U.S. Department of the Interior
Office of the Secretary

John Wright (202)208-6416


For Release: September 12, 1996

Secretary of the Interior Bruce Babbitt announced today that the federal government and the U.S. Virgin Islands Government have reached an agreement to facilitate the transfer of Water Island.

In a ceremony at the Interior Department in Washington, D.C., Secretary Babbitt and U.S. Virgin Islands Governor Roy Schneider signed an agreement that will transfer to the Government of the U.S. Virgin Islands, ownership of certain parcels of Water Island. Phase I of the agreement will transfer approximately 50 acres, designated as the hotel site, and associated properties, including a catchment basin, deep water dock, public ferry dock, a beach and public roads on Water Island.

"After several years of delay, this agreement begins the process for the transfer of Water Island," Babbitt said. "I look forward to continuing to work with the Virgin Island Government on integrating Water Island into the larger Virgin Islands community."

Under the agreement the Department of the Interior will fund up to $3.325 million for demolition and clean-up of the hotel facilities, removal of hazardous materials, including catchment basin remediation, and repair of the deep water dock that was damaged during hurricane Hugo.

The Government of the U.S. Virgin Islands will repair the ferry dock, remove storm debris and other debris resulting from the demolition and clean-up of the hotel facilities.

Water Island, the fourth largest island (480 acres) in the U.S. Virgin Islands was acquired by the Department of Defense during World War II for a never completed military installation. Water Island was transferred to the Department of the Interior in 1952 and leased for two 20-year terms to a private firm to serve as master lessee to construct a resort complex. The former master lessee granted more than 150 plots to separate subleases. Many of the former sublessees have built homes on Water Island.

The master lease was terminated December 27, 1992. The Interior Department�s Office of Insular Affairs is working with residents to allow home owners to purchase the plots on which they built their homes. The final two phases of the agreement, yet to be completed, will settle up lands deals made with residents and businesses on the island. - DOI -