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Limetree layoffs as of last night refining part closing ?

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stcmike
(@stcmike)
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I respectfully disagree with you regarding the home price surge. True interest rates are a very big factor but interest rates have been low for many years and it wasn't until 2020 that the US experienced the increased prices. The major home builders are always on the business channels telling the public that demand for housing has increased due to people leaving the cities because many city residents can liveu anyplace and work remotely. In many cases for the same price of renting a 1 bedroom city apartment they can have a 3-4 bedroom home in the suburbs. Regarding St. Croix or any other location when a major employers closes it has an impact on property values. Show me one example where prices have increased when a town's major employer closes

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Posted : June 26, 2021 5:58 pm
Gator's Mom
(@gators_mom)
Trusted Member

You must be from the NE or California. I'm originally a midwesterner so whatever is on the business channels is aimed at folks that live in highly inflated markets. Spent 25 years in FL and those same channels weren't talking about the average Joe there either. 

STX is very far from the company town it was in the days of Hess - who played big daddy to his employees and godfather to their children. 

Limetree from the very beginning was about the profit margin. Nothing else. 

BTW I don't know anybody who worked for Limetree that came to STX to buy a house and settle down with their family. Didn't happen. The COO lived next door to me in a rental house paid for with a company stipend. 

Very very different from the sad days of people losing jobs they had had for 20+ years. Who lived in STX and whose kids graduated from high school here. Everything disconnected for them in a matter of a year.

Limetree - no commitment except to the bottom line. The way of the world now.

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Posted : June 26, 2021 7:17 pm
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Knowlesstak
(@knowlesstak)
Advanced Member

I expect the housing market will crash. Life is getting back to normal and people bought homes may be like the ones who get a pet then realize why they didn’t want one before. lol 

Family member who owns their own real estate company is expecting it. When the price of building materials drop it will be game on. 

Just my opinion. Time will certainly tell. 

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Posted : June 26, 2021 8:25 pm
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daveb722
(@daveb722)
Trusted Member

Housing market was booming prior to covid in the states.  I sold my home in Jan of 2020 in 4 days prior to the March lockdowns.  Home prices were rising for at least 6-12 months prior to that and I reaped some of that fortunately.  Also people were leaving the cities looking for bigger homes, more land, lower taxes as well prior to covid.  My taxes were 1/2 of what you would pay living closer to the city and more house, more land and my municipal services were much better.  My house showing was during a snow storm of about 6 inches in that four hours, we had 20 groups of people look at it and everyone commented on the fact that the town snow plows had cleared my cul-de-sac at least 4x's in that 4 hour period.  I lived in a rural town of 5,000 people.  It was very helpful in selling imo.  As for St. Croix, demand was possibly increasing with the refinery re-opening but most were contract jobs and some permanent jobs in which many were just renting based on a few people I know that work there.  I think the exposure to hgtv helped the VI and opened up a market most state siders didn't know existed.  I was thinking southern Panama prior to here, the USVI didn't even cross my mind until I saw an HGTV episode. I then turned my focus here.  Imo, that helped immensely. With covid lockdowns, it forced people to vacation here instead of other islands or doing cruises.  Hopefully this will help with the future demand for homes as well.  The only hope is that rents go back down, as we need people to work here in the service industry as I see that affecting many businesses now.  

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Posted : June 27, 2021 10:23 am
Stxdreaming1
(@stxdreaming1)
Advanced Member

We have been waiting almost 7 weeks to close a on deal in STX. Was told the market is crazy right now. The reason it is taking so long is that there is only 1 title company on the island and they are overwhelmed due to the volume. 

Like others, I am expecting a huge crash, probably around 2022. Once the unemployment payments stop, give it a few months, probably towards the end of the year and we will start to see the hangover of COVID. Going to get ugly.....

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Posted : June 27, 2021 10:51 am
jaldeborgh
(@jaldeborgh)
Advanced Member
Posted by: @stcmike

 

I don't think the US real estate market boom is caused by those fleeing cities and moving to suburbs.

