Frequently Asked Questions
Economic Development Commission (EDC)
Economic Development Park
The allowable uses for the spaces are wide and varied. It really depends on the type of business. We typically prefer light manufacturing or production type business at our facilities, but we also have office-type tenants as well. As an example, we currently have a diverse range of tenants from a mortgage-servicing call center firm to a company that designs and builds high-end yachts
Small businesses are in fact welcome to lease space at both industrial parks.
The cost of leasing space at the parks on St. Croix and St. Thomas is $10 per square foot per year.
There has been a precedence set for negotiations for square footage costs in the past; however, there are no guarantees.
Not all spaces for lease at both industrial parks are the same. Lease spaces are determined solely by the requirements of the tenant.
There is a minimum term of two years on leases at both the St. Thomas and St. Croix industrial parks.
We do schedule tours for business owners at both parks. We do request at least a minimum week advanced notice.
The only deadline to apply for leasing space at the St. Thomas and St. Croix industrial parks is when there is no more space available.
The best time to contact the office with questions about the industrial parks are Monday through Friday from 8a.m. - 5p.m.
The VIEDA website is optimized for Internet Explorer 8 or higher, Safari 4 or higher, Firefox 14 or higher, and Chrome 20 or higher. It is also optimized for viewing on smartphones and tablets including iPhone, iPod touch, iPad and devices with Android 2.3.
If you are looking for employment opportunities with one of our Economic Development Commission (EDC) beneficiaries, please contact the Virgin Islands Department of Labor where all job vacancies are registered.
If you are looking for employment opportunities with the Virgin Islands Economic Development Authority, see Human Resources where any available positions will be posted.
Contact the Enterprise Zone Commission at 340-773-6499 on St. Croix or 340-714-1700 on St. Croix. If you are in a historic district, you can contact the State Historic Preservation office for information on what can and cannot be done in the historic district.
Although there are many buildings that may need fixing up, we do not keep a list of which buildings are for sale. We advise checking with the stakeholders for the zone or checking with your realtor.
Enterprise Zone law does not allow a beneficiary to participate in both programs at the same time. However, you are allowed to be an Enterprise Zone beneficiary and subsequently give up the EZ benefits and become and EDC beneficiary.
Tax Increment Financing (TIF)
No, TIF cannot be used in connection with private construction costs.
In the U.S. Virgin Islands TIF projects must:
- Promote significant opportunities for local employment
- Attract new businesses within TIF areas
- Retain or expend an existing business in the TIF area
- Provide affordable housing in the TIF area
- Increase revenue to the Government through increase of real property taxes and/or gross receipt taxes
- Be beneficial to the general economic development of the TIF area as set forth in such resolution
- Be less likely to be developed without TIF; and
- Where applicable, have a feasible method that exists for the compensation of individuals, families, and small businesses that may be displaced by the project and for their relocation to favorable dwelling accommodations within their means
Yes, Island Crossings Shopping Center located in St. Croix, U.S. Virgin Islands. The developer is Caribbean Development Partners, LLC (CDP, LLC).
The anchor tenant is Home Depot which opened in September 2011 on St. Croix. It created 100 jobs during site construction and 150 new full-time jobs at opening.
- Site: 44 acre commercial property
- Located at the intersection of Route 68 and the Melvin Evans Highway on St. Croix
- Mixed-use development
- Expected to also house medical supplies, restaurants, local and national retailers, affordable housing, a renovated sugar mill
- Four-phase project
- Received $15.7 million in Virgin Islands Government Bonds
- Agreement allows for up to $30 million in government-backed bonds during the project
- Bond Term: 30 years
After the filing of the certificate with the VIEDA, the VIEDA shall prepare or cause to be prepared a tax increment development plan for the TIF area after review of the proposed provisions of the plan by the agencies or departments, as the VIEDA considers appropriate. After preparation of the tax increment development plan, the VIEDA shall submit the plan to the Governor.
TIF bonds are tax increment financing bonds, notes or other obligations issued by the PFA. The PFA may issue TIF bonds to finance development costs of eligible TIF projects. TIF bonds may not be issued in an amount exceeding the total costs of implementing the TIF plan.
