EHI Acquisitions Rejects Call to Dismiss Its Suit Over Caneel Bay Ownership

In a court filing Tuesday, EHI Acquisitions asked a federal judge to reject the government’s motion to dismiss its lawsuit seeking to be declared the owner of the 150-acre Caneel Bay Resort property on St. John.

The lawsuit — filed June 30 in V.I. District Court by EHI, a subsidiary of CBI Acquisitions — asks the court to declare that the Interior Department has no legal claim to the property after it rejected CBI and EHI’s offer to transfer title to the resort’s buildings and other improvements to the U.S. government for $70 million in 2019.

The U.S. Attorney’s Office subsequently filed a motion in September asking the court to dismiss the suit because it does not include CBI, “a necessary and indispensable party” with a legal interest in the property.

In a 17-page response on Tuesday EHI’s attorney, Chad Messier of Dudley Newman Feurzeig, said CBI is not a necessary party but if the court finds that it is, it could order that CBI join the suit, rather than dismiss the case.

The lawsuit is the latest in a legal battle over the future of the once-tony resort that has been shuttered since it was badly damaged in the twin Category 5 hurricanes of September 2017.

Laurance S. Rockefeller in 1956 donated the land that today makes up Virgin Islands National Park but held back roughly 150 acres for Caneel Bay Resort. In 1983, Jackson Hole Preserve, a Rockefeller entity, donated the land to the park. However, it came with a Retained Use Estate agreement that gave the Preserve free use of the property and its facilities for 40 years. At the end of that four-decade period, September 2023, the RUE document dictated that the buildings and their improvements be donated to the Park Service.

While the Preserve initially held the RUE, it was passed down to other companies, and finally to CBI in 2004.

CBI principal Gary Engle has maintained that it would cost $100 million to restore the hurricane-damaged property and sought to extend the RUE for 60 years to recoup such an investment. When that effort failed, EHI and CBI offered to terminate the RUE and sell the resort to the government for $70 million on the condition that EHI and CBI be released from all environmental liabilities related to the RUE and Caneel Bay land and improvements.