WITHOUT LEASE EXTENSION Rota Resort could lose $100 M

If the government fails to grant a 15-year land lease extension, the Rota Resort and Country Club would lose more than $100 million in investments that could threaten the future of tourism business on the island.

This was the contention of the resort’s owner SNM Corporation in its fight to win additional 15 years on the lease agreement it forged with the CNMI government in 1989.

The current 25-year lease has 17 more years to go before it expires, but the resort has asked the Legislature to provide them extension — a request that has come under close scrutiny after the Division of Public Lands stepped in to question the move.

But the Japanese-owned resort has appealed to legislators and public lands officials to provide the extension, saying it has been a strong partner in promoting Rota as a tourist destination.

“Ever since SNM began its investments on Rota, we have been unconditionally committed to the development of a good, economically feasible and overall sustainable facility to enhance tourism (on) Rota,” said Shigeru Fukuzawa, owner’s representative, in a letter to members of the Legislature.

“Looking into the future we are still committed to ensuring that SNM investment continues to be a supporting factor in not only the tourism industry, but also the overall betterment and economic growth of Rota,” he added.

According to the company executive, SNM has infused over $100 million into the local economy in developing the golf resort which has become a major tourist attraction on Rota.

Fukuzawa claimed they have also built a $2 million public access road on the island, a $750,000 waterline and a $3.25 million elementary school during the past few years.

The resort has also assisted the local government in other infrastructure projects and community events as well as supported the Marianas Visitors Authority during tourism events on Rota with free rooms and catering to its guests.

“This major investment and support of the Rota community has been made with the understanding that SNM Corporation would enjoy a solid, fair, long-term relationship with the CNMI,” Fukuzawa explained, “one that would be no less than 40 years.”

While the Legislature, which under law must vote on government land lease extension, has been poised to grant the request at the outset, members have balked at the last minute after the DPL cautioned them against the move.

Apparently, public lands officials have asked deferment in view of failure by the resort to live up to the terms of the initial deal, including payment of the lease and development plans which SNM has committed to undertake within certain period.

Both the House Natural Resources Committee and the Senate Committee on Resources, Economic Development and Programs are currently reviewing the agreement, asking the resort and DPL to resolve their differences before they decide on the extension.

Maintaining the resort would not throw away its multimillion investments, Fukuzawa urged that the request be granted immediately to allow the financially-troubled company to loan money to keep it operational.

“With an investment of roughly $80 million and with operating subsidies of up to $20 million, it is clearly in our best interest to promote Rota and to make every effort to improve not only our own situation but also the overall economic situation of the island by attracting other companies to invest on Rota,” he said.