Neither the full faith and credit nor the taxing power of the V.I. Government, other than property tax increment revenues, gross receipts tax increment revenues may be pledged to secure the payment of any TIF bonds issues.
TIF used to finance a variety of costs and improvements pertaining to public infrastructure, land acquisition, demolition, utilities including such things as sewer expansion and repair, water supply, street construction, affordable/low income housing, libraries, schools, traffic control, park improvements, parking structure, utility lines.
The funds allocated to and deposited into the tax increment trust fund are used to:
- Pay administrative, overhead expenses or incidentals to carry out tax increment development plan
- To pay for redevelopment planning, surveys, and financial analysis
- Reimburse VIEDA for expenses incurred prior to adoption of plan
- Purchase real property of TIF area
- Clear and prepare redevelopment and relocation of site occupant
- Pay principal, interest and any premium on TIF bonds
- Pay all expenses incidental to or connected with the issuance, sale, redemption or purchase of TIF bonds
The VIEDA establishes for each TIF area a tax increment trust fund. Funds allocated to and deposited into the fund must be made available to the VIEDA and the PFA, as security or otherwise, to finance or refinance any eligible project or TIF bond the VIEDA undertakes pursuant to the approved tax increment development plan.
Monies from TIF area are deposited into a tax increment trust fund established for a TIF area.
Deposited funds are used to finance or refinance any eligible project or TIF bond.
To be eligible for TIF, the development sponsor will apply to the VIEDA for certification that the project complies with the requirements for TIF. The application will consist of a preliminary development plan for the project which must meet certain criteria. If the VIEDA certifies the project for final approval by the Legislature following a public hearing, the VIEDA will enter into negotiations with the development sponsor. When a project is certified by the VIEDA, the VIEDA will determine the date to be set for the initial assessed valuation.
- Developer applies to the VIEDA for certification to perform TIF project.
- Application must be supported by TIF project’s preliminary development plan. Required contents of the plan listed in the Virgin Islands law Title 29 V.I.C. Section 1204(a).
- VIEDA determines whether to certify project based on criteria outlined in the VI law.
- VIEDA determines boundaries of TIF area.
- Type of property tax assessed of TIF area.
- VIEDA calls a public hearing re: the suitability of the proposed project.
- VIEDA approves TIF development plan and certifies TIF project.
- Payment of application processing fee.
The V.I. Legislature adopted TIF in 2008 to:
- Eliminate or prevent blight
- Promote development and economic growth in underdeveloped areas
- Preserve and enhance the tax base of redevelopment areas
- Eliminate shortage of affordable housing available to residents of low or moderate income
- Boost the U.S. Virgin Islands economy
- Restore and revitalize underdeveloped communities
Homeowners and property owners benefit from a successful TIF District in several ways:
- Property values are generally stabilized or improved, which can create a “spill over” benefit for adjacent neighborhoods.
- Certain public improvements – water/sewer/streets, etc. – can be paid for through sources other than general property taxes.
- Increased business activity can mean that fewer homeowner property taxes are required to provide for essential services – police, fire, public safety, etc.
The “But For” test is used to determine that an area is so blighted that little or no new development or growth would occur in the at location without utilizing TIF.
No, there are two types of TIF.
Single project on one or more pieces of land that uses TIF only for that project.
Large area of land is targeted and identified for redevelopment. Projects that develop within the district may be eligible to use TIF as a source of financing or as property values increase, increment can be used for loan programs.
- States authorize enabling legislation
- Local government jurisdictions (city or county) designate districts or project areas
- Development agencies or non-profits implement programs
- Private developers, real estate and financial institutions partner with development agencies
In the U.S. Virgin Islands, the VI Economic Development Authority (VIEDA) administers the TIF program and the Virgin Islands Public Finance Authority (PFA) issues TIF bonds.
Tax Increment Financing has proven to be an enduring and widely used economic development tool nationwide. TIFs are more frequently used now more than ever because other development tools like Industrial Revenue Bonds and Urban Development and Infrastructure Grants are no longer readily available to local governments.
Billions of dollars in federal and state aid to local governments have been eliminated. At the same time, unfunded federal and state mandates have increased the financial burden on most municipalities. Factor in state imposed property tax caps, and the funding problems facing local governments make it obvious that local governments are left to do more with less.
