ST. CROIX — An official involved in the rebuild of the Randall “Doc” James Racetrack recently said the $20 million project would fail without approval of a license to operate a casino to serve as the primary revenue source to sustain operations and fund up to $1.3 million in annual race purses.
A principal in the company constructing the first-class facility said the license is the last item needed to begin building a 15,000 square foot modern casino with a bar and restaurant, as well as off-track betting that is expected to take up to 15 months.
The remainder of the racetrack facility, including grandstands, receiving barns and parade ground areas, would follow the casino construction to complete the two-year build-out of the overall project. Eleven Construction LLC and Vivot Equipment Corporation have on site a trailer and dumpster.
Andrew Dubuque, Caravelle Group managing partner and VIGL Operations chief financial officer, said his company’s model to support the racetrack facility depends on revenues from the racetrack casino, or racino.
“The path to success is to make sure that the revenue model is there to sustain the racing,” he said Friday from his Christiansted office. “That’s key to success. Otherwise, it will fail.”
Caravelle Group owns the Caravelle Hotel & Casino. Its subsidiary, VIGL Operations, runs the hotel’s casino. VIGL Operations has the franchise agreement with the government to reconstruct the racetrack. VIGL has applied to the Virgin Islands Casino Control Commission for an initial casino license to operate a racino at the track.
READ MORE: CCC Evaluates Initial License Application for Racino at Randall “Doc” James Racetrack
“Our licensing hearing for our racino license was two nights ago on February 20, so we are really excited to hopefully get a good response from the Casino Control Commission and the Department of Justice,” Dubuque said.
WATCH: VIGL Racino Initial License Application Hearing
As VIGL awaits the decision by the CCC, the governor is putting pressure on the company to begin constructing horse racing structures unrelated to the racino.
Gov. Albert Bryan Jr., during a February 5 news conference at Government House, described a statement VIGL issued as “pure fantasy and fiction, and is not based in any truth.”
WATCH: Government House Weekly Press Briefing 2/5/2024
“We did not give them any subsidy for work that they performed,” Bryan said. “We negotiated a contract with them in good faith, and then they went to the Legislature and tried to get the law to guarantee them something that the contract did not.”
Bryan said he offered $5 million to VIGL to see if the company would begin construction, adding that VIGL then went to the Legislature to get the funds as a grant. He said the agreement for the $5 million was that VIGL would build a structure for horse racing, and the company would get reimbursed.
“That’s not what they want to do,” he said. “They want to build a casino for gaming and not build a structure for horse racing, and get paid up front, and that’s not the terms of the contract.”
Act No. 8651 (Bill No. 34-0340) appropriates $5 million to the Virgin Islands Department of Sports, Parks and Recreation to fund the “completion of the Randall ‘Doc’ James Racetrack project” under the direction of DSPR. VIGL Operations must comply with the government’s financial disclosure requirements in expending the funds.
Senator Javan James Sr., sponsor of the appropriation bill enacted in September 2022, said the second amended franchise agreement calls for the funds to be released 90 days after construction begins. He said, however, that VIGL has discretion when it comes to which facilities it will begin building as part of the overall project.
“They have the right to decide whether they build the casino first (the racino first), or the running surface,” he said.
James said the language is clear in the second amended franchise agreement when it comes to giving VIGL control in terms of construction.
“Now if the agreement said that the running surface had to be built before the racino, now that’s different,” he said. “They would have been in breach of contract. So VIGL is in the rights when it comes to choosing which part of the track, they want to build first, but deciding how they’re going to get the $5 million is not determined by them.”
The governor said during the Government House news conference that he has requested VIGL to give up the contract.
“Just give it up,” he said. “We won’t charge you a dime; we’re good. Just give us back our track because the odds of them getting this built is nil to none, because not only do they have to get the money to build the track, but they also have to get a way to buy out Divi.”
Dubuque said VIGL and Treasure Bay VI Corporation, owners of Divi Carina Bay Casino, whose subsidiary Traxco formerly managed the racetrack, must work out the plans of an agreement allowing TBVI to operate a temporary racino at the racetrack for up to two years. He said the $5 million settlement with the government is for partial reimbursement for the monies the company has spent to date. He said the $5 million could be used toward the overall project, including construction of the racino, noting VIGL will fund the remaining $15 million of the project.
“We have money to spend on this project and we fully intend to do it,” he said. “We’re well capitalized, we know what we’re doing, and we have the desire to do it. I think you’d be hard-pressed to find a combination like that of people that can get this project done for the people of St. Croix.”
VIGL never approached the Legislature to get laws passed in favor of the company, Dubuque said.
“I think what the Legislature tries to do is to help us move forward, and we don’t actively solicit for getting laws changed or anything like that as it relates to this anyway,” he said.
After going through a lengthy permitting process with the Virgin Islands Department of Planning and Natural Resources, Division of Coastal Zone Management, Dubuque said VIGL is ready to start building its racino as the first part of the project pending approval of its license.
“The licensure by the Casino Control Commission of our racino license allows us to start construction on the casino,” he said. “That’s important to note. We couldn’t start construction in earnest on the casino without that license. That’s really been the trigger since we signed the amendment. We need that to start.”
Even though construction of the grandstands and other structures would take another year after the racino gets built, Dubuque said VIGL plans to have interim horse racing on or about the day the racino opens.
“We fully intend to have some sort of racing because the people have waited too long, and we want to give the people what they want,” he said. “I’m motivated to have racing. I’m excited to put the purses up for the horsemen. I’m excited for people to come enjoy the parade grounds that we’re building.”
