Investment group

Fortress Investment Group plans to take Frenchman’s Reef to the next level

Frenchman’s Reef, St. Thomas, shown in Fortress Investment Group presentation. (Screenshot of the Zoom meeting)

Officials from CREF3 USVI Hotel Owner, Inc., a company owned and managed by Fortress Investment Group, on Tuesday presented plans for Frenchman’s Reef Marriott Resort, which the company is scheduled to reopen in November 2022, after being devastated by the storms of 2017.

The presentation was made at Tuesday’s meeting of the Board of Directors of the VI Economic Development Authority.

The Marriott Frenchman’s Reef Resort and Spa restoration project in St. Thomas was originally owned and operated by DiamondRock Hospitality Company, then shut down in 2019.

“Under a new owner, construction has finally started and is actively continuing,” said lawyer Adriane Dudley, who represents CREF3.

Originally under DiamondRock Hospitality Company the station was due to open in 2020 but then was sold to New York-based private investment firm, Fortress Investment Group earlier this year.

At Tuesday’s meeting Joe Gould, managing director of Fortress Investment Group, detailed plans for the property. He said Fortress had invested more than an additional $ 50 million.

The total investment in the complex is expected to amount to more than $ 402.6 million. Gould said the resort will support $ 1.5 billion in commercial sales, $ 559 million in revenue and $ 182 million in U.S. Virgin Islands tax revenue over the next 10 years.

“Our goal in purchasing Frenchman’s Reef is to build on its rich history,” said Gould. “We have carefully layered design, branding and design to deliver a unique experience while working together to create a global destination and an encompassing global ecosystem.”

Some of the renovations will include 486 rooms, 10 restaurants and bars, 4 swimming pools, 60,000 square foot indoor and outdoor reception space, a kids’ club and activity center, 13 luxury spa treatment rooms and a beach of 1,400 foot white sand.

Areas of expansion included beyond what was originally planned, improved in-room experiences, 8 additional bedrooms in the main building, pool deck upgrades, completely redesigned and expanded spa and spa facilities in form, upgrade of infrastructure, addition of a more efficient wastewater treatment plant, and plans to have and erosion plan in accordance with CZM permits.

“We are confident that the reopening will reinvigorate the US Virgin Islands’ tourism economy and re-establish St. Thomas as a premier tourism destination.”

A few dining options that guests and locals can expect are a coffee bar, sushi bar, and restaurant where locals can again enjoy Sunday brunch.

“We have already booked over 10,000 committed group rooms for 2023-2024,” Gould said.

Gould said the opening of Marriott Frenchman’s Reef will create around 900 jobs.

“Former employees are more than welcome to apply and return to their positions at Frenchman,” he regretted, noting that the normal application process, with a drug test and proof of vaccination, will be required.

“The hiring of employees will begin in September 2022, followed by intense training in preparation for the reopening. The reopening is scheduled for November 2022.

The resort will also offer health insurance, life insurance, paid vacations, discounts for local groups, as well as charity events and donations.

Fortress Investment Group was founded in 1998 and is a leading and diversified global investment manager with over $ 53 billion in assets under management and 18,000 institutional clients and private investors worldwide.

CREF3 officials have asked the VI Economic Development Authority board to transfer EDA benefits from DiamondRock Hospitality to Fortress.

Attorney Adriane Dudley, who represents CREF3, said that under the Hotel Development Act of 2019, the company wants to get 50% of the designated hotel occupancy tax, an economic recovery fee of 2½ % and the authorization to issue hotel development notes.

“In 2017, Hurricanes Irma and Maria devastated Frenchman’s Reef Marriott Resort and Spa property,” said Dudley. “It should be emphasized that without these benefits this project could not go to the extent planned and we certainly could not open in the 2022 season.”

During the questioning portion of the hearing, Member Haldane Davies asked, “What’s different about Fortress at Diamond Rock”?

Gould replied, “We have the team, the expertise to execute the project. We have secured the necessary funding subject to EDA approval. We have the experience most directly related to the redevelopment of the Westin in Grand Cayman, very similar in that it is an island, requiring significant investment, over $ 50 million invested in assets for the to bring back. We monitored this project and we were on budget and on time.

Other companies that applied for EDA benefits on Tuesday included Centripetal VI, LLP, Systilogic, LLC and WVJD, LLC.

President Kevin Rodriguez, Haldane Davies, Jose A. Penn, Terrance Positive Nelson and Phil Payne were present at the hearing.

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