Virgin Islands Real Estate Trends

As reported in the Virgin Islands Daily hews: ST. THOMAS - To lure visitors to the territory this season, the V.I. Tourism Department has begun a six-week run of new television commercials on CNN and CNN Headline News - reaching a large national audience.

As part of Tourism's advertising package, more than 300, 30-second television spots will air. The ads will feature the "You, Unscripted" theme developed this past year and unveiled in June.

The "You, Unscripted" slogan embodies the territory's new brand, which focuses on the visitor's desire to create their own, unique vacation experience, Tourism Commissioner Beverly Nicholson-Doty said at the launch in June.

The ads show people who have "lost" their everyday identities and "found" a new one through their Virgin Islands vacation.

The new ads were shot on all three islands in February using local actors recruited through open casting calls. The soundtrack for the radio and television ads was recorded by the Rising Stars Steel Orchestra.Â

The ads are airing during some of the most top-rated primetime shows including CNN's "American Morning," "Larry King Live" and "Saturday Morning" as well as CNN Headline News' "Showbiz Tonight," "Weekend News" and "Nancy Grace."

The new television ads include messaging urging potential visitors to book their trips to the territory through American Airlines Vacations, Delta Vacations and US Airways Vacations.

It is the second wave of television advertising, the national print and television ads ran in a limited six-week release in June.

"We recognize that the winter travel planning process has begun," Nicholson-Doty said in a prepared statement. "Our second wave of national TV ads are designed to keep the destination top of mind among potential visitors."

Tourism plans to spend $6 million on this year's ad campaign, which will consist of 30-second television spots, magazine, newspaper and Internet advertising. The ads will target a range of market segments including bridal and romance, culture and heritage, sailing and yachting, meetings and incentives, divers and African-American travelers.

Any comments?

Want to be a mermaid? Captain of your own ship?

That's what our tourism campaign is promoting. Hopefully it's working - with so little funds to pay everyday bills - will this improve our tourist economy?

As reported in the Virgin Islands Daily News:

The Virgin Islands is rolling out a summertime promotion to entice families living throughout the Caribbean to spend their summer here.

The Family Fun promotion, which started in May and runs through October, offers airfare rebates, hotel deals - especially for families with children younger than 12 - and attraction and activity coupons.

"The summer months are typically a slower time for the Virgin Islands," said Tourism Department spokeswoman Allegra Kean Moorehead. "It is nice to be able to have various promotions available in the marketplace to keep the islands busy."

The package includes a $50 per person airfare rebate, $50 in attractions and activity coupons, and a third night free at several hotels - where children under 12 also stay for free. Trips must include at least a three-night stay, and trips must be booked by Sept. 30. Travel needs to be completed by Oct. 30. Tourism has done similar Caribbean-targeted promotions in the past.

This promotion, Moorehead said, is gathering a lot of attention because of the airfare rebate.

"It's really attractive," she said. "Right off the bat, they're getting money off of their package. And as soon as they check into their hotel, they're getting $50 back."

The Tourism Department has focused much of its efforts in Puerto Rico. Moorehead said that a rate card featuring the package has been printed for the Tourism Department's representative in Puerto Rico and is being distributed to travel agents. Advertising for the package also has been featured in publications in Puerto Rico.

Word about the promotion is also being spread to other Caribbean islands. Information has been distributed at every Caribbean trade show that Virgin Islands representatives have attended, Moorehead said. Additionally, Caribbean-based travel agents who have gone through the online "Virgin Islands Specialist" program have been provided with information. The "Virgin Islands Specialist" program is an initiative that allows travel agents worldwide to gain a thorough knowledge and understanding of the territory's tourism opportunities, Moorehead said.

St. Croix hotels participating in the promotion include Club St. Croix, Company House Hotel, Divi Carina Bay Resort, Hotel Caravelle, King Christian Hotel, Sand Castle on the Beach, The Buccaneer and The Palms at Pelican Cove. On St. Thomas, visitors staying at Best Western Emerald Beach, Bolongo Bay Beach Club, Point Pleasant Resort, Sapphire Beach Resort & Marina, Secret Harbour Beach Resort, Windward Passage Hotel and Wyndham Sugar Bay Resort & Spa can benefit from the promotion. St. John accommodations participating in the promotion include Concordia Eco-Tents, Maho Bay Camps and Westin St. John Resort & Villas.

