Suwaso’s fate now with lawmakers

On the eve of lawmakers’ critical land lease vote, the Department of Public Lands told the Legislature yesterday it supports Suwaso Corp.’s proposal to extend by 15 years its existing 25-year land lease agreement for Coral Ocean Point Golf Resort.

With DPL Secretary Oscar M. Babauta telling Senate President Paul Manglona (Ind-Rota) and House Speaker Eli Cabrera (R-Saipan) of DPL’s support to Suwaso, the decision now rests with lawmakers.

Babauta said that DPL and Suwaso Corp. have already drafted a lease extension agreement, but this may still change within a 15-day comment period ending on Aug. 10.

Both Manglona and Cabrera have already set a joint session at 2pm today to consider Suwaso’s proposed land lease extension.

Babauta, in a phone interview last night, said that Suwaso agreed to DPL’s terms and conditions of the 15-year extension, and that he does not have the authority to ask the Legislature to postpone today’s joint session.

Under the draft agreement, Suwaso would pay an annual minimum rent of $110,000 or 3 percent of gross receipts on the sixth five-year period. The rate changes every five years.

Babauta said another key provision of the draft agreement is for Suwaso to submit to DPL within 240 days of the commencement of the extension agreement evidence of its sources of financing for infrastructure upgrades, including the building of 200 new guestrooms.

Gov. Benigno R. Fitial asked members of the House leadership on Tuesday to hold off action on the lease extension until he meets with Suwaso’s new investors, lawmakers said.

Last year, Fitial said Suwaso’s lease extension won’t be renewed because of the owners’ failure to comply with the terms of the lease agreement.

But the new owners of Suwaso told lawmakers on Wednesday that they would be better than the previous owners.

Press secretary Angel Demapan, when asked for comment yesterday, said the governor only wanted to give Suwaso “due process” by allowing DPL to, among other things, hold a hearing on Suwaso’s proposal.

“Because that hearing has not taken place yet, the governor sees that it’s inappropriate that a decision be made without affording Suwaso due process to go through that hearing…” Demapan said.

Suwaso’s new owners met with lawmakers on Wednesday for a presentation about their acquisition of the corporation and their $22-million plan to revitalize Coral Ocean Point.

Some lawmakers made their support to the proposal known after the presentation.

Rep. Ray Yumul (R-Saipan), who will be among those voting “yes” on the lease extension, said timely action on the proposal will help bring back investor confidence in the CNMI and result in the new owners’ payment of tax arrears of almost $1 million owed by Suwaso’s previous owners. He said if lawmakers are true to their word of being pro-business, they won’t intentionally slow down the process for legitimate investors.

Rep. Stanley Torres (Ind-Saipan) said the Legislature won’t be able to act on the lease extension without receiving a package from DPL on the proposed extension.

The new consortium of investment partners acquired Suwaso Corp. on July 11 from the previous owners composed of Hyakumata Co. Ltd. in Japan and other minority shareholders.

The new investors include Japan-based investor Yusuke Fumoto, CNMI attorney Vincent Torres, and China-based investor Jia Tie Liang who is the major financier of all infrastructure upgrades and improvements to Coral Ocean Point. Jia is the president and chief executive officer of Sheng Jia Heng Xin Investment Co., which is engaged in jade mining operations, real estate, retail, and movie productions.