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CDA: Lao Lao is ‘agreeable’ to suspension of QC
The Commonwealth Development Authority’s planned suspension of Lao Lao Bay Golf & Resort’s qualifying certificate was found “agreeable,” according to CDA executive director Manuel Sablan.
Sablan said it was “indicated to us they were agreeable to suspending [the QC] until a certain period in the future.”
The resort has “agreed to these modifications” he told Saipan Tribune.
The recommended suspension of the certificate now sits with Gov. Eloy S. Inos, after the CDA board adopted a resolution formally stating their position.
Per the certificate’s terms, Lao Lao Resort has never met the minimum annual public benefit contribution requirements of $100,000 in 2010 until today.
CDA recommends to Inos two specific actions: the suspension of the resort company’s qualifying certificate from its effective date in 2008 through December 2017 that would result in the company “not qualifying for any tax relief under the certificate during the suspension period,” and a reduction of their benefit cap from $20 million to $10 million.
The executive director said the resort was caught in a situation were they were not financially able to meet the QC terms. But he also added that there is this “confusion out there that [the QC] program is an automatic giveaway.’
A QC “doesn’t mean you atomically get that relief,” he said. “The key there is performance. Under this program, you have to deliver the investment within a specified time.”
‘You have to meet that minimum threshold. If you don’t, you will be in noncompliance forever. You will never get a certificate of compliance” for a tax year showing the amount your company is entitled to, he said.
In the resort’s case, Sablan said they have deployed their $42-million investment per the QC. “The deployment of the investment is already there,” he said, adding that this was a case where a company made an investment “that could otherwise go to Guam” or elsewhere.