I disagree, of my 3 daughters, all of whom lived in metro areas 12 months ago, 2 daughters have left the city because of the Pandemic along with the trend towards working remotely (accelerated by the Pandemic).  One moved from downtown Boston to a suburb of Boston and the other moved from downtown Denver to Bozeman, Montana.  Their ages are 28 and 31 and are first time home buyers.  One was even offered lower rent to extend their lease.  There’s a fundamental shift in the market driven by how people work today.  If you’re a young professional with a marketable skill you have a high likelihood of being able to work from home, plus working out of a 2 or 3 bedroom home/condo you own in the suburbs offers a better quality of life than a one bedroom apartment rental in the city……usually for the same money.  My 3rd and youngest daughter is still holding on to her apartment but works remotely when she can and is out of the city staying with relatives and friends (she lives in NYC) at least 30% of the time. 

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Posted : June 27, 2021 12:36 pm
jaldeborgh
(@jaldeborgh)
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Posted by: @stxdreaming1

Like others, I am expecting a huge crash, probably around 2022.

I agree it feels like a bubble and there are some worrying longer term economic indicators but there will be a post Pandemic boom, it’s almost unavoidable, we just don’t know how long it will last.  My biggest fear is inflation that will result in higher interest rates, that along with the continuing growth in the national debt, are the seeds of a recession (or worse).  I’m old enough to have witnessed mortgage rates of 18%, just imagine what a return to those days (Jimmy Carter era) would do to the housing market and the economy as a whole.  I was making $3.11 an hour in my union job at the time, I thank god I went back to school. 

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Posted : June 27, 2021 12:51 pm
stcmike
(@stcmike)
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There used to be a syndicated real estate talk show host named Sonny Bloch who had a philosophy on real estate investing. You make your money when you buy not when you sell. 

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Posted : June 27, 2021 12:51 pm
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stcmike
(@stcmike)
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People who bought St. c real estate in 2014 and 2015 have done well. I remember seeing an apartment in Coakley for 100k and other attractive apartments in orher complexes for under 100k

 

 

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Posted : June 27, 2021 12:58 pm
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jaldeborgh
(@jaldeborgh)
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My guess is the higher end real estate will hold up reasonably well as my sense is a lot of these properties are owned by folks that generated their wealth off island.  Of course there are a good number of island entrepreneurs as well but in the short time I’ve been on the island that’s what I’ve observed.  Someone made the observation that STX is becoming something of an alternative to STJ, I also share this opinion.  My wife and I agree that STJ is the most picturesque island but lacks the culture, diversity and infrastructure of STX, we also both felt STT was simply too crowded and touristy for our liking (I’m sure others will have different opinions).  Also, when it comes to value for money STX is the clear winner.

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Posted : June 27, 2021 5:36 pm
daveb722
(@daveb722)
Trusted Member

@stcmike I bought in 2015, looked at some condo's at coakley bay and yes they were less than 200k then, some were really outdated that we looked at, if I remember correctly one unit still had carpeting.  Now I see them listed over 300k.  I could never do the condo living, but we needed to see what was available at the time, thankfully we bought our home then.

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Posted : June 27, 2021 5:36 pm
rewired
(@rewired)
Advanced Member
Posted by: @jaldeborgh

My guess is the higher end real estate will hold up reasonably well as my sense is a lot of these properties are owned by folks that generated their wealth off island.  Of course there are a good number of island entrepreneurs as well but in the short time I’ve been on the island that’s what I’ve observed.  Someone made the observation that STX is becoming something of an alternative to STJ, I also share this opinion.  My wife and I agree that STJ is the most picturesque island but lacks the culture, diversity and infrastructure of STX, we also both felt STT was simply too crowded and touristy for our liking (I’m sure others will have different opinions).  Also, when it comes to value for money STX is the clear winner.

My wife and I had the same thought process. 

@stcmike

My wife and I bought a condo at St C in 2014 that needed a lot of work. We doubled our money (including the rehab cost) when we sold in early 2020. Since then, units in fair condition have gone up about $25k.

It's true that you make your money on the purchase (on more things than real estate).

My thought is that there will be a much smaller dip in real estate than there was after Hovensa closed. The rental market will likely free up fairly quickly, but the home market will be impacted more slowly. The market is so tight now that it's hard to project whether prices will be hit hard, but if the homes don't all go on the market at once, it's likely to be a relatively slow price decline instead of a crash.