I think even Herman Wouk would be astouned by this "much ado about property taxes" issue.

As reported by the Virgin Islands Daily News:

"The government has officially rescinded the 2006 tax bills that were sent to property owners territorywide according to an executive order signed by Gov. John deJongh Jr. on June 30.

The action is part of the ongoing litigation that has kept the government from collecting property taxes for the last three years.

The case has slowly crawled along since September 2008 while the government fought a contempt ruling from District Court Judge Gomez at the 3rd U.S. Circuit Court of Appeals. In mid-June, the 3rd Circuit affirmed Gomez's contempt order, effectively invalidating all the 2006 property tax bills sent out.

The executive order renders the 2006 tax bills null and void, Sara Lezama, spokeswoman for the V.I. Justice Department, said Monday.

The next step in the case will be a hearing before Gomez on Sept. 17, when the government will support its position that the Board of Tax Review, which started up last year, is now functioning as mandated by the court. The board, which hears and rules on property taxation disputes, was inactive for years.

In a year's time, Lezama said, the board has reduced the number of pending appeals from 274 to 41.

"The board is functioning," she said.

The government's troubles with property taxes has been going on for more than a decade.

The territory has been embroiled in litigation with the goal of establishing a fair and equitable property tax system. A group of commercial property owners started the legal battle when they sued the government in District Court, arguing that the government's system of property taxes was unfair and unconstitutional.

The court agreed with the property owners and in 2003 issued an injunction freezing property values at those determined in 1998 - the last year the court deemed the values were fair.

Before the territory can collect property taxes using new values, a judge must determine that the territorial government has met several conditions to improve the taxation system - such as conducting a comprehensive revaluation of all of the territory's properties and resurrecting the Board of Tax Review. A court-appointed special master was put in place to oversee the property revaluation.

Since 2003, the government has been working to accomplish these goals.

Last summer, a series of hearings was held in District Court about whether the V.I. government had met its obligations for the court processes to be over and so property tax bills could be sent out using new values. In August - before Gomez had ruled on any of the matters pending before him - the V.I. government went ahead and sent out property tax bills.

In September, Gomez invalidated the bills and held the V.I. government in contempt of court. The V.I. government appealed Gomez's contempt ruling to the 3rd Circuit. Because the appellate court had postponed the enforcement of the contempt ruling, government officials believed they had permission to send out another round of new bills. The latest round of 2006 property tax bills were sent out in May. "

Just how much can our already strapped resources be squandered in postage? What do you think about this ongoing insanity?

As reported in the USVI Daily News:

"First-time home buyers in the Virgin Islands are eligible for a tax credit of up to $8,000 that is being given to other new homeowners in the mainland United States under the American Recovery and Reinvestment Act.

Delegate to Congress Donna Christensen said in a press release that there had been concern about the tax credit's availability in the territory because language in the stimulus bill states that people who are residents of the 50 states and Washington, D.C., are eligible for it.

Internal Revenue Bureau Director Claudette Watson-Anderson said the territory's residents are eligible for the tax credit because the territorial tax code is exactly the same as the federal tax code.

The tax credit is not expected to affect the territory's revenues. Watson-Anderson said the credit should be covered by funds from the federal government to reimburse the Virgin Islands for several tax reductions.

"It should be coming out of the $50 million that the federal government is going to give us to pay out credits," Watson-Anderson said.

The credit is available to qualified people buying their first primary residence this year, and will be applied to 2009 income taxes. For information, contact the IRB at 773-1040 on St. Croix, 715-1040 on St. Thomas, and 777-1446 on St. John."

Is this advertising exciting enough to bring visitors to our lovely paradise?

Excerpt from the US Virgin Islands aily News:

ST. THOMAS - The V.I. Tourism Department showed off the territory's new brand, slogan and advertising campaign Tuesday at the USVI Hotel and Tourism Association's 16th annual Destination Symposium.

The new ads feature the slogan, "You, Unscripted." The slogan embodies the new brand, which focuses on the visitor's desire to create their own, unique vacation experience, Tourism Commissioner Beverly Nicholson-Doty said.

