‘$60M, business plans are in’

The two investor groups applying for a license to exclusively develop a minimum $2-billion casino resort on Saipan met yesterday’s deadline to submit their business plan and deposit $30 million each in escrow.

In an impromptu news briefing on Capital Hill late yesterday afternoon, press secretary Angel Demapan told reporters that Marianas Stars Entertainment Inc. and Best Sunshine International Ltd. are both still in the running for an exclusive Saipan casino license.

The four-member Lottery Commission, whose meeting has been rescheduled for Thursday afternoon, has until June 19 to decide on the applications.

“Getting the two proposals today is a sign that there is really a great interest to develop this industry here and these two companies competing for this exclusive spot have really taken this risk and putting this money forward as a sign of their commitment,” Demapan said.

The $30 million deposit—representing a two-year license fee for the winning applicant—will be used to restore retirees’ 25-percent pension cut. If the Lottery Commission picks a winning applicant by June 19, then retirees would start getting their deferred pension a short time after that. The applicant who will not be chosen will get back its $30 million.

“On the government side, the good news is, from this sign of commitment [from investors] is also a promising sign for us in our effort to restore the 25-percent reduction for retirees retroactively, and for retirees to start earning a 100 percent moving forward,” the press secretary added.

Counsel Jim Stump received the business plans yesterday, Demapan said.

The applications will be turned over to the Lottery Commission for their review “as to their completeness and evaluation.”

“The Lottery Commission is moving forward in an expeditious manner to provide professional evaluation of the applications and is committed to meeting the statutory requirements of a June 19th date for license award,” the administration said.

Gov. Eloy S. Inos, in a statement, said the Lottery Commission has a “significant task” ahead but they are taking appropriate steps to bring additional resources to their review process.

“This is a significant undertaking and the commission is being careful that they properly evaluate these proposals to ensure that the long-term interest of our people will be properly considered,” the governor said.

Demapan, in responding to media questions, said yesterday afternoon’s Lottery Commission meeting did not have a proper advance public notice, so it would be rescheduled for Thursday afternoon after sufficient public notice is posted.

Moreover, as of yesterday, a casino investigator and a gaming consultant have not been hired to help in the application review process and the drafting of the casino regulations, among other things.

House floor leader Ralph Demapan (Cov-Saipan), main author of the Saipan casino bill, said he’s elated that the two applicants did turn in their business plan and deposited $30 million each in escrow, which he said shows the investor groups’ commitment.

“And it’s a sign of hope for the retirees,” Demapan said.

He reiterated that he’s grateful for his colleagues at the Legislature for passing a major revenue-generating bill—the casino legislation—to help address the government’s funding shortfall for many of its obligations.

“It’s also going to be interesting to know which of the applicants will be granted an exclusive license to operate a casino on Saipan,” the House floor leader added.

Rep. Lorenzo Deleon Guerrero (Ind-Saipan), like Demapan, said he’s glad that both applicants turned in their business plan and deposited the required money. He cited, among other things, a guaranteed restoration of retirees’ 25-percent pension cut.

“Now the Lottery Commission has to do its job to review and evaluate these proposals and choose. In the end, it’s sad that one [applicant] has to go,” he said, referring to the investor group that won’t be selected.

Rep. Roman Benavente (Ind-Saipan) separately said while he’s glad there’s already a guaranteed source of funds to restore one year’s worth of deferred 25 percent pension, he’s concerned about “future pension cuts.”

“Will there really be continuity of the 100 percent pension?” he asked.

For decades, casino gaming has been legal only on Tinian and Rota. But the Senate’s passage in March of a House Saipan casino bill paved the way for legalization of casino gaming on Saipan.

Because of non-disclosure clauses, the government is prohibited from making public details about the applicants as well as their business proposals unless the applicants themselves choose to make them public.

An independent research on the two applicants shows that Marianas Stars Entertainment Inc. is “partly” owned by Mega Stars Overseas Ltd., the new owner of Tinian Dynasty Hotel & Casino. Marianas Stars has been incorporated in the CNMI and is licensed to do business here. Cario Hon, chief executive officer of Mega Stars, earlier said Marianas Stars may issue a statement about their plan at a later time.

Best Sunshine International Ltd., meanwhile, is a wholly-owned subsidiary of Hong Kong-based Best Sunshine International Ltd. listed in the Hong Kong Stock Exchange.

As early as February, First Natural Foods/Best Sunshine already announced it has “been in contacts and discussions with certain parties in relation to several eco-tourism, entertainment and gaming business.” On April 15, First Natural Foods announced a proposal to change its name to “Imperial Pacific International Holdings Ltd.” to provide a better identification for the company as it further diversifies its business including eco-tourism, entertainment, and gaming business.

Best Sunshine has yet to be incorporated in the CNMI and has yet to apply for a CNMI business license. The media saw Best Sunshine’s executive director, identified as Helen Shin, at the governor’s office late yesterday afternoon.