‘Tinian casino investor lured by QC’

The Commonwealth’s qualifying certificate program is one of the main reasons the new Tinian casino investor decided to come to the CNMI, according to the company’s resident agent.

Philip Long, a Tinian resident and local agent for Bridge Investment Group, said the company seeking to build a new hotel and casino on Tinian would apply for tax incentives under the CNMI’s qualifying certificate program in due time.

“We’re not at that stage yet (where we can submit an application for a QC). But most likely, we’re going to be applying since it was a major interest among the investors—that the CNMI was offering tax incentives if they would bring so much money out here,” Long said.

In the meantime, he added, Bridge Investment is maintaining a wait-and-see attitude toward the QC program. Some of the considerations are the change in administration and possible changes to the current QC law.

“Obviously, we would be looking very closely at [the QC program]. We don’t want to start a process that’s going to be changed mid-stream,” Long said.

According to Long, Bridge Investment intends on applying for tax incentives for the second and third phases of the project.

Bridge Investment has already received a conditional license for the initial stage of the project, which has an estimated worth of $100 million. The first phase consists of a 300-room hotel and a casino.

Long added, however, that there were discussions about expanding the proposed facility. The amenities to be added include a water park and a golf course, he said.

“[A qualifying certificate] is not one of the issues that make this a do-or-die situation. The investors have already made a decision to develop. However, we have funding for the second and third phase. There are some amenities that will be added on to the project if we get a QC. Of course, if we are denied a QC, that would tremendously cut the phase 2 and 3 down. We will just be operating Phase 1, which will be the hotel and casino,” Long said.

The Investment Incentive Act of 2000 encourages economic development in the CNMI by offering tax breaks to investors that engage in or implement a business project or activity.

Eligible businesses under the law may apply and receive a qualifying certificate executed by the governor, as recommended by the Commonwealth Development Authority.

The QC program allows a qualified investor to receive rebates and/or abatements of up to 100 percent for a period of 25 years.

Business activities targeted by the program include franchise restaurants, water parks, aquariums, cultural centers, theme parks, resort hotels and condominiums, golf courses, convention centers, CNMI-based airlines, and manufacturing of high technology products.

Several hotels have applied for tax abatement under the QC program for renovations they have done or are doing on their properties. While some have been declined, other hotels have turned back offers of tax rebates or abatements, purportedly due to the excessive conditions that accompany the investment incentive.

The Strategic Economic Development Council, which initiated the QC program, has now formed a special committee to study why investors could not maximize the benefits of the tax relief program.