Lawmakers hold bill to redirect DOE warehouse project after Port Authority and DOE debate revenue split and costs

CHARLESTOWN, St. Thomas — The Committee on Economic Development and Agriculture held bill 36‑0065 on June 9 after testimony from the Virgin Islands Port Authority and the Department of Education revealed unresolved questions about project cost allocation, site suitability and the formula for remitting income from commercial leasing.

The bill would amend Act No. 85‑12, which originally transferred the former Adelita Cancrine Junior High School campus to the Port Authority in exchange for the Port Authority constructing a 35,000‑square‑foot warehouse to support Department of Education (VIDE) operations (school lunch storage and related logistics). Bill 36‑0065 would instead authorize construction at a DOE‑owned property (referred to in testimony as the Island Block/Red Cross site and cited in the bill as Parcel 1B and 47B‑1 in Gasworks Gade, Crown Prince Quarter, St. Thomas). The Department of Education testified that the Island Block site can accommodate district and state administrative offices and a warehouse; DOE asked to correct the property description in the bill and to preserve the warehouse minimum of 35,000 square feet.

What VIPA said

Carlton Dow, executive director of the Virgin Islands Port Authority, told the committee VIPA has already budgeted a predevelopment contract and is spending on planning and design work for the warehouse. “On 01/23/2025, the Virgin Islands Port Authority Governing Board authorized and directed the executive director to engage our consulting engineers from Moffatt & Nichol to develop, design, and prepare permitting plans for the construction of the Department of Education Warehouse at Gas Works Gada property,” Dow said. He reported VIPA is spending approximately $400,000 so far on predevelopment and anticipates total predevelopment and demolition costs could exceed $1 million.

Dow and Preston Beyer (VIPA director of engineering) said the existing warehouse at the Gasworks‑era site is not repairable and would need demolition and replacement. Beyer summarized illustrative cost ranges discussed at the hearing: roughly $250 to $750 per square foot depending on construction type and finishes, with a 35,000‑square‑foot facility producing a wide cost range ($8.7 million to $26.2 million by the example numbers offered in testimony).

Revenue sharing and fairness questions

The bill would preserve the original Act 85‑12 expectation that income from commercial leasing of the transferred campus would provide recurring funding for the VIDE maintenance fund. But Port Authority testimony objected to language that calls for a 50% remittance of gross income to the VIDE maintenance fund without first allowing VIPA to recoup development costs and operating expenses. Dow recommended a graduated approach or an initial allocation that allows VIPA to recover predevelopment and capital costs. He offered a practical alternative: compute the education remittance from net income (gross revenue minus development and operating costs) rather than gross receipts, and consider a sliding scale that rises toward the 50% figure only after VIPA has recovered its documented investment.

The Department of Education position

Shanille Callwood, appearing for Commissioner Dion Wells Hendrickson, said DOE supports moving the warehouse to Island Block (which DOE purchased using FEMA Public Assistance funding) but seeks clarity in the bill about the square footage requirement and the revenue stream for the VIDE maintenance fund. Callwood told the committee that a reliable maintenance fund is needed to maintain existing and rebuilt school facilities, and that a consolidated administration center and warehouse on Island Block would meet DOE’s operational needs while freeing the original Adelita Cancrine property for port development.

Committee response and outcome

Senators asked for clearer fiscal terms and for an agreed method to calculate payments. Several senators emphasized the need for a written agreement that addresses (1) who pays demolition and predevelopment costs, (2) whether education remittances are calculated on gross or net income, and (3) whether a staged or sliding percentage toward 50% better balances the authority’s upfront costs with the maintenance fund’s needs.

Formal action: the committee received a motion to hold the bill for further consideration. Senator Maurice C. James moved to hold bill 36‑0065; the motion was seconded and adopted by the committee for additional work and drafting before it returns to the full committee.

Why it matters

The dispute illustrates a recurring policy tension when a territorial agency accepts a property swap tied to revenue sharing: the public‑benefit goal (dedicated school maintenance funding) must be balanced with an executing agency’s need to finance demolition, permitting and construction. VIPA said it must protect its ability to maintain leased space and recoup capital outlays; DOE said the territory needs a firm funding stream for school maintenance. Both bodies said the Island Block site is operationally preferable for VIDE’s administration and warehouse requirements.

Next steps

The committee held the bill and asked VIPA, DOE and the Bureau of School Construction and Maintenance to finalize agreed text and to provide a clear revenue‑sharing schedule (gross vs. net calculation, proposed sliding scale and documentation of predevelopment costs) before the bill returns to committee.