St. John Life: The Economic Crises – an Unwelcome Visitor to St. John

Looks like St. John is starting to see some fallout from the much-publicized economic crisis that’s playing havoc with people the world over.

It has just come to our attention that, for the first time in my memory, Caneel Bay will be closing down for the months of September and October as a cost cutting measure. Employees will be earning a little less and management will be seeing less perks. I also heard that there won’t be anymore Sunday Brunch. Even the rich and famous are watching their wallets

Now September and October are the slow months, so it kind of makes sense, and perhaps the hotel can use that time to take care of general maintenance without disturbing guests.

But September and October, the now feared hurricane months weren’t always that slow. Remember that from the 1920s until Hurricane Hugo in 1989, the Virgin Islands hadn’t suffered a major hurricane. Hurricanes weren’t in people’s minds. For example, Foxy’s well attended Wooden Boat Race was held on Labor Day, the height of the Atlantic Hurricane Season.

Although September and October weren’t great, they weren’t that bad either. Even after Hugo, the season wasn’t effected that much, but after Marilyn in 1995, this changed and Hurricane paranoia made September and October super slow months. Now with the stock market sliding and credit drying up, we can probably expect some super-duper slow summers.

Maybe there’s an upside to this slow down. The red hot real estate market, the building frenzy, and the invasion of the EDC gang really took a toll on the traditional St. John lifestyle. The perception of St. John as a laid back  easy going island was replaced by one of a Beverly Hills of the Caribbean, millionaire island, and not without reason.

So, if we can survive the financial blows, maybe we can slow down a little, get to the beach more often, walk through town slowly for a change, and shoot the breeze a little longer with our friends and neighbors. We’ll see how it all plays out. Hopefully, in the words of the late Bob Marley, “every little t’ing gonna be alright,”

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8 thoughts on “St. John Life: The Economic Crises – an Unwelcome Visitor to St. John”

  1. Hi Gerald – did Rosewood make a press release of this or anything or is it just something going around. That is pretty major news. There is an absolute GLUT of luxury hotel space world wide – it is going to take several years to work off this situation.
    I also think on the hurricane issue that the media and the Internet have really fostered a climate of fear that is unrealistic. We get so many questions about hurricanes that are just silly – it seems as if most people think the “Caribbean” is about the size of football field – and if they are in the “Caribbean” during a hurricane they will be right in it’s path…
    Rick – the “EDC gang” refers to the decades old program (formerly IDC) that gave tax breaks to USVI businesses that eventually got abused by state side residents and various shell companies. The US congress finally burst this bubble to a degree but prior to that it helped to fuel the real estate market in the USVI. We have a lot of older EDC stories on http://www.virginislandsmls.com/edc_news/

  2. Hi Rick,
    By the EDC gang I refer to all those multimillionaire and billionaires that came to the Virgin Islands as a result of significant tax savings offered to to companies and businesses that chose to relocate to the Virgin Islands

    In return they had to fulfill certain requirements, such as maintain a legal residency of at least 183 days in the Virgin Islands, hire at least ten people, eight of which to be Virgin Islands and contribute to Virgin Islands charities.

    The savings were gigantic, 90% reduction of income tax, no property tax, no gross receipts tax, no excise tax and a 1% customs duty. The idea was to stimulate the Virgin Islands economy by bringing industry to the islands, but often the reality was something else.

    Here’s an example from St. John. Mr. X has an investment business during the high flying anything-goes days of the Bush administration. He’s making hundreds of millions and his tax liabilities are also in the multi millions.

    He comes to St. John with an EDC “get out of jail free card.” He builds a mega-mansion on which he pays no property tax. He hires his Virgin Islanders, whose only responsibility is to come to work. Some play video games and surf the net on the companies blazing T1 line. One maintains a side internet business, while getting their paycheck from the investment company, some just talk on the phone quietly not to disturb the boss, who’s walled off in another section of the office.

    So they came in droves. They buy house, build houses, hang the cost, no problem one million, two million how about 20 million, they save that in a year and they expect to flip the house anyway.

    Meanwhile, real Virgin Islanders who pay real taxes are faced with higher real estate prices, spoiled local contractors, who know the deep pockets carpetbaggers will pay whatever and the social consequences of the increased disparity between not only the rich and poor, but between the super rich and everyone else.
    Gerald

  3. Hi Capt RD,
    What! Habiba didn’t catch that. I’m going to edit that post right now so no one will know.
    Thanks buddy,
    Gerald

  4. That’s too bad about Caneel closing in Sept and Oct. We loved going there in Septemeber and St. John during this time for that matter. It is so quite and evene more laid back. Sure, most of the popular dinner spots in town are closed but we never cared, there were always places we never tried before still open. Besides, the beaches and trails never close!

    Great blog Gerald. Keep up the good work!

    – Kevin

  5. I agree.

    I love St. John in the summer. It’s definately more laid back and more easy going. The sea tend to be calmer and It’s a wonderful time for small power boats. Also, hotel rates are down, so it’s a great time for us to visit the BVI. We’ve gone as far as Anegada in our little 15 foot Carib.

    As far as summer swimming goes, the water is warmer and I love it. I’m so spoiled that I shiver and shake when I get in the water in the winter and make a big deal about how cold it is. Of course within 30 seconds I’m fine as long as I keep moving that is. Now in the summer, I can soak as they say here on St. John or snorkel for a long time without getting cold. And speaking of snorkeling when the seas are mirror calm, as they often are in the summer, the visibility is outstanding.

    Gerald

  6. I like your take on this news, G. I agree with you: STJ is due for a slow-down. It was going to happen eventually; now the reality hits. So be it, ride the waves…

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