Public Lands touts RFP free of litigation threats

Kan Pacific Saipan Ltd., the owners of the Mariana Resort and Spa, and the Department of Public Lands differ on their spin of a settlement reached between the government and Kan Pacific and Imperial Pacific International, owners of the Saipan casino, over the government’s allegations that an agreement reached between the two investors in December was collusive and meant to eliminate competition in DPL’s open bid for Marianas Resort lands.

DPL, in a statement yesterday, maintains that the agreement was an attempt by Imperial Pacific, parent company of the Best Sunshine International, Ltd. to “eliminate competition in our RFP.” The CNMI Office of Attorney General on Tuesday, in announcing the settlement, had said that they took “anti-competitive agreements seriously” and would continue to pursue these claims whenever they arise.

But Kan Pacific maintains that the case “had had absolutely no merit whatsoever as to Kan Pacific,” said Kan Pacific counsel Joseph Iacopino in a statement.

“The DPL was essentially trying to claim that BSI was paying KPS to refrain from submitting a bid in relation to the RFP,” he said. “However, Kan Pacific had no intention of bidding on the RFP. Instead of bidding, it had been Kan Pacific’s intention to file a case in court to prevent the RFP process from taking place, largely on the basis that the DPL had represented and promised Kan Pacific that a subsequent lease was going to be issued to Kan Pacific. Kan Pacific wasn’t in a financial position to submit a conforming bid even if it had wanted to. We fully expected to win that case.

“The DPL’s claims were set forth in a complicated case involving multiple parties and multiple issues. Sometimes the cost of winning is much greater than the cost of settlement. Sometimes it just makes better economic sense to settle rather than suffer the expense and tribulation of litigation. Kan Pacific chose to just settle the case and move forward,” he added.

DPL, for its part, said in their statement they were “pleased” to announce the resolution to the dispute.

Among others, DPL also alleged that Kan Pacific’s previous assignments and subleases of public land were void because Kan Pacific failed to comply with its lease and seek DPL’s prior approval.

DPL said that as part of the settlement, Kan Pacific represented that it did not have the financial ability to submit a proposal that was responsive to DPL’s request for proposals.

It said that in dismissing all claims brought in the lawsuit, Kan Pacific and Imperial Pacific agreed to $500,000 to DPL to resolve its claims.

“Moreover Kan Pacific agreed to terminate its lease early if the winning bidder under” the RFP “requests its lease to commence before Kan Pacific’s natural expiration in 2018.”

December’s Kan Pacific-Best Sunshine deal essentially provides that Kan Pacific will assign its remaining lease to the Saipan casino and will continue to operate the resort “for at least a year,” the casino said in a statement then. The Kan Pacific lease expires in April 2018.

“DPL is pleased to resolve this matter and to remove any barriers to completion of its RFP on time and without interference,” said DPL Secretary Marianne Teregeyo yesterday.

“This settlement reaps a significant reward for the Commonwealth, removes the threat of litigation by Kan Pacific to prevent award of a new lease to the winning bidder, and paves the way for DPL to begin collecting significantly higher rents for our public lands in Marpi as soon as July or August of this year,” she added.