Judge weighs bid to halt Caneel Bay resort lease plan

A federal judge is considering whether to stop the National Park Service from issuing a development proposal for Caneel Bay on St. John, as two nonprofit groups challenge the agency's shift away from a more restricted building scheme.

The Ecological Collective USVI and the Coalition to Protect America's National Parks filed suit on October 26, asking the court to block the Interior Department's plan to seek a private developer willing to lease the entire 150-acre property. Their lawyer, Thomas Moukawsher, told residents at a public gathering this week that the Park Service is abandoning its own environmental findings.

According to Moukawsher, the agency's environmental assessment, completed after extensive community input over more than two years, explicitly ruled out handing the full parcel to a single resort operator. "Their own legally binding document said, whatever you do, don't do this. And then in May of 2026 they turned around and did exactly that," he said.

The original development framework that emerged from the public process limited the resort to 166 rooms across 67 acres, kept historic structures under Park Service management, and prioritised local employment. The nonprofits want the court to order the agency to scrap the current proposal and return to that plan, using a concession agreement rather than a lease.

Moukawsher contended that a lease arrangement is legally improper for this type of transaction and that the Park Service is making an "arbitrary and capricious decision" by disregarding its own study. He noted that a concession agreement gives the Park Service greater oversight of public benefit than a lease does.

Both sides have agreed that the government will announce any developer selection at least 30 days in advance, allowing the groups time to seek further court action if necessary. As of Sunday, the judge had not ruled on the preliminary injunction request.

The property's legal status was settled in April 2024 when U.S. District Court Judge Cheryl Ann Krause determined that the National Park Service owns Caneel Bay. The 3rd Circuit Court of Appeals upheld that decision last year. The ownership dispute stemmed from a 40-year agreement made in 1956 when philanthropist Laurance Rockefeller donated 5,000 acres to establish the Virgin Islands National Park but retained private control of the 150-acre Caneel Bay parcel. After hurricanes destroyed the resort in 2017, the then-owner EHI offered to sell the land to the government for 70 million dollars, contending that ownership had reverted to the company under the original terms.

Brion FitzGerald, a former superintendent of the Virgin Islands National Park, serves as vice president of the Ecological Collective. The group said it will hold additional public meetings to inform residents as the litigation continues.