CNMI urged: Lengthen lease period to99 years

The Northern Marianas may have to consider extending the land lease terms from the current 55 year limitation to 75 or 99 years to lure huge investments on the island.

While the present land lease agreement has not deterred investors from Japan and Korea, it has impeded the development of Chinese and U.S. businesses, said David Burger, director of Burger & Comer, a full-service accounting firm.

Burger cited the Outrigger hotels which have expanded in Hawaii, Majuro, Belau and soon on Guam but has not considered Saipan. When he met with one of the company’s development staff in 1991, Burger said the 55 year land lease has prevented Outrigger from investing in the CNMI.

“They may change their minds, but we must acknowledge the fact that the 55 year lease limitation is a foreign concept to U.S. investors. If we decide that we want to attract major U.S. investments, we cannot ignore this factor,” he said.

Investors who are not able to obtain private lands suitable for their project may apply to the CNMI government for the opportunity to lease public lands for a minimum guaranteed rent with a provision that a percentage of the revenues generated from the project will be paid as rent, if they are greater than the guaranteed minimum rent.

At the end of the public land leases, the CNMI government will either take control of the property or enter into a new lease, providing additional revenue to island.

Among the hotel resort properties that are partly located on public lands are Hyatt Regency Saipan, Coral Ocean Point and Laolao Bay golf courses.

According to Burger, there are approximately 5,790 acres of available public land on Saipan, or about 19 percent of the land mass. The island of Tinian has over 9,000 areas of public land available, and Rota has 8,258 acres available. But there is no exact number on how much of this public land is suitable for commercial development.

Burger noted that the CNMI needs a reasonable zoning law to attract investors. Any developer can put any kind of project they want in any location they want without a zoning law. For example, the establishment of a garment factory in a quiet neighborhood was prevented due to protest made by residents who later on convinced the
Coastal Resources Management and not because of a zoning law.

A zoning law was passed in 1992 but the implementation was suspended after 18 months after developers viewed it as too strict.