Don’t kick out Mariana Resort

I have been following the request of Kan Pacific, Inc., the owner of Mariana Resort and Spa, to renew its public land lease in Marpi. Kan Pacific is the Japanese-owned company that built the first 18-hole golf course in the CNMI when the Commonwealth was just starting out in 1978. The company is as old as the Commonwealth itself.

Over the years, through thick and thin, Kan Pacific has weathered our economic ups and downs with the people of the Commonwealth. It never gave up on the Commonwealth. Almost 40 years have passed since the company started doing business here and its public land lease will be expiring soon. The company has been meeting with officials at the CNMI Department of Public Lands with respect to its request to enter into a new lease agreement that will begin when its present leasehold expires.

So what does DPL do with Kan Pacific’s request to negotiate a new lease agreement? It tells Kan Pacific that it will instead invite all interested firms to submit proposals to lease the same property now being leased to Mariana Resort. In other words, notwithstanding the millions and millions of dollars in hotel, golf course, and other permanent improvements made by the company over the years, Kan Pacific will instead have to go back to “square one” and start all over again. It will have to compete with other interested firms over the same property that Kan Pacific has developed and improved over the years. If Kan Pacific’s proposal loses, the proposer that is selected will have a huge “windfall” with all the improvements made by Kan Pacific over the years.

Is this fair, as a matter of public policy? Of course not. Mariana Resort has helped spur the growth of tourism in the CNMI. It has paid hundreds of thousands of dollars in taxes to the CNMI government over the years. The negative message that the CNMI government will be sending out to all those companies that have been leasing the CNMI public lands over the past 20, 30, and 40 years is this: When your public land lease expires, you will also be kicked out.

But if you are a close friends or crony of our government leaders, no request for proposal is required. And the best example of this is the recent leasehold grant of the “Samoan Housing” property to Best Sunshine in Garapan. No RFP was required to lease this property because the lessee is Best Sunshine. Best Sunshine, as we all know, is the company that was given the exclusive casino license for Saipan. CNMI government leaders went out of its way to give Best Sunshine the “royal treatment.” Zoning rules and regulations were waived to accommodate all of the company’s requests. Everything Best Sunshine wants from the Commonwealth government, it gets. This is, of course, unfair and smacks of cronyism.

As for Mariana Resort, it appears that it will be kicked out of its premises once its lease expires. The CNMI government will be kicking out the last Japanese-owned hotel in the CNMI, a hotel that has expended million and millions of dollars in improvements in the CNMI. It will kick out a company that has contributed to the growth of the CNMI tourist industry over the past four decades. It will kick out a company that has paid hundreds of thousands of dollars in taxes over the years. Is this the message that we also want to send out to the Hyatt Regency Saipan, Fiesta Resort and Spa Saipan, Pacific Islands Club, and all the other companies who are now leasing public lands? Of course not.

In order not to give this ominous message to our bona fide investors so that this will not happen, the Department of Public Lands has to adopt a sound public policy with respect to public land leases that are expiring. DPL must recognize that, with respect to public land leases that will soon be expiring, our public policy should be to give the existing lessees an opportunity to negotiate a new lease that is reasonable and fair. It should not kick out a tenant that has been a good corporate citizen for many years. DPL needs to realize that it is better to allow the existing tenants to have a new leasehold if they are contributing positively to the economy of the Commonwealth. It is better to adopt this positive policy rather than taking the risk that a new and untried investor will bring to the Commonwealth. This would be a fair policy. And fairness to existing leaseholders should always be the guiding principle for all government activities and functions.

I am, therefore, urging the governor, lawmakers, and DPL officials to please reconsider the DPL decision not to negotiate a new lease with Kan Pacific, Inc.

Enfin Serafin!

Alexandro ‘Colonel’ Sablan
Dandan, Saipan