COP owner: Renovation plan must be put on hold

Suwaso Corp., the owner of Coral Ocean Point Resort Club, disclosed yesterday that its efforts to renovate the resort must be put on hold in light of the Department of Public Lands’ notice of breach and its threat to terminate the corporation’s lease.

Suwaso Corp. board chair Vincent DLG. Torres told Saipan Tribune that he sent a letter yesterday to acting DPL secretary Pedro I. Itibus disputing DPL’s determination that Suwaso breached the lease agreement for the property at Agingan Point.

Torres also clarified that Suwaso released only 34 employees and that 42 others are still employed.

In his letter to Itibus, Torres said the risks involved increases significantly from the threat of termination and that they need to get assurance from DPL to proceed with their project.

“We kindly ask your good office to work with us in good faith and for your support and cooperation in ensuring that our project remains viable,” Torres told Itibus.

He asked Itibus for a meeting next week, May 20 to 25, 2012, to discuss the notice of breach and to clarify “any misunderstandings.”

In his notice, Itibus cited at least three lease conditions that Suwaso allegedly failed to address. He gave the corporation 30 days from May 1, 2012 to address the alleged deficiencies.

If Suwaso fails to address the deficiencies within the 30-day period, Itibus said that DPL will treat Suwaso as being in default and will terminate the lease agreement.

The first breach of condition is Suwaso’s alleged failure to submit its construction plans by the given deadline.

The second breach, Itibus said, is by failing to secure and submit the necessary permits within the allotted time.

The third breach, Itibus said, is Suwaso’s failure to submit enough evidence of its sources of financing.

In Suwaso’s reply yesterday, Torres pointed out that the 1986 lease agreement should not be applied to Suwaso’s latest renovation plans. Instead, the 2011 lease is the proper applicable legal terms and conditions, he said.

He pointed out that the corporation submitted its architecture and engineering plans and specifications to Itibus on April 10, 2012.

In that letter, Torres said, they specifically asked for Itibus’ guidance and advice on how to secure the necessary permits from other governmental agencies.

In particular, Torres said they asked whether or not the proper procedure is to secure first the approval of their plan by DPL and then proceed to secure the rest of the government permits based on DPL’s approved plan and to them know as soon as possible.

Torres said that based on a provision of the 2011 lease, DPL has 30 days to review their plan and specifications and give them a reasonable time to submit any further information or necessary changes.

“We were waiting for your response and guidance. And we were surprised that, instead of communicating and resolving any pending issues with us, your office issued a notice of breach (which is improper),” Torres told the acting secretary.

He also pointed out that the 2011 lease provided that the financing document must be drafted with enough specificity to be verifiable and acceptable to DPL. “It did not say that Japanese language using English numbers is unacceptable or that only the English language is acceptable,” he said.

Torres explained that they submitted the original bank certification, which was in Japanese, but the amount of money in the bank was in English and could easily be understood and calculated accordingly.

Torres assured that, although Suwaso is in compliance with the 2011 lease, they will still provide all the documents that DPL is asking for.

Torres told Saipan Tribune last month that COP is shutting down its hotel and room operations beginning May 13 to give way to its $20-million renovation project. Torres had said they will begin the process of its renovation and construction plan pending governmental permit approval.

The golf course and one of COP’s restaurants will remain open.

COP is located on a 735,023 square meter property at Agingan Point, Saipan.