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Posted : June 27, 2021 9:25 pm
vicanuck
(@vicanuck)
Expert
Posted by: @gators_mom

It's not about jobs anymore.

Gator's Mom is correct in my opinion. Home sales and prices on STX are not driven by Limetree employees. They're driven by people buying second homes to live in part time and put on VRBO and AirBNB in the America's Caribbean.

I deal with a lot of real estate agents and they often tell me the same thing.

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Posted : June 28, 2021 8:24 am
daveb722
(@daveb722)
Trusted Member

I get this monthly, gives some good insight, so I thought I'd share.

 

http://www.american-virgin-islands.com/Team_Times_Market_Report.htm

 

 

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Posted : June 28, 2021 2:24 pm
vicanuck
(@vicanuck)
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Posted by: @tn-travelers

BP needs to get the crude from the Guyana oil field refined and although St Croix was 1st choice - there are other options that will be more attractive now.

It is my understanding that discussions with BP are already underway for them to take over the refinery from EIG. Apparently, they really do need the St. Croix facility to service the Guyana output. Stay tuned.

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Posted : June 30, 2021 8:25 am
sttanon
(@sttanon)
Advanced Member
Posted by: @vicanuck
Posted by: @tn-travelers

BP needs to get the crude from the Guyana oil field refined and although St Croix was 1st choice - there are other options that will be more attractive now.

It is my understanding that discussions with BP are already underway for them to take over the refinery from EIG. Apparently, they really do need the St. Croix facility to service the Guyana output. Stay tuned.

It would.be nice... BP I would imagine are safety overboard after gulf diaster.

Refineries can be run in a safe manor that dont cause ecological issues, Limetree is no exception. 

 

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Topic starter Posted : June 30, 2021 11:01 am
TN_Travelers
(@tn-travelers)
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Posted by: @sttanon
Posted by: @vicanuck
Posted by: @tn-travelers

BP needs to get the crude from the Guyana oil field refined and although St Croix was 1st choice - there are other options that will be more attractive now.

It is my understanding that discussions with BP are already underway for them to take over the refinery from EIG. Apparently, they really do need the St. Croix facility to service the Guyana output. Stay tuned.

It would.be nice... BP I would imagine are safety overboard after gulf diaster.

Refineries can be run in a safe manor that dont cause ecological issues, Limetree is no exception. 

 

ArcLight tried to get BP to run the refinery (and take a $$$$ interest), but BP no longer wants to operate refineries (part of their Paris Accord agreement with the UK Government). They offered assistance to LimeTree where they felt they could provide needed expertise".

 

Yes, refineries can be operated in a safe ecological way and if a real refinery operating company were to take over the St Croix refinery, they could run it correctly but as long as the existing owners try and operate it based on the "financials", it will be a disaster.  None of the upper management at LimeTree has refinery operating experience and they never hired enough "experts" to start it up correctly and they ignored their own experts on what needed to be done to start it up correctly.  Always wanting to minimize the spending and take the cheapest route.  

 

The other three refineries were shutdown correctly and will be much easier to restart.  The biggest holdup is that they are all Dutch (or were) and they are all fully committed to the Paris Accords.  But again, $$$$$ talks.

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Posted : June 30, 2021 11:36 am
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janeinstx
(@janeinstx)
Trusted Member
Posted by: @tn-travelers

 

ArcLight tried to get BP to run the refinery (and take a $$$$ interest), but BP no longer wants to operate refineries (part of their Paris Accord agreement with the UK Government). They offered assistance to LimeTree where they felt they could provide needed expertise".

 

Yes, refineries can be operated in a safe ecological way and if a real refinery operating company were to take over the St Croix refinery, they could run it correctly but as long as the existing owners try and operate it based on the "financials", it will be a disaster.  None of the upper management at LimeTree has refinery operating experience and they never hired enough "experts" to start it up correctly and they ignored their own experts on what needed to be done to start it up correctly.  Always wanting to minimize the spending and take the cheapest route.  

