Marina transfer hampered by $8M owed MRC

The Commonwealth Ports Authority will have to cool its heels before it can operate the Outer Cover Marina following disclosure that the Executive Branch has put off transferring the property to CPA as the CNMI government still owes the marina’s operator some $8 million as part of a settlement deal.

CPA executive director MaryAnn Lizama, who followed up on CPA’s request for the transfer of the property to its fold, reported Friday that Gov. Eloy S. Inos has deferred his decision on the matter because of the government’s unpaid obligation to the late businessman Tony Pellegrino, the operator of the marina.

Saipan Tribune learned that Lizama met with Department of Lands and Natural Resources Secretary Arnold Palacios on Dec. 6 to discuss the CPA’s issues with the marina.

She disclosed that Palacios told her that the governor has set aside the transfer of the Outer Cove Marina due to issues plaguing the marina that remain unresolved.

“One example [of these issues] is the $8 million Pellegrino settlement,” Lizama said.

It was Pellegrino’s company Marine Revitalization Corp. that built the Outer Cove Marina for $3.5 million in 1995. Under his agreement with the government, the NMI government was supposed to pay MRC $800,000 and allow the company to recoup its construction cost from those using the slipping docks until the lease agreement expired on Aug. 21, 2010. Pellegrino later sued the government for breaching the agreement. He won the case and the CNMI government was directed to pay Pellegrino for his losses. The government’s debt to MRC was last estimated at $8.5 million, including interest. Pellegrino recently passed away after waiting for the government’s payment for many years.

Saipan Tribune learned that the DLNR currently has responsibility over the marina after the approval of the submerged land lease agreement between the MRC and the CNMI government.

Because the operation involves seaport activities, CPA earlier asked the governor and DLNR to transfer the operation to CPA.

However, the claim to take over the operation of the marina became because of the involved court litigations and mediations on the issue. It was disclosed that once CPA is given the authority over the marina, it will be obligated to pay the money owed MRC.

CPA is in the process of getting the grant of public domain not only for the Outer Cove Marina but also for the “vast land” between the Army Reserve facility and the marina so it could develop the property and earn revenue from it.