Race against time as $3.14B casino deal details out

Best Sunshine International Ltd. can use up to three Saipan development sites for its $3.14-billion integrated casino resort, even as a development plan advisory committee will be formed to review and advise on the resorts design and initial gaming facility. These are among the details of an up to 40-year agreement signed by the Lottery Commission and Best Sunshine on Tuesday and formally presented to Gov. Eloy S. Inos on Friday.

Gov. Eloy S. Inos, second from left, formally receives on Friday a copy of a $3.14-billion Saipan integrated casino resort development agreement signed Tuesday by Lottery Commission chairman Sixto Igisomar, left, and Imperial Pacific/Best Sunshine represented in the event by Best Sunshine chief operating officer Terence Tay, second from right. Also in photo is commissioner and Finance Secretary Larrisa Larson, right. (Haidee V. Eugenio)

The governor also conferred, albeit for ceremonial purposes, the integrated casino license to Best Sunshine through the Lottery Commission.

Inos, at the same time, re-submitted on Friday Alvaro A. Santos’ name as a nominee to the regulatory Commonwealth Casino Commission. Inos also nominated Joseph C. Reyes to the Casino Commission.

Both appointments require the confirmation of the Saipan and Northern Islands Legislative Delegation.

Terence Tay, Best Sunshine’s chief operating officer, said the casino license grant last week is just one of many milestones and timelines to achieve. He echoed the governor’s statement that it’s time to really roll up sleeves and “get to work” to build the integrated casino resort.

“So this particular milestone…merely symbolizes the beginning of another race and in many respects, a race against time,” Tay said at the Friday ceremony.

Just like the governor, Tay acknowledged the hurdles along the process but those have since been overcome and the parties have taken a major step forward.

“Aside from the inherent commercial risk of such a large, massive investment, there’s a lot of work to be done,” Tay added. He asked the community to work with Best Sunshine “to make it happen and we will do it together.”

Within 60 days of the license award, Best Sunshine is required to provide to the Development Plan Review Committee its proposed implementation schedules.

This committee requires two members—an architect or engineer representative or firm experienced in integrated resort development selected by Best Sunshine and representing its interests, and a firm with extensive experience in multiple aspects of integrated resort development representing the CNMI’s interests and reports to the governor.

Best Sunshine agrees that a liquidated damage charge is $100,000 per calendar day. This is for unexcused delays in the development plan schedule, which may be amended from time to time.

The agreement was signed by Lottery Commission chair Sixto Igisomar and Cai Ling Li of Best Sunshine International, and approved as form and legal sufficiency by acting attorney general Gilbert Birnbrich.

Imperial Pacific/Best Sunshine has eight years or up to 2022 to fully complete the project, although the initial gaming facility has to be built within 24 months of land acquisition.

But the existing labor pool of U.S. workers and foreign workers is believed to be not sufficient to build all the needed developments.

Within 36 months, the basic structure of an integrated resort also has to be built but no later than 42 months from license issuance date. These include an 800-room, 4- or 5-star luxury hotel, a $100-million themed entertainment facility with amphitheater, and 10,000 square meters of gaming areas, among other things.

Under the casino license terms and conditions, all of Best Sunshine’s gaming activities authorized under the license are limited to these up to three development sites.

“Development site” means a single parcel of property or a grouping of adjoining connected parcels that presents a unified uninterrupted parcel that is under Best Sunshine’s control.

The CNMI, under the deal, agrees to actively assist Best Sunshine to secure suitable property for the required land.

Under the agreement, Best Sunshine shall build an integrated resort as phase one of the development, inclusive of accommodations, entertainment, retail, service providers, and casino facilities.

Gaming area

Although the casino operations are central to the concept of an integrated resort, the total area where actual gaming takes places is no more than 20 percent of the integrated resort’s gross floor area.

All structures and associated elements of the integrated resort are required to be of a uniformly high luxury standard, comparable to those of the Venetian and Palazzo casinos in Las Vegas and Resorts World Sentosa in Singapore.

