Business View Caribbean, July/August 2018

16 17 assets to generate a much higher degree of revenue for GERS and the government. In addition to the $25 million cash injection, the mortgage payments, 50 percent of the mall revenues and half of the annual pay- ments from the refinery,will be dedicated to GERS.“All together, based on (estimates from) our industry consultants, these measures will generate more than $380 million into GERS over the next ten years,”Mapp said. He also remarked that actuaries cautioned that these payments and infusion of cashwill not save the system,but theywill extend its life by an additional five years,“giving all of us,the plan’s sponsor,the plan and the plan’smembers,some breathing space to rationallyfind a permanent solution to restore GERS to solvency.” “Please note that I have previously submit- ted a bill to the Senate to increase the gov- ernment’s contribution to GERS over the next three years, as well as increase the contribu- tion of its members whose salaries are higher than $65,000 per year,”Mapp added.“So, these two measures combined provide more than five years of additional solvency of the retire- ment system.” The Governor’s submission to the Legislature also provides that, out of the closing payment, up to $10 million will also be used as an equity investment in the new 110-room hotel located at Yacht Haven Grande on St.Thomas. This hotel will be the first new hotel built in the territory in decades. In return for its investment, the government will receive a security interest in the hotel and land underneath it, interest payments for ten years, five percent of the hotel’s cash flow, and a seven percent carrying interest in the net OPENING LINES proceeds if the hotel is ever sold.Fiftypercent of the cash flowgenerated by the hotel that is paid to the government will also be dedicated to GERS’solvency. Funds from the closing payment will also be divided up and used to pay $10 million of income tax refunds; $3 million for the operation of the judicial branch for the upcoming fiscal year; $2 million for the relocation and development of a legislative complex on St. Croix; $7million to the Waste Management Authority to pay outstanding obligations to vendors; $3 million to the St. Croix Capital Improvement Fund, and $4 million for the Paul E. Joseph Stadium.A sum of $2 million will flow to the St. John Capital Improvement Fund and $1 million will be allocated for the recon- struction of the St. John Battery,which was de- stroyed by Hurricane Irma. Mapp said: “This landmark agreement did not happen overnight. It is the result of much hard work by the owners of ArcLight Capital and my administration over the past two years. It is the product of complex negotiations with major players in the global oil industry. It required tre- mendous work with the Trump administration and the President’s Council of Environmental Quality, the EPA (United States Environmental Protection Agency) and the U.S. Department of Justice.More work remains to be done, but this agreement allows the Virgin Islands to accelerate its recovery, grow its economy, create jobs for its people, pro-