MVA: Unfortunate new lease agreement turns to RFP

The Marianas Visitors Authority describes as unfortunate the Department of Public Lands’ decision to solicit proposals on expiring public land leases, which affects a number of hotels in the CNMI.

“The MVA has been in several HANMI (Hotel Association of the Northern Marianas Islands) meetings that touched on the impending expiration of public land leases of several major hotels. The MVA supported HANMI members’ request for the DPL to consider entering into a new lease agreement with the existing land leaseholders. Per DPL’s letter, however, this is no longer a consideration unfortunately,” managing director Perry Tenorio said in an email.

As of now, Marianas Resort & Spa isn’t happy with DPL’s decision and will submit its initial response on the issue.

Marianas Resort is the first hotel with an expiring public land lease in April 2018. Other hotels with upcoming expiring leases through 2025 are Hyatt Regency Saipan, Fiesta Resort & Spa, Kanoa Resort, and Pacific Islands Club Saipan.

HANMI president and general manager for Marianas Resort Gloria Cavanagh earlier supported the idea regarding their respective lease proposals.

Cavanagh, in an earlier interview, said that they had a very positive meeting with DPL Secretary Pete A. Tenorio a year ago about expiring hotel land leases. However, the recent decision now has put HANMI on alert.

HANMI members account for most of the hotel rooms in the CNMI. HANMI provided the CNMI $13.2 million in hotel occupancy tax as well as $4.4 million in gross revenue receipts. As of now HANMI has more than a 1,000 employees.

Some member hotels of HANMI are holding back on making future investments on their hotels if they cannot get any assurances that their land lease agreements will be extended.

Without such an assurance, hotels whose public land leases are close to expiration say the uncertainty is putting a damper on their plans to improve amenities and raise hotel standards.

In an earlier interview Cavanagh said that, without the assurance of their continued stay, the quality of HANMI hotels is going to be lower because no one is going to put in the millions of dollars in investment.

“It doesn’t create a very good market for new investors coming in and being on time and meeting our commitment. A new kid in town can come and say I want that property and you’re out. They’ll think twice about investing. We all have been here for 30-plus years and through thick and thin. When Japan Airlines pulled out, we have proven that we want to stay and be contributing corporate citizens and if I want to look at a long term investment, I want to see first how we are treated,” Cavanagh said.