TIF offers local governments a way to revitalize their communities by expanding their tax base, offsetting, in part, the federal and state funds that are no longer available to them without imposing increased property taxes on the whole community.
Tax Increment Financing is utilized in 49 States and the District of Columbia. Tax Increment Financing legislation was passed by the Government of the U.S. Virgin Islands in June of 2008.
TIF originated in California in 1952 to act as a catalyst for redevelopment areas.
TIF captures increases in tax revenue without any change in tax rates. If property values increase as redevelopment occurs, the municipality will receive increased revenues and utilize those revenues to pay for public improvements without increasing tax rates.
The general tax rate in the scenario above remains the same. Only property taxes resulting from any increase in property values, above and beyond the values in the current year, would be designated for future TIF projects.
Tax Increment Financing is not an additional tax. TIF does not affect the calculation of the tax amount. It affects the distribution of the tax. The tax due is calculated the same as a property that is not located in a TIF district however a portion of the money that would normally go to the County, City, School, and special taxing districts is instead sent to the TIF district.
A tax increment is the difference between the amount of property tax revenue generated before TIF district designation and the amount of property tax revenue generated after TIF designation. Establishment of a TIF does not reduce property tax revenues available to the overlapping taxing bodies. Property taxes collected on properties included in the TIF at the time of its designation continue to be distributed to the school districts, territory, university and all other taxing districts in the same manner as if the TIF did not exist. Only property taxes generated by the incremental increase in the value of these properties after that time are available for use by the TIF.
Tax Increment Financing or TIF, is a unique financing tool that promotes the development and economic growth in undeveloped areas. It is also an effective method of enhancement in areas where such tax base is declining or stagnant; that redevelopment in such areas when complete will enhance the tax base and provide increased tax revenue when complete for the government.
Yes. Once the Project Development Plan has been approved and certified and a Project Agreement has been negotiated, the Project beneficiary shall also be required to pay the following:
- The Project beneficiary shall pay an annual sum of $500,000 to the Government of the U.S. Virgin Islands to be deposited into the Tourism Revolving Fund to be used exclusively by the Department of Tourism for marketing. Payments shall be made by January 31st of each year.
- $20,000 shall be reserved for the Board of Education exclusively for scholarships to students whose college major is Hotel Management which shall be split equally between the Districts of St. Croix and St. Thomas/St. John
- The Project beneficiary will also be required to contribute the sum of $2500 annually for the creation, development, management and maintenance of a database designed to recruit Virgin Islanders living abroad. This database shall be developed and managed by the Department of Labor in collaboration with the VIEDA. Payments shall be made by January 31st of each year.
The Project Agreement is the agreement entered into between the Government of the U.S. Virgin Islands and the developer once the VIEDA has certified the Project Development Plan.
The VIEDA’s approval of the Project and the Governor’s approval of a Project Agreement (and the Legislature’s ratification thereof) does not constitute the approval of any portion of the Project for any other purposes including, without limitation, environmental and building permits.
The Project Agreement shall require that all of the developer’s equity in the Project be in the form of cash or verified land value. Development fees and the value of services shall not be considered valid equity.
The Project Agreement shall also require the Developer commence substantial construction of the Project not more than one hundred eighty (180) days following the Project’s approval by the VIEDA for participation in the program.
The Project Agreement shall also require that the completion of the Project occur no later than two (2) years following the Project’s approval by the VIEDA.
If upon consideration of the application the VIEDA decides the Project does not comply with the requirements, the VIEDA shall notify the developer in writing stating the areas the Project fails to the meet the criteria, which shall be made available for public review.
The VIEDA shall allow the development sponsor up to sixty (60) days to cure any defects. If the development sponsor fails to cure the defects within the sixty (60) day period, the VIEDA shall deny the certification of project, and any re-submittal of the Project shall require a new application.
Once the Project Development Plan has been approved and certified the VIEDA shall enter into good faith negotiations with the developer for a Project Agreement between the Government of the U.S. Virgin Islands and the developers setting forth the obligations of the parties as outlined in the VI law.
