Lease to half of Hotel Riviera land is terminated

A security company watches over the premises of Hotel Riviera in Finasisu when this file photo was taken last March. The Superior Court has terminated the ground leases of four lots where the hotel is located after the hotel owner failed to pay rent and not maintain the property. (Ferdie De La Torre)

The Superior Court terminated yesterday the lease of a Korean company on half the lot in Fina Sisu where the now abandoned 135-room Hotel Riviera is located. The property is owned by the family of the late governor, Pedro P. Tenorio.

Associate Judge Kenneth L. Govendo granted the request of Sophia P. Tenorio and the estate of Pedro P. Tenorio to issue a default judgment against Chang Shin Resort Saipan Corp., which owns Hotel Riviera Saipan.

Govendo entered a judgment in the amount of $144,972 for the unpaid rent of lands.

Michael Dotts, counsel for Sophia Tenorio and the estate of Pedro Tenorio, said yesterday that it is his understanding that Hotel Riviera is now abandoned.

“But hopefully, a new tenant will be found soon,” Dotts said.

Govendo terminated the ground leases for a lot containing 3,411 square meters, lot containing 236 square meters, and another lot containing 10,000 square meters.

According to court records, Pedro P. Tenorio and Chang Shin Resort Saipan entered into a ground lease on Aug. 2, 1993, on some of the affected lots, with Chang Shin agreeing to pay a monthly rent in the amount of $1,500, which is supposed to increase by 10% every five years.

Sophia P. Tenorio and Chang Shin Resort Saipan Corp. entered into a ground lease on the same date for the 10,000 square meters lot. The company agreed to pay a monthly rent of $4,000, subject to a 10% increase every five years.

Chang Shin stopped paying rent in May 2018.

Sophia Tenorio and the estate of Pedro Tenorio sent a notice of default to Chang Shin on March 15, 2019, but the company did not respond. The plaintiffs filed the lawsuit on May 29, 2019, but no answer was filed.

Default was entered by the court’s clerk on July 29, 2019.

Govendo heard the plaintiffs’ motion for default judgment last Monday. At the time of the hearing, Chang Shin was in default for $144,972.

At the hearing, Dotts appeared as counsel for the plaintiffs. No one appeared for Chang Shin.

Peter Michael Tenorio, the son of Sophia and Pedro Tenorio, testified.

As for the other half of the lands where the hotel is located, Superior Court Associate Judge Joseph N. Camacho terminated the 55-year ground lease last March. The hotel owner, Globuil Resort Saipan, owed $176,802 in rent and had not maintained the property since 2012.

PRC LLC holds the fee simple and underlying lease for approximately one-half of the property. The lease ends on Dec. 29, 2043. The Tenorio family holds the other half of the land where the hotel buildings sit.

PRC LLC’s sole member is Allen Perez. Changsin Resort Saipan, the former owner of the hotel, changed its corporate name to Globuil Resort Saipan prior to the trial.

The trial was held from March 12 to 15, 2018. Robert T. Torres served as counsel for PRC, which filed the lawsuit in 2012 for breach of contract and other claims.

Globuil Resort Saipan, formerly known as Chang Shin Resort, was represented by Mark Scoggins.

Camacho ruled that PRC, which leased the land to Globuil, is entitled to recover the land.

Camacho said PRC did not lease the hotel to Globui, therefore, if PRC chooses to remove the hotel, fixtures, etc. then PRC is entitled to costs of removing the hotel from the land.

Camacho said if PRC does not initiate removal of the hotel within a year of the March 2019 order, then PRC receives and accepts the property “as is.”

The judge said he made this decision as there was nothing in the ground lease that required Globuil to give back any developed structure such as a fully functional multi-million dollar hotel on the property to PRC at the end of the lease.