Legislature steps into Outer Cove Marina controversy

A joint public hearing of the House of Representatives and the Senate may be conducted soon to finally settle the controversy surrounding the construction and use of the Outer Cove Marina.

Senate Floor Leader Pete Reyes said legislators should also begin exploring the possibility of transferring the management and ownership of the Outer Cove Marina to the government.

The Department of Lands and Natural Resources held a meeting last Oct. 25 with boat owners in a move to hammer out an acceptable departure passenger fee.

However, boat owners who attended the meeting maintain that a $4 departure passenger fee is still unacceptable.

Senator Ramon Guerrero questioned why the secretary of DLNR, Marine Revitalization Corp. president Anthony Pellegrino and an official of the U.S. National Park Service were not there during the meeting.

“These are the people who should be in the meeting to answer questions so that we can resolve this once and for all. We want to know what factors led to the increase in the construction cost to merit the payment of a certain amount of passenger fee,” he said.

Michael Stiefel, general manager of Saipan Sunset Cruise, has expressed disappointment over the delay in resolving the concerns raised by boat owners in connection with the use of the marina. “There has been so many meetings like these and things are still left not answered or even half resolved,” he said.

Boat owners continue to refuse the transfer to the Outer Cove Marina citing unsafe conditions at the berthing area. According to Mac Chargualaf, president of JM & Associates, some boat owners would rather use an undeveloped seaplane ramp than the Outer Cove Marina because it is a lot safer to load passengers there.

Marianas Visitors Authority Board Chair Dave M. Sablan recommended that it is time for the government to step in and takeover the project. “We have to know to what extent was the government involved in the change order? This has to be sorted out to determine how much should it reimburse Mr. Pellegrino,” he said.

Mr. Sablan said the debt incurred in constructing the marina should not be used as a basis in assessing the amount of fee that must be charged but the life span of the project.

DLNR was hoping to resolve the controversial issue after it received the results of a study conducted by J Scott Magliari & Company, an independent certified public accountant firm hired to determine the necessary average departure fee per passenger that will pay accrued liabilities, loan obligations and costs of operations from Sept. 1, 1999 to Oct. 31, 2010.

Since the marina opened in November 1998, boat owners have been paying different rates. Currently, boats being berthed at the marina are either paying $4 or $2.25 departure fee per passenger. The Revised Rules and Regulations of DLNR authorized a departure fee of $4 per passenger.

However, the study revealed that boat owners must pay over $5 so that the Marine Revitalization Corp., the firm that built the marina, can survive the cost of operation. MRC President Anthony Pellegrino has told DLNR that he is not interested in charging more than $4 due to the decline in the tourism economy.

The marina was built by the Marine Revitalization Corp., a non-profit corporation which was granted a 15-year lease by DLNR under Public Law 9-46 on some 16,394 square meters of submerged land.

A report made by the Office of the Public Auditor in May 1999 noted that MRC management failed to prepare a more accurate study and projection of the construction cost thus, the construction cost has ballooned from the original $1.2 million to $2.4 million.

MRC has been having difficulty in meeting operation costs and long-term debt obligations primarily because some boat owners have refused to move their vessels to the marina or to pay the $4 departure fee as well as construction costs in excess of costs budgeted.

About one-half of the 45 boat slips available are occupied by commercial vessels while three are for personal use. Total monthly revenue generated by docking fees is $5,520 as of August 1999.