 

The other three refineries were shutdown correctly and will be much easier to restart.  The biggest holdup is that they are all Dutch (or were) and they are all fully committed to the Paris Accords.  But again, $$$$$ talks.

I feel like I know you

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Posted : June 30, 2021 11:51 am
TN_Travelers
(@tn-travelers)
Advanced Member

@janeinstx 

Possible.  I have been spending half my time on STX for the past 5 years - and STX is a small island, 🙂 

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Posted : June 30, 2021 12:49 pm
jaldeborgh
(@jaldeborgh)
Advanced Member
Posted by: @sttanon
Posted by: @vicanuck
Posted by: @tn-travelers

BP needs to get the crude from the Guyana oil field refined and although St Croix was 1st choice - there are other options that will be more attractive now.

It is my understanding that discussions with BP are already underway for them to take over the refinery from EIG. Apparently, they really do need the St. Croix facility to service the Guyana output. Stay tuned.

It would.be nice... BP I would imagine are safety overboard after gulf diaster.

Refineries can be run in a safe manor that dont cause ecological issues, Limetree is no exception. 

 

I don’t honestly believe any group of investors or refinery managers wants to cut corners, the cost of an environmental accident/incident is simply too high.  It’s clear that the recent management teams haven’t executed well or communicated well and the result is that all stakeholders are unhappy.  Change is being made and hopefully confidence can be restored.  I share the opinion that our refinery can be run safely, for all stakeholders, and that operating it is, practically speaking, the best outcome for the Territory, for both the short and long term. 

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Posted : July 3, 2021 12:54 pm
Rowdy802
(@Rowdy802)
Trusted Member
Posted by: @tn-travelers
Yes, refineries can be operated in a safe ecological way and if a real refinery operating company were to take over the St Croix refinery, they could run it correctly but as long as the existing owners try and operate it based on the "financials", it will be a disaster.  None of the upper management at LimeTree has refinery operating experience and they never hired enough "experts" to start it up correctly and they ignored their own experts on what needed to be done to start it up correctly.  Always wanting to minimize the spending and take the cheapest route.  

That is accurate, and a reality I faced when I worked there for eleven months. I was told by the third-party representative that they "only wanted to get a five-year run out of the equipment". I didn't agree with that and requested a transfer. When I left, I told many good friends that I didn't want to be near that refinery as soon as it restarted. I didn't want to be a part of a project that was likely to be unsuccessful and dangerous to the people around it and the environment.

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Posted : July 5, 2021 9:27 am
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jaldeborgh
(@jaldeborgh)
Advanced Member
Posted by: @Rowdy802

I was told by the third-party representative that they "only wanted to get a five-year run out of the equipment".

If this is actually true it’s incredibly stupid (on many levels) as any investment in a refinery restart must be viewed as long term, this is a dramatically capital intensive business so any return on capital will only make sense with a long term view…..20 to 30+ years.

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Posted : July 6, 2021 3:53 pm
stcmike
(@stcmike)
Advanced Member

Unfortunately in today's business world no one is looking at 20 to 30 years long term planning. Five years is the most any company will look ahead and 3 years is now more the norm

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Posted : July 6, 2021 6:55 pm
jaldeborgh
(@jaldeborgh)
Advanced Member

I’ve spent the last (almost) 40 years working in the Semiconductor industry where new factories cost many billions of dollars.  Technologically very different than a refinery but from an investment perspective rather similar.  My point being that semiconductor fabs run for decades (in spite of rapidly changing device technology) and while depreciation may be on a much shorter timeframe the business model assumes the fab will run for many many years with ongoing investment bringing upgrades in technology and capability.  From an business strategy perspective I’m guessing the same is true at refineries around the world.  There is no way a refinery is a “one and done” from an investment or technology perspective.  Once you start, the journey goes on forever, or until we no longer need petroleum products. 

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Posted : July 7, 2021 4:19 am
stcmike
(@stcmike)
Advanced Member

Of course anytime a developer puts up an office building, factory, mall or any other large development the the thinking is that facility will be up for many years however unless that facility is generating a profit within a given time period that facility will either be closed or sold. Nobod y is going to wait around for 20 years po u ring good money into a bad investment.

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Posted : July 7, 2021 7:52 am
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