The ads show people who have "lost" their everyday identities and "found" a new one through their Virgin Islands vacation. For example, one print ad shows a woman swimming in turquoise waters. It says, "lost: multi-tasker, found: mermaid." A mermaid tail has been drawn on top of the photograph to illustrate the fantasy of the vacation experience.

Sebastian Benjamin is the USVI account director at JWT, the Atlanta-based advertising agency contracted by Tourism to develop the territory's new brand and create the new ads. The agency holds a $10 million contract with the department, $1.2 million of which was used to develop the new branding for the territory. The funding for the contract comes from the Tourism Advertising Revolving Fund.

Benjamin said the idea is to appeal to travelers who want a diversity of experiences.

"It invites you to lose the label of who you are when you're back home," Benjamin said about the new campaign.

The tourism industry professionals at Tuesday's meeting were impressed with the new campaign.

"It's really fantastic what they've done," said Sharlene Brenkus, Wyndham Sugar Bay director of sales and marketing.

Her colleague Arianne Valentino, global sales director for the Wyndham Hotel Group, agreed.

"You take our everyday lives and you allow us to escape," she said. "I'm blown away."

Since the 9-11 terrorist attacks, the department has pushed the fact that the islands are under the U.S. flag with the slogan "America's Caribbean." Nicholson-Doty said the idea behind that branding strategy was to make Americans feel safe and comfortable with travel to the territory.

The fears following 9-11 have faded and to compete against other Caribbean destinations, Tourism has expanded its reach to new, international markets that do not respond to the "America's Caribbean" theme.

To develop the new platform, Tourism's marketing team talked to a wide range of people in the territory's key markets. Through interviews and focus groups, the department was able to get a better feel for what today's traveler is looking for in a Caribbean destination - an authentic experience of a destination and a trip that goes "off the beaten path."

The $6 million campaign will consist of 30-second television spots, magazine, newspaper and Internet advertising. The ads will target a range of market segments including bridal and romance, culture and heritage, sailing and yachting, meetings and incentives, divers and African-American travelers.

The national print and television ads started running Monday. Nicholson-Doty said they will do a short, six-week run now, then hold off until the fall when marketing will ramp up in preparation for the coming tourist season.

The new ads were shot on all three islands in February using local actors recruited through open casting calls. The soundtrack for the radio and television ads was recorded by the Rising Stars Steel Orchestra. 

Tourism officials said JWT worked with local vendors including caterers, casting, scouting, make-up artists, wardrobe and production services - contributing about $1 million to local economy, according to Tourism.

Samples of the print ads and a 30-second television spot can be viewed at www.usvimarketing.com.

The new brand and advertising campaign is the final piece of the department's overhaul. In December, the new logo - a multicolored moko jumbie juggling three stars - was unveiled. Benjamin said that while many Caribbean islands have moko jumbies as part of their culture, no one has used the image as a logo before.

In January, the new $250,000 website - www.visitusvi.com - was launched. Benjamin said it is receiving about 63,600 visitors a month and each person is spending about five minutes looking at the site. Visitors to the website can plan their trip, link to local businesses and view maps of the islands.

Soon, additional features will be added to the site including a full translation into Spanish, a travel agent education section and the ability for businesses to respond to requests for proposals sought by the department.

Fans of Herman Wouk chuckle at the latest uproar on the property tax issue!

As reported in the Virgin Islands Daily News:

"The U.S. 3rd Circuit Court of Appeals ruled in an opinion published Tuesday that the V.I. government is prohibited from sending out property tax bills - causing thousands of property tax bills sent out last month to be immediately rescinded and making the territory's already strained budget situation more tenuous.

In the opinion written by Chief Judge Anthony Scirica and agreed to by judges Thomas Ambro and D. Brooks Smith, the high court upheld the September 2008 order from Chief V.I. District Court Judge Curtis Gomez that said the government has no authority to send out property tax bills right now and the government is in contempt of court.

"We find no clear error in the District Court's underlying findings of fact, and we agree with the District Court's application of fact to law," the opinion states.

