourmet hors d’oeuvres.

Akeel St. Jean, the chairman of the St. Croix Chamber of Commerce board of directors, highlighted the essential role of the private sector in driving the economy and supporting the U.S. Virgin Islands’ low unemployment rate in his address.

The award ceremony proceeded efficiently, honoring excellence in six categories. The honorees included Kisha Christian of Neighborhood Pharmacy as Businesswoman of the Year; Quality Food, represented by Stephanie Karalius, as Business of the Year; Marcy Heistan from Fly the Whale as New Business of the Year; and Mafi Hamed of the Market as Businessman of the Year. The Women’s Coalition of St. Croix was named Nonprofit of the Year, and IB Designs was awarded Small Business of the Year.

The gala concluded with an enthralling performance by Kaiso Caribbean Entertainment, featuring fire dancing and other captivating acts, ensuring a memorable end to the evening. This event not only celebrated the successes of local businesses but also bolstered community spirit and entrepreneurial vigor on St. Croix.

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Financial Shock Hits Republic Bank Customers in BVI and Wider Caribbean Due to Processing Errors

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Recent weeks have seen significant turmoil for customers of Trinidad & Tobago-based Republic Bank’s Eastern Caribbean unit, who have faced unexpected withdrawals from their accounts. These withdrawals, the bank claims, result from unprocessed transactions dating back weeks, months, or even years. This issue has disrupted lives and businesses across multiple territories, including the British Virgin Islands.

At the start of the month, Republic Bank (EC) issued a statement attributing the problem to “technical issues stemming from our conversion exercise.” This conversion followed Republic Bank’s acquisition of Scotiabank operations and affected over 12,000 customers. The bank conducted a “thorough verification exercise” to identify the transactions, and customers received personalized communications detailing the relevant transactions for transparency.

Despite this, many customers remain dissatisfied. A letter signed by 216 customers in Anguilla, addressed to the Eastern Caribbean Central Bank (ECCB) Governor, Anguilla’s Finance Minister, and Republic Bank’s local country manager, reported receiving emails around April 27-28, 2024. These emails notified customers of banking errors dating back to 2021. By April 29, Republic Bank processed debits that caused substantial overdrafts, leading to significant financial hardship for some customers.

Similar complaints emerged from Saint Lucia, Dominica, Saint Vincent & the Grenadines, and St. Kitts and Nevis. While some debits were minor, others amounted to thousands of dollars, causing considerable distress. One customer faced a significant financial challenge as his available funds were depleted on the same day his mortgage payment was due.

Customers argue that Republic Bank violated its policies by reclaiming funds after such an extended period. The bank’s Account Services Agreement states that automated transactions should post on the transaction date or the next business day, with longer times for transactions in different jurisdictions. The agreement also limits the bank’s liability for delays or errors resulting from its services, which the affected customers claim the bank has breached.

The ECCB, which regulates banking in the sub-region, stated that while the delay is aggravating, Republic Bank’s actions are not illegal. On May 16, the ECCB announced an independent audit of the situation, which may lead to further actions within its limited powers.

Responses to the ECCB’s intervention have been mixed. Francis Severin, Principal of the UWI Global Campus, praised the audit as a step towards consumer protection but remains skeptical about its effectiveness. Similarly, Dr. Dalano DaSouza, a university economics lecturer, expressed doubt that the audit would yield substantial results and called for an urgent revision of the Banking Act to enhance consumer protection.

Customers face significant challenges in disputing old transactions due to the need for extensive record-keeping. Republic Bank has offered measures such as payment plans, reversing overdraft fees, and waiving fees for bank statements. However, these efforts have not fully reassured customers. Severin criticized the bank’s past failures to uphold promises and questioned the Eastern Caribbean unit’s operational efficiency.

This situation mirrors a similar incident four years ago affecting Republic Bank’s Guyanese customers, though the previous issue involved a shorter delay. As the current debacle unfolds, customers are considering their future with Republic Bank. Severin suggests writing off the oldest transactions as a goodwill gesture, while DaSouza plans to reduce his business with the bank and seek alternatives.

The incident has shaken customer confidence, and Republic Bank’s efforts to address the situation will determine whether customers continue their banking relationships or seek alternatives.

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Historic Preservation Signage Rules Stir Controversy Among St. Croix Business Owners

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Frustration over Historic Preservation Commission (HPC) signage regulations took center stage at a meeting of the St. Croix HPC last Thursday.

Several businesses appeared before the HPC board for signage violations, including those located in the Pan Am complex in Christiansted. Marley Natural was cited for non-compliance due to numerous decals on display windows and front doors. Despite pushback, committee members emphasized the importance of ensuring all businesses in historic districts comply with regulations concerning signage and physical premises.

“There is a level of compliance that needs to be administered throughout the district,” said Kurt Marsh, chair of the VI Historic Preservation Commission.

Mr. Marsh dismissed Marley Natural’s argument that neighboring businesses displayed worse forms of non-compliance. “We can’t function properly if we focus on neighbors rather than the overall regulation of the district,” he said. He urged business owners to comply with regulations to set a good example for others.

Mr. Marsh also sought assistance from St. Croix Administrator Sammuel Sanes, who was present at the meeting. He suggested that collaboration with the Administrator’s Office to encourage landlords to ensure tenant compliance would enhance the efficiency of the compliance process.

Nate’s Boathouse, represented by Chief Operating Officer Chris Mitchell, also faced signage non-compliance issues. Mr. Mitchell challenged the HPC’s authority to regulate signage in his location, citing the three differently-designated districts within Christiansted. Despite State Historic Preservation Officer Sean Krigger explaining the HPC’s legal empowerment, Mr. Mitchell insisted on a legal opinion from the 35th Legislature. He voiced concerns about the fairness of the regulations, highlighting non-compliance by a nearby library and other businesses.

Mr. Marsh remained firm on the HPC’s approach to slowly bring businesses into compliance, reminding Mr. Mitchell of the committee’s limited resources. “We are a volunteer board with no staff to handle discrepancies,” he said, noting the board’s monthly meetings to regulate the Virgin Islands Historic Preservation Commission’s rules.

Mr. Marsh acknowledged that some of the worst violators of historical district regulations are government entities. He stressed the need for a collaborative rather than adversarial approach, recognizing the widespread violations across various districts.

Despite resource challenges, the HPC aims to tailor regulations to current realities. Mr. Marsh cited a recent decision to allow phone numbers on signage as an example of adapting to modern communication needs. He urged business owners to cooperate, emphasizing the importance of preserving the architectural legacy and appeal of historic buildings.

St. Croix Administrator Samuel Sanes supported the HPC’s mission and expressed frustration at the Legislature’s failure to pass legislation that would strengthen the committee’s authority. Mr. Sanes, a former senator, criticized some property owners’ careless treatment of historic buildings but advocated for compassion towards struggling business owners.

Mr. Sanes echoed concerns about the tough conditions for businesses in Christiansted. He supported efforts to review and adjust the fee structure for historic district regulation violations but stressed the need for increased capacity and staff to handle compliance efficiently.

Senate President Novelle Francis, represented by Shawna Richards, shared concerns about removing advertising amid economic challenges. She acknowledged the statutory basis of HPC regulations and expressed willingness to support legislative review to update relevant sections of the VI Code. Ms. Richards emphasized the need for additional funding to increase the HPC’s enforcement capacity.

While rebutting claims that current regulations deter businesses, Mr. Marsh welcomed discussions on amending size regulations to better accommodate business needs. “We can talk about these things and make amendments together to ensure efficiency and satisfaction,” he said.

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