COP owner found in breach of lease

Suwaso Corp., the owner of Coral Ocean Point Resort Club, breached its lease agreement for the COP property at Agingan Point, according to the Department of Public Lands.

Acting DPL secretary Pedro I. Itibus cited at least three lease conditions that Suwaso allegedly failed to address.

In a notice sent to Suwaso chair Vincent Torres, Itibus gave the company 30 days from May 1, 2012, to address the alleged deficiencies. If Suwaso fails to resolve these deficiencies within 30 days, Itibus said that DPL will terminate the lease agreement.

Saipan Tribune tried to obtain comments from Torres yesterday but he had yet to reply as of press time.

The first breach is Suwaso’s alleged failure to submit adequate construction plans by the deadline. Itibus said that Suwaso was given 180 days from Aug. 11, 2011, to “submit the construction, expansion, and renovation plans and specifications for…its proposed improvements to the premises, along with a project schedule.”

“Although Suwaso has submitted construction plans, including maps, for a conference room and additional bungalow units, Suwaso has not submitted a construction schedule for either phase,” Itibus said.

Suwaso must submit the construction schedule and properly identify Phase 1 and Phase 2 in its plans, he said.

The second breach, Itibus said, is Suwaso’s failure to secure and submit the necessary permits within the allotted time. DPL, he said, has already granted Suwaso several extensions, and a further 90-day extension is unwarranted.

The third breach, Itibus said, is Suwaso’s failure to submit enough evidence of its financing sources to DPL. According to one of the conditions of the lease extension agreement, “the document listing the sources of financing must be drafted with sufficient specificity to be verifiable and acceptable to the DPL.”

Itibus noted that many of the documents submitted to DPL as evidence of funding were in Japanese and are not “verifiable and acceptable to DPL.”

Torres already issued a notice of release to about 80 employees on May 1, 2012. In the notice, Torres said they told employees a couple of weeks ago that they will be shutting down the hotel operation and some of the restaurants on May 13, 2012, to begin the renovation plan for about eight to 12 months.

“This significantly reduces the workload and or removes your job position. Accordingly, it is with much regret to inform you that you will be released from your employment from Suwaso 30 days from the date of this letter,” Torres said.

He said that once they reopen the hotel after renovation, the employees are welcome to work with them again.

“We have a very good working relationship with you now, and we would like to maintain and continue such relationship after you leave us up until you come back and work with us again,” Torres told the employees.

He said the company will pay the employees’ salaries for more than two weeks after May 13 without requiring them to report for work.

Torres urged employees to use their free time to look for another job while still being paid by Suwaso. “If you applied for CW-1 petition, Suwaso will continue to work and assist you if you need any help or assistance,” Torres said.

“It is my sincerest heartfelt apology for this decision, but please understand that this business decision includes the safety of our employees as well as customers,” he added.

Last month, Torres told Saipan Tribune that COP is shutting down its hotel and room operations beginning May 13, Sunday, to give way to its $20-million renovation project. Torres said they will begin the renovation and construction plan as soon as they obtain the required government permits.

“However, its golf course and one of its restaurants will remain open,” Torres said.

The current Suwaso owners had promised to settle the previous owners’ debts to the CNMI government of almost $1 million, and with other CNMI private and public agencies using an immediate infusion of $7 million.

COP is located on a 735,023 square meter property at Agingan Point, Saipan. Under the law, any lease and extension of lease of public land consisting of more than five hectares requires legislative approval.