Committee advances lease to turn Hamburg America Line building into Virgin Islands Museum of Art with $5M escrow requirement

The Committee on Budget, Appropriations and Finance voted on March 18, 2025 to advance bill 36-0040, approving a proposed lease of the historic Hamburg America Line building (Parcel 48B, Noorragada, King’s Quarter, Charlotte Amalie) to the Charles M. Kim VI Foundation for the establishment of the Virgin Islands Museum of Art (VIMA).

Sponsor Senator Milton E. Potter said the Kim family would invest private funds to rehabilitate the deteriorating downtown structure and estimated private investment in the reconstruction at approximately $12 million to $18 million, with proponents later describing demolition costs of roughly $3 million and construction estimates that could rise as design and permitting proceed. The lease as presented to the committee sets the initial lease term at 99 years with two additional renewal options; Assistant Commissioner Vincent Richards said the department supported the initial 99‑year term and noted that the department had negotiated terms to address escalating project costs.

Assistant Commissioner Richards described the property’s condition in detail and said the building had been wrapped in a mesh to reduce the hazard of falling concrete; the department said the wrapping cost about $50,000 and that the building shows structural spalling and corrosion in many areas. The lease submitted for committee consideration requires an initial cash deposit of $5,000,000 in escrow to secure demolition, to be released to the lessee upon completion of demolition. After demolition, Richards said, the contractor will obtain a $5,000,000 performance bond in favor of the government as security for construction performance; the lease also requires $1,000,000 in liability insurance and ties rent to a nominal annual payment ($1,200 per year noted during Q&A; clerk later clarified an annual figure of $121,200 in a ministerial correction). The proposed construction period is approximately 60 months.

Jason Charles, chief of external affairs for Alpine Group (which is affiliated with the Charles M. Kim VI Foundation), testified that the foundation would not use the facility for profit and that the building would be dedicated to cultural, educational and philanthropic purposes. He said the foundation intended to preserve and exhibit Virgin Islands art and culture and to offer public programming, studio spaces, exhibition galleries and limited retail operations (for museum-related sales) to help offset operating costs.

Committee members probed several points in questioning, including the 99‑year term and the proposed extensions (assistant commissioner and proponents said the department and proponents would present justification for a multi‑generational commitment), the $5 million escrow and bonding requirements, insurance, possible asbestos and hazardous‑materials remediation during demolition, and protective mechanisms to ensure the property remains a museum for public benefit over time. The foundation’s legal counsel, Lee Goldman, told senators the lease contains termination and default provisions (including a cancellation and termination clause and a requirement that the lessee maintain the property for the stated civic purposes); counsel also said the lease contemplates mitigation steps — including escrow and performance bonds — to protect the government if the project does not proceed.

The committee voted to approve bill 36-0040 and to forward it to the Committee on Rules and Judiciary. The clerk recorded the committee’s vote as favorable and indicated the measure will now undergo further vetting. Senators asked for follow-up: copies of the foundation’s organizational documents, proof of the proposed escrow and bonding arrangements, and the final lease text and exhibit drawings for review in Rules and Judiciary.

Ending: Committee approval advances the lease to Rules and Judiciary; proponents and department staff agreed to provide the requested documentation and to coordinate reviews with the Historic Preservation Commission and other permitting agencies.