Rota Resort gets 15-year lease extension

The Board of Public Lands has agreed to grant a 15-year lease extension to the Rota Resort and Country Club, ending months of dispute over conditions which the tourists’ golf haven has yet to meet as stipulated in the initial contract with the government.

Legislators expressed relief over the agreement intended to help the financially-troubled resort. It was announced during a joint meeting yesterday of the House Natural Resources Committee and the Senate Resources, Economic Development and Programs Committee.

The deal is expected to be approved during a scheduled joint session by the House of Representatives and the Senate on Thursday.

At least two-thirds of the members of the Legislature or 18 out of 27 senators and representatives must vote in favor of the lease extension before the Division of Public Lands can enforce it.

This is the third time the government has provided extension to the initial 25-year lease agreement of the resort, which is owned by Japanese company SNM Corporation.

Unlike the first two attempts, however, the resort this time will not be ordered to pay up front, a condition why the company balked at the initial grant of extension.

But public lands officials and company executives need to iron out kinks in the deal before the Thursday’s session, including settlement of hundreds of thousands of dollars in unpaid rent as well as the 200 rooms SNM was supposed to build under the initial lease agreement.

Jonas Ogren, Rota Resort sales manager, said they are “very, very close” to reaching an agreement with DPL on these issues after nearly three-month deadlock.

“We are very open and we are comfortable with what the Legislature is doing and what they think and feel about our situation,” he said in an interview, “so we feel confident that we will reach an agreement that is acceptable to us.”

DPL Director Bertha C. Leon Guerrero said they would hold discussion again with SNM representatives to work out an agreement on the resort’s debts as well as the 200-room requirement. “Those have yet to be resolved,” she added.

But she disclosed that three present members of the policy-making body have thrown support behind the plan by the Legislature to grant 15 years more to the current lease agreement.

Conditions of the deal: The resort — the only major tourist facility on Rota — has 17 more years under the first deal, and legislators said the extension would only be effective if SNM is not “in default” in meeting some conditions.

These include construction of the 200-room hotel within a certain period of time which will be discussed by the resort and DPL as well as payment of overdue rent.

A separate accord will also be forged between the two parties to absolve SNM of any liability in case the ongoing lawsuit involving a piece of property within the resort has found the government guilty of encroachment.

DPL earlier has come under fire from legislators over apparent stalling by some officials on the resort’s request, but public lands officials have opposed a move to wipe off its debts to the government.

SNM has threatened to shut down its operations without the extension, saying they need it as a guarantee to entice other investors and allow them to borrow money from financial institution in a bid to infuse more funds into the resort.

Based on the financial records of the division, SNM owes $291,000 in unpaid rent and $180,000 in late fees. But the resort claimed they have paid their dues since the agreement was enforced in 1991.

Initially the division had pegged the total debts to more than $700,000, but went down to $471,000 when it excluded lease payments charged between 1989 to 1991 because the agreement had not been implemented at that time.

The lands they are occupying also have been a center of dispute between the government and a local family on charges of encroachment on private property — a matter that DPL should face squarely and must not involve SNM, according to legislators.