MVA backs bill extending terms of public land leases

Concepcion

The top official of the Marianas Visitors Authority believes a Senate bill to extend the lease terms of public lands for a total of 55 years is good news for the CNMI’s tourism marketing arm.

If signed into law, Senate Bill 20-35 will entice more for businesses to invest in the CNMI market, said MVA managing director Chris Concepcion.

Senate Bill 20-35 would allow public land leases to be extended to 40 years (from the current 25 years), with an extension of up to 15 years—for a total of 55 years.

Article 12 of the CNMI Constitution already allows a maximum lease term of 55 years for private land leases.

“Investors seek maximum return on their investment and land leases are a key determining factor when making decisions on where to spend their money,” said Concepcion.

He said that Senate Bill 20-35, if enacted, will encourage investment in the CNMI “since it basically allows foreign-owned companies the ability to hold public land leases similar to the maximum length allowed for private property, which is set by Article 12 at 55 years.”

Senate Bill 20-35 already passed the Senate last week and is awaiting House action.

Currently, there are five hotels which leases will expire soon: Hyatt Regency Saipan, Fiesta Resort & Spa Saipan, Kanoa Resort, Pacific Islands Club Saipan, and Coral Ocean Point Resort Club.

With the CNMI’s booming tourism, the economy cannot afford to lose hotel accommodations, Concepcion said, or invest in below quality accommodations for visitors and tourists.

Concepcion said that today’s tourism industry is highly competitive. “In order for the CNMI to remain a topnotch destination, we need to have hotel properties that meet or exceed the standards expected in other destinations.”

“Hotels in the CNMI are eager to improve their product but are hampered by the terms of their lease. No sound business owner would make any substantial investment in their properties if the return will be minimal or at a loss,” he added.

 “If they are to invest millions to upgrade their facilities, they should be allowed ample time to recoup that investment. This bill will do just that.” Concepcion added.

MVA sees a number of advantages if Senate Bill 20-35 becomes a law.

“For one, it permits them to reinvest in their properties and recoup that investment over a certain time period. Second, it provides higher standard for the tourism industry and better facilities for our visitors who have become very sophisticated, with high expectations when visiting beach resort destinations that fly the U.S. flag.”

Concepcion added since the CNMI is a part of the United States, people expect its standards to be at par with other premium destinations in the region. 

“Unfortunately, some of our existing hotel properties have not been able to keep up with those expectations because of the potential revenue loss they may incur should their leases expire before they are able to realize a solid return on investment,” he said.

The extension of public land leases will give these hotels the needed reassurance and will be another boost to the CNMI’s economy, he said.

 “The investment climate in the CNMI remains positive and this law will only enhance the appeal of the Marianas as a preferred destination for people looking to spend,” Concepcion said.