Ownership of the Caneel Bay Resort at Virgin Islands National Park remains up in the air pending the outcome of a lawsuit/NPS file

A lawsuit over ownership of the Caneel Bay Resort at Virgin Islands National Park has left the heavily damaged property in limbo while the matter moves through the judicial process.

While the National Park Service was to take ownership of the 150-acre property on October 1 under a decades-old agreement crafted by the late Laurance S. Rockefeller, the agency asked that the transfer not occur with the lawsuit pending.

“The National Park Service will comply with a federal court order issued Thursday, which grants the United States’ motion to stay the trial concerning the September 30, 2023, expiration of the Caneel Bay Resort Retained Use Estate as the court moves to resolve the case. In further compliance with the order, the NPS will not take steps to manage or assume possession of the property until receiving further notice from the court,” said Penny Del Bene, the park's acting superintendent.

Rockefeller in 1956 donated the land on the island of St. John that today makes up Virgin Islands National Park. At the time, he held back roughly 150 acres for the Caneel Bay Resort. In 1983, the Jackson Hole Preserve, which Rockefeller had established, donated the land to the park; but 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 Acquisitions, Inc. in 2004. 

In September 2017 the resort was pummeled by back-to-back hurricanes, storms that essentially put the resort out of business. Gary Engle, CBI's principal, then worked with U.S. Rep. Stacy Plaskett, D-Virgin Islands, to craft legislation that would extend the RUE for 60 years, a time period Engle maintained was needed to attract investors for the estimated $100 million it would cost to restore the resort's glimmer. But that legislation failed to gain traction.

In 2019 Engle offered to essentially terminate the RUE and sell the resort to the federal government for $70 million, a move that raised questions of whether he was properly interpreting the the terms of Rockefeller's RUE.

Engle in June 2022 brought a lawsuit against the United States, claiming that the resort legally belongs to CBI, and asked a federal judge to declare the Interior Department has no legal claim to the property.

According to the 26-page filing, the federal government lost its hold on the property in 2019 when it turned down an offer from CBI to transfer the property and its title to the government for $70 million. Under that offer, CBI requested indemnity from any environmental liability tied to the property, "other than for contamination caused by Caneel Bay." Along with seeking that payout, CBI claimed it would still control the marina on Caneel Bay that services the resort and so any future operator would have to negotiate a deal to use it.

Earlier this summer the Park Service approved a redevelopment plan for the 150 acres that calls for a "21st century eco-resort" that could offer up to 166 overnight accommodations, which was the limit of the resort that was largely destroyed by the 2017 hurricanes The plan did not, however, provide any detail for the lodgings or price ranges. It did call for day use areas for park visitors not staying at the resort, perhaps at Honeymoon Beach, Little Caneel Beach, and Caneel Beach.