Committee holds bill to redirect DOE warehouse construction; VIPA and Education negotiate revenue split

The Committee on Economic Development and Agriculture on June 9 held bill 36‑0065 after testimony from the Virgin Islands Port Authority (VIPA), the Department of Education (VIDE) and the Bureau of School Construction and Maintenance about an amendment to Act 85‑12.

The bill would change the site identified in Act 85‑12 for a 35,000‑square‑foot Department of Education warehouse and preserve the original act’s intent that proceeds from commercial use of the former Adela Cancering campus help support school maintenance. Committee members voted to hold the measure to permit VIPA and VIDE to resolve differences over construction obligations and how lease income is shared.

What agencies said

Carlton Dow, VIPA executive director, told the committee that VIPA supports building the DOE warehouse but—after a site inspection and engineering review—concluded the existing Gasworks Gade warehouses are not suitable for retrofit and that new construction would be required. Dow said VIPA has already authorized predevelopment work and expects design and permitting costs; the board approved roughly $400,000 for predevelopment work and VIPA estimates it could spend in excess of $1 million preparing both sites and obtaining permits.

“VIPA remains committed to constructing the warehouse,” Dow said, “but the bill as drafted would place the full predevelopment and construction financial burden on VIPA while remitting 50% of commercial gross income to DOE. That split is not equitable given VIPA’s upfront costs.” Dow asked the committee to amend the bill so VIPA may recover predevelopment costs and then remit a share of net income to the VIDE maintenance fund on a graduated basis. He proposed that a staged split (for example an initial allocation materially lower than 50%, rising over time) or a net‑income basis would be fairer than an immediate 50% gross‑income obligation.

VIDE testimony

Shanille Callwood, representing the commissioner of education, said VIDE supports moving the warehouse to the Island Block property acquired with FEMA funds because the site will consolidate district and state offices and reach the department’s needs more efficiently. Callwood asked the committee to correct an address in the bill and to replace retrofit language with “new construction,” and she urged committee members not to delete the statutory remittance that creates a recurring funding stream for school maintenance. VIDE staff confirmed the proposed Island Block location can meet program needs but asked the committee to preserve whatever statutory mechanism ensures funding flows to the VIDE maintenance fund.

Committee action and next steps

During debate Senator Maurice C. James moved, and the committee seconded, to hold the bill for further consideration. The chair announced the measure was properly held "until further notice," and members requested VIPA and VIDE finalize the financial sharing language and any technical edits (property description, replacement of retrofit with new construction, and whether remittance should be based on gross or net income). Senators asked for a short, written agreement or amendment before the bill returns to committee so members can review projected costs, estimated revenue flows, and the proposed phased sharing formula.

Quote

“VIPA is prepared to work with other agencies to get this warehouse constructed for the Department of Education,” Carlton Dow told the committee, “all we ask is a fair and reasonable return for VIPA.”

Why this matters

The House‑passed Act 85‑12 originally transferred the Adela Cancering campus to VIPA in exchange for construction of a DOE warehouse and a commitment that revenue from commercial activity on the transferred property support education maintenance. The committee’s hold reflects lawmakers’ effort to ensure the port authority can finance required construction without jeopardizing the maintenance funding stream that supports school facilities territorywide.

Action taken

The committee voted to hold (tabled) bill 36‑0065 for further negotiation and re‑submission with technical edits and a clarified revenue‑sharing approach. Senator Maurice C. James made the motion to hold; the motion was seconded and the committee chair announced the measure properly held.

Ending

Committee members asked VIPA and VIDE to return with a written amendment that: (1) corrects the property description; (2) changes retrofit language to new construction where appropriate; and (3) sets a clear, auditable revenue‑sharing formula that allows VIPA to recover predevelopment costs and guarantees a recurring VIDE maintenance revenue stream. The committee said it will consider the amendment once submitted and encouraged both agencies to reach agreement rapidly so construction and permitting can proceed.