Businessmen seek longer land lease term

With the fate of Rota Resort and Country Club hanging on the balance as the extension of its land lease agreement remains uncertain, members of the private sector yesterday batted for longer leases for public lands so that businessmen would have more time to recover their huge investments in the CNMI.

The Legislature is set to resolve the problem facing Japanese-owned Rota Resort which faces closure unless the land lease agreement is not extended for another 15 years. Owners of the resort have expressed hope that they will get the needed number of years to continue operations.

According to Anthony Pellegrino, president of Pelley Enterprises Inc., the government should consider increasing the land lease to 55 years. At present, government land lease is 25 years with an optional 15 years extension.

Pellegrino said the 25 years land lease is too short to give to businessmen who have invested $250 million on the island. “It will be very hard for the investor to go to the banks for a loan because financial institutions do not like short-term businesses,” he said

Pellegrino noted that some countries even give 90 to 100-year leases to investors since their government recognizes the difficulty of immediately recovering the huge amount of money they have invested.

“We should value the investors and help them prosper. After all, if they prosper, the will benefit from it. It is a win win situation for everybody,” he said.

Toshiro Arai, general manager of La Fiesta Shopping Mall, said giving longer leases is one way of making the CNMI investor-friendly. He said this would at least make investors more confident in carrying out expansion projects.

With at least one to two years of the lease spent in complying with the requirements plus additional three years in construction, the investor’s time is already wasted, said Min Hi Won, general manager, Marianas Resort.

“What will really attract investors to come here, if you compare the CNMI to other places, the reasons are very few,” he said.

But the government can always simplify the processing of permits and other documents needed in getting any project moving, said Carmen Gaskins, resident manager of Hansae (Saipan) Group Inc.

In changing the government’s land lease policy, Gaskins believes that the amount and type of investment must be taken into consideration. “I think these factors would help determine the number of years which the government should give to the investors whether it is 25 or 50 years,” she said. She is not infavor of giving all businesses the same number of land lease term because it is also the government’s way of protecting its interest against speculators.

“I think it is unpardonable for the government to enter a contract with an investors if they cannot realize their investment during the time that they were given the time to do so,” said Gaskins. She added that investors must also do their part by making sure that their projections are correct taking into consideration even the unforseen events.