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Caneel Bay Resort: The Ridiculousness Continues

Caneel Bay Resort, May 2016 … The good ‘ole days!

Seriously, I cannot believe that I am still writing about the debacle that is the Caneel Bay Resort. For those of you who are new to the happenings of St. John, Caneel Bay was a stunning resort located here on St. John. It opened on the same day that the Virgin Islands National Park opened in 1956. The resort was destroyed in September 2017 when Hurricane Irma barreled through the islands, and it has been closed ever since. Why? Due to corporate greed, in my humble opinion. The resort and the land it sits on were supposed to become part of the National Park last year, but that never happened.

EHI Acquisitions – the company that operated the hotel until Hurricane Irma – filed a federal lawsuit back in June 2022 that claimed the land, buildings and improvements at Caneel Bay should be theirs. The United States government thinks that’s ridiculous, as do I. So they’ve been battling it out in court ever since.

In their latest court filings, they are currently fighting over three words – offer, convey and transfer – specifically what their true meanings are. This is how ridiculous this case has become.

There is a clause in a contract that the hotel was operating under (that’s the CliffNotes way of describing it) that said if the hotel people no longer wanted to operate during their lease period (again CliffNotes version here), they could ” include an offer” … “to convey and transfer” the property, buildings and its improvements to the United States government. If the United States said no, EHI could keep it all. EHI exercised this clause and asked for a $70 million payout. The US said no way, they believe the land, etc, could only be transferred by way of a gift, so here we are.

The United States believes the phrase “offer to convey and transfer” is plain and unambiguous. EHI disagrees.

EHI believes the words offer and acceptance are ambiguous. The United States disagrees.

EHI believes that the term “an offer” has one and only one meaning: a manifestation of willingness to enter into a bargain i.e., to enter an agreement to exchange something for something else. The United States disagrees.

The United States is adamant that EHI should have gifted the land, etc. to the United States and that should not have a monetary value attached to it. EHI disagrees.

EHI is so adamant that the property is theirs that they’re arguing over nouns versus verbs. True story. It’s getting this silly, folks.

The United States pointed out in their filing that “EHI signed documents agreeing to convey and transfer the improvements to the United States at the end of the RUE (the lease agreement I mentioned) and operated under those documents for over 15 years. It was only after EHI failed to get the RUE extended and the time was approaching for EHI to transfer the improvements to the United States that, all of a sudden, EHI claimed it owned the entire 150 acres of land and all the improvements on it.”

Boom! And there you have it! Again, in my humble opinion… lol.

The United States believes that “EHI has been enriched because it has retained possession of the Improvements located on prime real estate in St. John. EHI also has retained possession of the insurance proceeds that it received to rebuild the Caneel Bay Resort after the 2017 hurricanes.”

And EHI believes that the United States can only prevail “only by demonstrating that it means only a gift and precludes a bargain.”

What. A. Mess.

A new federal judge was brought in last month from Philadelphia. We still have no clue why our local federal judge was removed from the case. I do have hope that the new judge will rule on this sooner than later. And maybe, just maybe, I can finally write a positive story about Caneel Bay. That’s been long overdue!

I’ll keep you all posted!

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1 Comment

  1. Kathy Ellison Smith

    I started going to Cannel in 1973. My father had some transactions with the National Parks attorneys over the purchase of Denis Bay. It was difficult but a deal was made with all parties happy. This problem will just go on and on with only the lawyers getting rich. Deadlines and conditions must be met and quickly…I am getting old and want to take my grandkids to Caneel before I can no longer travel!!!!

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