MRC PRESIDENT SAYS: Marina hearing a ‘kangaroo court’

Emotions ran high as the Senate Committee on Resources, Economic, Development and Programs began its oversight investigation yesterday into the operations of the financially-troubled Outer Cove Marina.

Boat owners and tour operators complaining of high fees and unsafe structures accused the government of failing to resolve the problems for the last three years, which they claimed have forced some of the businesses to close down.

Anthony Pellegrino, president of Marine Revitalization Corp. which operates the marina and has been at the center of the squabble, described the hearing at one point as a “kangaroo court,” referring to term of biased judgment even before the trial begins.

“I’ve lived this project for seven years. I’ve explained it for three years. . . I feel that this oversight hearing is nothing but a kangaroo court,” he told the committee.

The hearing, packed with boat owners, tour operators and their supporters, took the whole day with officials of government agencies involved in the issue recounting the lease agreement forged between the CNMI and the MRC.

The non-profit corporation entered into an agreement with the Department of Lands and Natural Resources during the previous administration and the U.S. National Parks Service to build and operate the marina where it was granted a 15-year lease on some 16,394 square meters of submerged land.

Although initial estimated costs of the project were pegged at $1.2 million, the actual costs reached $3.6 million which MRC is now trying to recover through rate increases, such as passenger departure and berthing fees.

Boat owners and tour operators have opposed the hikes, and have appealed to the Legislature and the administration since early 1999 to address their concerns that include safety of the marina.

They told the Senate panel that the oversight was long overdue, asking the government to immediately come up with a solution to the controversy.

Out of business

Ed Comfort, owner of Abracadabra, a diving tour business, disclosed that his business has suffered tremendous financial loss and his boats sustained damages “because of the confusion and the inability of the people to protect us whom we are trying to help.”

Rexford Kosack, lawyer for three of the big tour operators, stressed that boat owners should not be forced to pay for the huge costs incurred in building the marina, noting that the Legislature promised a very good deal when the project began.

“This hearing is very important to stop [the rate increases]. How many will be out of business,” he asked during the oversight. “A person at fault should absorb the loss. MRC should absorb the $2.4 million loss.”

Mr. Pellegrino, however, pointed to the terms of the lease that permit him to impose rate increases despite objection by the DLNR which insisted on giving notice first on any hike.

“I have lost $685,000 in arrears because DLNR did not impose regulations. Those emergency regulations were a sham, a farce,” he said.
Boat owners are “crying poverty. My business is down fifty percent to sixty percent, I’m an idiot,” added Mr. Pellegrino.

Public Auditor Leo L. LaMotte, who formally presented OPA’s report citing the lease agreement as flawed, explained that the audit could not provide specific amount on rate increases due to uncertainties, like the number of boats using Outer Cove.

DLNR Sec. Joaquin A. Tenorio sent his representatives to the hearing, who said that issues surrounding the marina, such as other agreements on fees, could only be resolved with all the parties sitting together in a meeting.

Senate Floor Leader Pete P. Reyes, who chairs REDP, said he is hopeful of reaching a settlement, adding “we need to get to the bottom who is responsible for this.”

Sen. Ramon S. Guerrero expressed sorry for the boat owners and for Mr. Pellegrino for facing this dilemma, but said “we have to be all fair.”

The hearing is expected to resume today at 9:30 a.m. at the Senate chamber in Capitol Hill.