In September 2017 the USVI was subject to an unprecedented two category 5 hurricanes.  Hurricane Irma grazed the north side of St. Thomas and two weeks later the eye of Hurricane Maria passed just a few miles off the southwest corner of St. Croix.  News from the Virgin Islands was slow to materialize in the hours and days after Maria and was tempered as Maria was taking direct aim at the neighboring territory of Puerto Rico before heading to Florida.  As news began to come out, three things were strikingly evident; all leaves had been stripped from vegetation transforming the verdant green landscape to brown, the infrastructure including the electrical grid was in tatters and would take months to restore, and the stringent building codes saved the islands from catastrophic damage. Fortunately, the resilience of the people of the Virgin Islands quickly showed through and the islands recovered beautifully. 

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While investors should have a healthy concern for natural disasters such as hurricanes, it should be recognized that these types of events can happen at any locale.  The coast of New Jersey and New York City were severely impacted by Superstorm Sandy.  Flooding put Houston at a standstill.  Katrina ravaged New Orleans and the Mississippi and Louisiana coastlines.   Wildfires have greatly impacted areas around Los Angeles and in the Napa Valley region of Northern California.  Tornadoes wreak havoc on the heartland while earthquakes disrupt life west of the Rockies.  Storms and other natural disasters can strike with little to no warning anywhere. 

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A greater measure for investors should be what the local regulations and government have done in advance to mitigate damage and destruction and how the government, utilities and locals respond after a major event.  There will certainly be lessons learned and future plans put into place after the storms of 2017 but the government, utilities and locals of the USVI have proven thoughtful and tenacious to limiting damage and rebounding from what was wrought.

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After Hurricane Hugo in September of 1989, the USVI greatly strengthened its building codes.  The result of these new codes is evident in the limited amount of damage to most buildings from the recent storms.  While there certainly was damage to structures, the severity of the damage was greatly curtailed.  Of greater concern for many residents and businesses was the total loss of power.  The local utility, WAPA, lost 100% of its generation and transmission capability.  In very short order, however, the local agency in close concert with FEMA and other agencies began the total rebuilding of the electric grid.  Within 100 days of this catastrophic event nearly 50% of the power has been restored and the pace is improving daily as the biggest delay is now supplying new transformers throughout the new system.  Serious discussions are underway as to options which can be put in place to safeguard the systems in the future.

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Within a week of the storms, nature began its miracle of regrowth and the islands are now greener than before.  Lessons have been learned from past storms and will be learned from these but the quick reopening of the USVI for business after such a strong impact bodes well for future reactions to storms and other natural disasters.  Perhaps the greatest indicator for the future, however, is the attitude of the people of the territory.  With strong will and determination they faced the immediate hardships, took the inconveniences in stride, and moved forward to quickly rebuild a paradise that was better than before.

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