Igisomar: Faith is foundation of IPI project on Saipan

At first, Sen. Sixto K. Igisomar (R-Saipan) had some doubts before signing the casino license agreement between the CNMI Lottery Commission and Imperial Pacific International (CNMI) LLC. Igisomar, as then-commission chairman, represented the CNMI government.

“I had doubts, we all did. I had doubts in the casino truthfully. When we signed that agreement, it was all based on faith. The investor placed a lot of faith in it. In signing it [CLA], we also placed a lot of faith in it,” Igisomar told Saipan Tribune.

Without that faith, the license would have stagnated. “Without faith, it would not work, this thing would have never been signed. We will be overwhelmed with doubt.”

The CNMI Lottery Commission, under the agreement that was signed on Aug. 12, 2014, gave IPI the exclusive license to operate a casino in the Commonwealth.

Igisomar said a lot of uncertainties came up during the commission and IPI’s discussions before the agreement was signed. Both parties, however, put faith in each other in order for the project to push through.

“The question that I was asked was, ‘Chairman, there’s a lot of things here that we are unsure of. There are a lot of uncertainties.’ [I answered] ‘You know, I agree with you, there are uncertainties,’” Igisomar said. “’We don’t know what the future would bring. We’ll eventually have problems with labor and with infrastructure, but everybody needs to play its role to make sure everything is in its place.”

Having a Development Planning Advisory Committee was one of the provisions included in the license agreement. DPAC acts as a liaison between the CNMI government and IPI on the initial gaming facility project, and oversees and anticipates the future for the new industry on Saipan.
“You are talking about resources, workers, infrastructure impact, dumpsite, landfill, hospital capacity in accommodating the population growth, the tourism that we’re going to have, the size of Garapan…these are the issues considered,” said Igisomar.

As it is, the CNMI could be likened to Macau, which used to be a sleepy outpost of Portugal before barging into world-consciousness because of its glitzy casinos. The CNMI is starting to experience some of the issues that Igisomar mentioned, with IPI also affected by the numerical cap on the CW1 program, and Garapan’s central business district becoming congested.

Past due obligations

Igisomar said IPI’s investment in the CNMI pumped in new revenues that gave the government the chance to take care of some of its obligations. “We make sure taking care of our people is our No. 1 priority.”

“It is not all about money but for the betterment of our people and for them to be healthier and wealthier. For everything that we do, we should consider that,” Igisomar added.

He said the money collected from fees paid by IPI enabled the government to settle some of its obligations for land compensation, for the Commonwealth Healthcare Corp. and CNMI Public School System to pay their debts with the Commonwealth Utilities Corp., and for retirees continuing to receive their pensions and have some extra for bonuses.

“Their [IPI] continued existence helped us settle some obligations that the government previously can’t. Their continued existence could help the government to be able to retire all of these debts and pay off what we owe people.”

“As of now, from what we are sensing and feeling as a result of their existence, they are taking care of a lot of financial obligations that we could not.”
 
Allow extension request

Igisomar supports IPI’s request to extend the implementation of the scheduled deadlines. IPI chair Mark A. Brown wrote Gov. Ralph DLG Torres last month to ask for an amendment to certain provisions of the agreement regarding the deadlines.

Under the license agreement, a penalty of $100,000 would be imposed on IPI per day of delay in completing Phase I and II.

“That’s why we encourage that there should be a discussion. [IPI’s] extension request should be reviewed. We can’t delay any response and we must act on it. Any delay would be additional burden that we could not afford,” said Igisomar.

The timeline was originally set in collaboration and consultations with IPI and the CNMI through the Lottery Commission. However, several unanticipated factors slowed down IPI’s projects. “The idea is for them to follow the timeline as much as possible. There are a lot of factors we must consider.”

“There’s Typhoon Soudelor, and CW1 and H1 [visas] issues. We cannot just say ‘you’re late, get out.’ There should be an extension. Understanding the cause and reason would be the communication between the government and [IPI]. Collaborate and make a decision when it comes to [IPI’s] request.”

He is encouraging the government to take into considerations several issues before making a decision on IPI’s request. “This is a huge venture, between $2 billion to $3 billion. We can’t just procrastinate [on a project] of this magnitude. We created a timeline, to see the vision of retiring all debts and obligations.”

He added IPI also needs to make sure it would also lessen its cost. “The government needs to make sure things happen. We should get this done to lessen any form of impact.”

Brown, as stated in IPI’s letter to Torres, said that Typhoon Soudelor’s onslaught on Saipan last August 2015 had an impact on their construction site in Garapan. “At the starting phase of construction, [IPI] had one heavy equipment auger and two pile drive machines. The auger was extensively damaged and during the storm, rendering it inoperable.”

The limited cement supply, unpredictable ground condition, dewatering issues, air rights agreement for tower cranes, inclement weather, lack of readily available skilled laborers, length of time to execute the public land lease for Garapan, and Mariana Resort & Spa’s lease expiration were the other reasons cited by Brown.
 
IPI’s project development

IPI, under the license agreement, proposed the following new construction development: 2,004 hotel guest rooms; 17,000 square meters of total gaming floor area, 13,532 square meters of food and beverage outlets (at least 23 outlets); 15,000 square meters of retail space; a wedding chapel; 600-seat theater; 9,094 square meters of meeting space including ballroom; 200 villas; 1,050 square meters of fitness area; $100-million themed entertainment facility; and 1,900 square meters of spa facility.

IPI’s initial gaming facility, the Imperial Pacific Resort in Garapan that is set to open its casino later this month, will have a minimum of 250 rooms. The total cost of all proposed projects is $3.14 billion.