IPI: Invested $1B, paid govt $300M, lost $500M-plus

Imperial Pacific International (CNMI) LLC issued yesterday a lengthy statement that responds to some of the issues being raised against it and claims to have invested around $1 billion in the CNMI to date, paid over $300 million in taxes and fees to the government, and cumulatively lost over $500 million.

In the same statement, IPI also said that, by next month, it will pay off the rest of the $18.17 million to the CNMI government that settles the latter’s claim for non-payment of Business Gross Revenue Tax. IPI had reportedly already paid $12.5 million out of the $18.17 million assessed against it.

As for its obligations to local vendors, IPI claims that it has only about $2.8 million in outstanding payments, which will be paid off too by this mid-March.

By then, IPI said it will clear all payment requests from local vendors over 90 days.

With respect to two vendors, Pacific Rim and U.S.A. Fanter, IPI said it will resolve their differences through appropriate legal proceedings.

During Monday’s Senate session, Sen. Paul A. Manglona (Ind-Rota) stated, among other things, that the CNMI government is willing to impose a 16-hour cut for government employees, yet remains silent about the whereabouts of $40 million that IPI owes the CNMI people.

IPI said that it, too, has implemented work-hour cuts among its employees in response to the rapidly evolving situation regarding the coronavirus outbreak that is affecting the CNMI as well as the rest of the entire world.

IPI said it has faced two devastating natural disasters—Typhoon Soudelor and Super Typhoon Yutu—with the people of the CNMI, and that they are confident that the Commonwealth will endure and rebound once again. IPI assured that it is “fully committed to the CNMI as always.”

IPI recalled that only seven days after the company first opened its doors in 2015, the CNMI was struck by Soudelor. Immediately after the disaster, IPI “jumped right into recovery work, assisting the community in its efforts to recuperate and return to a life of normalcy.”

After Soudelor came numerous other challenges, which IPI said it also overcame, including a severe shortage of skilled labor, an economic slowdown in China, discontinued flights from Japan, unrest in Hong Kong, unfavorable immigration policy changes, and emerging competing destinations in Asia.

IPI said that in 2018, when Super Typhoon Yutu hit Saipan and Tinian, the company, along with the entire business sector, had to suspend operations temporarily while the tourism industry and the community began recovery effort.

IPI noted that the CNMI experienced a loss of roughly 14% of Chinese arrivals in 2019, exacerbated by unrest in Hong Kong and trade tensions between the U.S. and China.

“Today, the new coronavirus outbreak is impacting the world, the CNMI tourism industry, and our community at a speed which has already outpaced the SARS epidemic of 2003,” IPI said.

It said the impact to travel demands throughout Asia began weeks ago and, although the company is faced with the difficult decision to mitigate these challenges, it still “holds true to the CNMI and its people.”

IPI pointed out that, although it has been with the CNMI for a little less than six years, the company has shared the same adversities that all other businesses have faced in this period.

“Our company has struggled, our employees have struggled, and our ability to create a steady stream of income has suffered,” IPI said.

Throughout all of these unexpected adversities, IPI said the company has done its best to honor the commitments that it made to the CNMI back in 2015.

Since the award of the casino license, IPI claimed it has created thousands of jobs and generated countless business opportunities for hundreds of local businesses. IPI said it would like to address the losses it has incurred and the tax refunds associated with their agreement with the CNMI.

IPI said it is the company’s understanding that it overpaid taxes by over $40 million, which will result as a refund. Nonetheless, IPI said, with the realization and announcement of the government’s budget shortfall, the company proceeded with the settlement on Business Gross Revenue Tax payments.

On its obligations to vendors, IPI called on all its local vendors to collaborate on verification and audit of products and services, and help the company to achieve its goal on payment clearances.

IPI said that, with the relative size of its business, it is exceptional to have no payment requests outstanding over 90 days and that the company will work to accomplish this.

IPI said one area that it has been very proud of is its community work and the projects it has accomplished for the benefit of the CNMI.

IPI said it established the Community Benefit Fund in 2018 ahead of the original timeline, with the expectation that it will be granted the public land needed to start the next phase of their project plan.

IPI said Yutu and the coronavirus outbreak have drastically changed the business conditions and outlook, but the company is still “fully committed to finishing the development project.”

However, IPI said it requires that IPI obtain the land that can take up a large amount of investment.

“As an investor in our island’s future, IPI has undertaken unprecedented endeavors and has made tremendous contributions to the CNMI given the repeated adversities we all have faced,” IPI said.

IPI vowed it will continue this hard work and fulfill its commitments.

“IPI would like to thank everybody for their understanding and support and IPI appreciates the sacrifices made by its employees and their families. IPI asks for your patience and continued support during this time of hardship,” IPI said.