The opinion invalidates all of the 2006 property tax bills sent out last month. In a statement sent out by Government House on Tuesday night, Government House spokesman Jean Greaux Jr. said that tax bills that have been sent out will all be rescinded, and the executive order setting July 1 as the due date for the tax bills will be vacated.

According to the statement, the lack of taxes will represent about a $28 million loss in revenues.

Several months ago, Gov. John deJongh Jr.'s financial team had pegged the territory's projected financial shortfall at $188 million for the current fiscal year. It is not clear where property tax revenues fit into those projections.

Government officials who were hoping to use their interpretation of the laws and previous court rulings to justify sending out property tax bills had little to say about the 3rd Circuit's opinion on Tuesday. Government House did not wish to comment beyond a short statement released Tuesday evening, and Greaux did not return telephone calls seeking more information.

Attorney General Vincent Frazer declined to comment on Tuesday. Justice Department spokeswoman Sara Lezama said that Frazer and other top-level officials needed Tuesday to fully understand the ruling and decide what comes next.

Tax Assessor Bernadette Williams could not be reached for comment.

This is the newest twist in the territory's long and convoluted journey to arrive at a fair and equitable property tax system. Litigation about the fairness of the territory's property tax valuations and assessments has stretched back almost a decade, after a group of commercial property tax owners sued the government in District Court because they believed the system of assessing property taxes was unfair and unconstitutional.

Three years of property taxes have gone uncollected because of the legal quagmire.

Last August, the government sent out tax bills for 2006 using newly assessed property valuations and a new formula for calculating the taxes based on use of the property. Because the court had not yet given the government permission to send out the property taxes, Gomez held the government in contempt of court.

Gomez ordered all new tax bills to be rescinded and imposed a $5,000 daily fine against the government until it complies with the order directing the government to pay plaintiffs' attorneys' fees and other costs and ordering the creation of a new government account - the Property Tax Contempt Expense Fund - to satisfy payments the government must make.

The V.I. government immediately appealed the contempt ruling to the 3rd U.S. Circuit Court of Appeals. The government also requested that the hearing be expedited and that the high court postpone enforcement of the contempt order. In October, the 3rd Circuit granted the government's motion.

At that time, government officials saw the stay as a green light to reissue tax bills. Government officials reasoned that since the contempt ruling invalidated the new tax bills, it followed that a stay of that order allowed the government to issue valid tax bills.

In January, the government and attorneys for the property owners who initially brought the property tax litigation in 2000 argued the legitimacy of Gomez's contempt ruling before the 3rd Circuit in Philadelphia.

While waiting for the ruling from the 3rd Circuit, the V.I. government last month again sent out 2006 property tax bills and the governor issued an executive order mandating that they be paid by July 1.

At the time, Frazer said that the government's fiscal situation was "quite dire," and that the government must be able to get the money it needs to operate.

No information was available on Tuesday about how many people had paid those bills to date.

In the 20-page opinion, the 3rd Circuit judges reaffirmed several decisions they had made during the lifespan of the litigation. The appellate court agreed with Gomez's ruling. The court order prohibiting new tax bills is still valid, the 3rd Circuit's opinion states, and Gomez correctly ruled that there are still benchmarks the territory must reach to have a fair and equitable tax system.

"We see no abuse of discretion," the opinion states.

James Derr, the lead attorney for the property owners who brought the initial lawsuit, said that the opinion was what the plaintiffs expected. No new legal ground was broken in the opinion, and the 3rd Circuit basically reiterated legal points it had made before.

"Unfortunately, the government put itself in something of a quandary," Derr said. "The government needs money, and the government sent out tax bills. People paid their taxes, and now the government has to recall them. It will be a real problem for the government."

Derr said he hopes all of the attorneys involved in the case can come together before Gomez soon for a status conference to reaffirm where things stand and what should be done next. "

Stay tuned for more island insanity...

For those of you who are looking to buy in the U.S. Virgin Islands and may qualify as a "first time home buyer",  please be advised that the tax credit that is being offered nationwide is currently NOT applicable to the Virgin Islands.

Our VITAR leadership is working with Delegate Christensen and top NAR personnel to address this situation.

We will post when this situation is resolved. Hopefully this does not deter you from exploring real estate opportunities available in our beautiful U.S. Virgin Islands.

Our motto remains - "We love paradise and it shows!"