Fitial orders AG, DPL to look into Coral Ocean Point lease

Gov. Benigno R. Fitial has ordered the Department of Public Lands and the Office of the Attorney General to look into Suwaso Corp.’s existing public land lease for Coral Ocean Point Resort Club, now that the April 7 deadline had passed without a business plan required under the approved lease extension.

“I believe in magic but I don’t believe in them,” Fitial told reporters yesterday at the Tan Holdings’ 40th anniversary celebration, when asked whether he believes Suwaso Corp.’s decision to close its hotel operations starting on May 13 was really to give way to a $20-million renovation.

Fitial said even from the start, he had wanted a request for proposal to be put out for the Coral Ocean Point property.

“I have always wanted the Coral Ocean Point [lease] extension to be RFP’d, in other words. Because the previous or the current operator, they have neglected their obligations under the terms and conditions of their lease agreement because they let the place unmaintained and going down to dilapidation stage. And that’s because they don’t have money and I know the reason why they don’t have money but I’m not privy to disclose. But I really wanted the extension be RFP’d so the best operator should take over,” the governor said.

The Legislature approved Suwaso’s lease extension last year.

Prior to the legislative approval, Fitial had wanted lawmakers to hold off on making a decision until further review of the proposal was made. The governor’s plea fell on deaf ears.

“There’s no RFP done because it was extended, and it was extended rather improperly,” Fitial said.

Suwaso’s proposed lease extension, as recommended by DPL under then secretary Oscar M. Babauta, was approved by the Legislature. Fitial recently removed Babauta as DPL secretary.

Fitial said a part of the conditions for the lease extension was submission of a business plan.

“They were given 240 days to come up with a business plan. That was part of the conditions of the extension so the 240 days lapsed already.on April 7,” he said.

When asked whether DPL or the government can still cancel the lease extension, Fitial said this is the reason why he asked DPL and OAG to look into the lease extension conditions and see whether they have been met.

“The existing agreement has terms and conditions so we have to look at the terms and conditions if they are satisfied..Only as of yesterday [Monday], I asked the new acting [DPL] secretary to look into this matter. And I have also asked the attorney general to lend a hand, look at the legal aspect of the extension,” Fitial said.

He said he is not sure whether Suwaso Corp. is current in its lease payments.

Attorney Vincent Torres, chairman of COP owner Suwaso Corp., announced Monday that Coral Ocean Point is shutting down its hotel and room operations beginning May 13, 2012, to give way to a $20-million renovation.

Some Capital Hill officials shared Fitial’s concerns yesterday that Suwaso may not have the financial wherewithal to make a $20 million renovation, and such closure may become permanent.

Coral Ocean Point is located on a 735,023 square meter property at Agingan Point on Saipan.