In determining certification of the Project, the VIEDA shall consider the materials and opinions provided with the application and the testimony of the public, together with the following criteria:
- Whether the Project is financially feasible;
- Whether the Project would likely result in the projected increase of tax revenues payable to the Government with regard to hotel room occupancy tax and casino tax to be applied to payment of the Project financing;
- Whether an allocation, dedication or contribution of hotel room and casino tax revenues will be sufficient to support payment of the Project financing;
- Whether the proposed development would not happen solely through private investment in the reasonably foreseeable future;
- Whether the Project’s total anticipated benefit to the Government of the Virgin Islands, including public benefits as well as financial benefits exceed the total anticipated costs to the Government;
- Whether the Project will have an adverse effect on the market; and
- Such other criteria as the VIEDA may establish.
- Developer applies to the VIEDA through the Economic Development Commission for certification to the perform the Project
- Application must be supported by a Project Development Plan
- A $50,000 deposit shall be paid with the application which will be credited against the costs of processing the application, conducting independent assessments of the Project and other administrative costs
- Applications must be submitted prior to January 1, 2014
- VIEDA determines whether to certify Project based on criteria outlined in the VI law
- VIEDA calls a public hearing re: the suitability of the proposed project (the VIEDA shall hold no less than two (2) public hearings on the application prior to rendering any decision on the certification of the Project
- VIEDA approves the Project Development Plan and certifies the Hotel Development Project for approval by the Governor and the Legislature
To be eligible for benefits under this program, the project must:
- Be located on the island of St. Croix, the island of St. Thomas or the island of St. John
- 80% of all persons employed shall be residents of the U.S. Virgin Islands, provided that after the third year of operation, at least 20% of management, supervisory and/or technical positions must be filled by residents of the U.S. Virgin Islands, unless granted a waiver by the Commission
- Obtain all of the applicable licenses or permits, permanent, temporary or otherwise as required by Title 27 of the V.I.C. and shall maintain during the term of the contract such licenses or permits
- Comply with all applicable laws, rules, ordinances and regulations
- Such other requirements as the VIEDA may require in conformity with the Hotel Development and Finance Program
‘Project’ means a proposed project, which involves one or more of the following: the planning, acquisition, construction, improvement, maintenance, or operation of new hotels and/or related facilities in the Territory.
The VIEDA shall establish for each approved project a separate Trust Fund. Funds allocated and deposited into the hotel development and finance trust fund are from the hotel and casino taxes generated from the approved project and is made available to the VIEDA as revenue to utilized towards reducing the Hotel Development Notes incurred for the development of the approved Project. Existing hotel room taxes and casino taxes may not be used to fund the Hotel Development Trust Fund.
The hotel occupancy taxes and the casino revenue tax generated from the approved Project must be deposited into the established Trust Fund.
Monies generated from the Hotel Development and Finance Program are deposited into a hotel development and finance trust fund.
The Hotel Development and Financial Assistance Program is established within the Virgin Islands Economic Development Authority (VIEDA) and the program is administered through the Virgin Islands Economic Development Commission, which is a subsidiary entity wholly administered and operated by the Virgin Islands Economic Development Authority.
Hotel Development Notes means the debt incurred by the Developer for the approved Project, including but not limited to Hotel Revenue Bonds, Conventional Loans, Institutional Financing or other financing issued to the eligible Project.
The Hotel Development and Finance Program allows for the use of future gains in hotel room occupancy taxes and casino taxes to assist in the development of areas, which would not happen solely through private investment in the reasonably foreseeable future.
As an option to the developer and until the developer’s debt is paid, the maximum casino tax rate may be increased to 35%. However, once the debt is retired, the casino tax shall return to 12%.
While Hotel Development Notes remain outstanding, the tax rates may not be reduced, if the reduction would impair the ability of the developer to pay any costs to which the tax revenues have been pledged or otherwise committed by the VIEDA, including the timely payments of debt service on the Hotel Development Notes.
The V.I. Legislature adopted the Hotel Development and Finance Program in 2011.
The purpose of the Program is to encourage and promote investment in and development of hotel and related facilities in the U.S. Virgin Islands and to provide incentives for the development and construction of hotels and resorts, including commercial facilities, and other hotel facilities for the accommodation and entertainment of tourists and visitors.