Under the casino license terms, Best Sunshine shall promote and hire at least 65 percent U.S. or local residents of all employees.

House Speaker Joseph Deleon Guerrero (Ind-Saipan) brought the local hiring issue during the ceremony, which Tay said Best Sunshine is committed to doing.

Sen. Pete Reyes (Ind-Saipan) also encouraged Best Sunshine to tap businesses that are in the CNMI.

“Your success is our success. We wish you all the luck. If there’s anything we can do to help, let us know,” Reyes added.

Besides Igisomar, the three other Lottery Commission members were Finance Secretary Larrisa Larson, Public Safety Commissioner James Deleon Guerrero, and acting Attorney General Gilbert Birnbrich. Counsel Jim Stump has also been an integral part of the process.

The governor and Tay thanked the Lottery Commission, Stump, the Legislature, and others who helped to move the casino license forward. The others in the crowd also thanked the governor and Tay, along with the whole Best Sunshine team.

The CNMI required that the license be held by a CNMI entity and has required Best Sunshine to form a domestic entity, Imperial Pacific International (CNMI) LLC, which is the designated licensee.

Community chest

Besides the $1-million nonrefundable application fee and the $30 million held in escrow and on its way to pay retirees and defined benefit plan members, Best Sunshine will be releasing more dollars into the community within months.

Within 60 days of the Aug. 12 date of issuance, Best Sunshine will provide $10 million in the form of Commonwealth Utilities Corp. vouchers which will be distributed in consultation with the governor.

Tay clarified that the definition of those who are eligible to receive the CUC vouchers is still “not clear cut” and would need more time to be refined.

“I think the language is still being ambiguous. Give us some time,” he later told reporters.

Within 60 days of commencing construction work on the first hotel in the integrated resort, Best Sunshine shall contribute $20 million toward its community benefit programs such as on education, scholarship, infrastructure, health care, and employee retirement benefits, as may be determined in consultation with the governor.

Another $20 million will be released upon the first full year of operation of Best Sunshine’s first hotel in the integrated resort.

The casino license or the duties entailed may not be transferred, encumbered, assigned, pledged, or otherwise alienated without the Casino Commission’s express written consent.

House floor leader Ralph Demapan (R-Saipan), author of the casino bill that became law, said the casino measure will go a long way in addressing the financial needs of the retirement plan but also tourism and employment.

Tons of work ahead

At the ceremony, the governor asked permitting agencies, as well as the Department of Public Lands represented by Secretary Pete A. Tenorio, to assist the developer to get the project moving.

Inos told the crowd gathered in the governor’s conference room that the process wasn’t a smooth sailing “but we managed to get through and basically addressed many of the concerns, especially those coming from the private sector.”

“I am pleased that we have reached this stage in the process of the integrated resort development project despite challenges along the way. I ask all permitting agencies to ensure that all necessary requirements are met in order to move this project forward. I thank the members of the legislature, the cabinet, and all who have gone above and beyond to move this project along. The CNMI looks forward to working with Best Sunshine for the benefit of the people of the Commonwealth,” the governor said in a separate statement later.

The governor spoke of major economic improvements, creation of thousands of jobs, raised standard of living.

“There’s just all kinds of opportunities for all of us. This couldn’t have come at a better time. We’re at a point where we really need to address many of our government’s financial obligations primarily retirement fund and all the other needs delineated in the statute,” he told the crowd.

Inos said this is “just the beginning but it’s going to be a major change.”

“It’s going to transform our economy here in a major way…” he added.

DPL’s Tenorio said the department will do its best to assist Best Sunshine in finding suitable tracts of land for the integrated resort.

During the ceremony, Tenorio sought guidance from the acting AG, Birnbrich, as to what DPL should do to the “No to casino” signs still on public land especially now that the casino referendums won’t make it to the ballot on Nov. 4.