MPLT property sits idle as board postpones building project

A property on Capital Hill purchased by the Marianas Public Lands Trust has been sitting idle for years and has not been earning revenue for the government.

MPLT bought a 4,000-square meter land on Capital Hill in 2007 for a planned commercial building where it will also hold its permanent business office.

Saipan Tribune learned that MPLT paid $200,000 for the property.

MPLT chair Alvaro Santos explained Tuesday that the project was put on hold due to the financial challenges being experienced by the agency since 2007.

He assured, though, that the MPLT board is still firm in its desire to build a commercial building on the acquired space. As to when that will happen, he could not say.

“We bought the land in 2007. We sent out [a request for proposals] for the architectural and engineering designs and we had responders. We also conducted the interviews and we were getting into the works.but the financial crisis was approaching so we put everything on hold,” he said.

He estimates MPLT to need $700,000 to build the commercial building.

Santos believes that pushing through with the project amid difficult times will only result in a significant loss for MPLT’s earning ability.

“If we lose money, how can we fulfill our obligation to the central government?” he asked.

MPLT is a semi-autonomous agency that receives land lease payments on government property. These payments must be invested and all returns and earnings are remitted to the general fund. As of Sept. 30, 2011, its portfolio-invested in fixed income and equities-was valued at $71 million.

MPLT currently occupies space on Capital Hill where the U.S. Department of Homeland Security is assigned an office.

Because of this, Santos said the board has decided to lease space at the Retirement Fund building starting Dec. 1, for which it will pay about $15,000 a year. He thinks this is a pittance compared to spending $700,000 for the construction of a commercial building.

“It is still cost-effective because we will only be renting the space for like $15,000 a year as opposed to capital outlay of $700,000,” he said.

The board still has to decide, however, whether to go ahead with moving to the Fund building due to some “stringent conditions” in the lease agreement being proposed by the NMI Retirement Fund, Santos said.

“If they will stick to those terms [in the draft lease proposal], maybe we may have to explore other avenues because in the end, it will cost us a lot more than what we expected and we don’t want that to happen,” he said.

Santos did not disclose these stringent conditions.

Fund board chair Sixto Igisomar told Saipan Tribune Tuesday that the draft lease agreement contains the same provisions as that of the former tenant, the Public School System. He said the board is willing to work with the MPLT to “iron out” these issues.

Both Fund and MPLT chairs said there is no plan at this time to sell or buy the Fund building, which has an estimated value of $3.4 million some five years ago.