DFS plans 350-room resort in Garapan

DFS Saipan Limited division president Marian Aldan-Pierce asked the Department of Public Lands last week to lease them 21,380 square meters of public lands adjacent to their lots in Garapan so they may build a 350-room luxury resort hotel near the former Samoan housing. DPL is now weighing a sole-source land lease agreement instead of issuing a request for proposals to maximize both investor and public benefits.

The formal letter to DPL comes a few weeks after Gov. Eloy S. Inos initially confirmed DFS’ plan.

DPL Secretary Pete A. Tenorio, in an interview on Capital Hill yesterday, said it appears it would be practical for DPL to “consider seriously” DFS’ request.

That’s because DFS has properties that would not otherwise be used to their maximum potential and any public land lessee other than DFS would be landlocked in the area, he said.

“…if [DFS] get[s] the lease, for example, they can use their property together with the public property to make it a more meaningful development,” Tenorio said, after he and other DPL officials appeared before the House Ways and Means Committee for a hearing on the governor’s proposed $3.399- million budget for DPL in fiscal year 2015.

There are six public lots that DFS wants to lease, ranging from 834 square meters to 15,187 square meters, totaling 21,380 square meters.

If approved by DPL, this would be in addition to the over 20,000 square meters of property that DFS and its sister-companies now control, located to the north and west of the former Samoan housing.

“We are aware that Public Lands often chooses to issue a request for proposals for its large lots. But we believe that it is not appropriate in this case for two reasons,” Aldan-Pierce told Tenorio in a May 6 letter, a copy of which was obtained yesterday.

Aldan-Pierce said the former Samoan housing site “is not as large as the other public land sites where the RFP process has been used.”

The site, she said, is only 2 hectares, “not large enough for a resort hotel.”

“Second, any bidder other than DFS would essentially be landlocked at this site because the DFS companies control all the desirable private lots to the north and west of the public lots,” Aldan-Pierce told Tenorio.

Aldan-Pierce said every private beach is held by DFS, as well as all of the adjacent property to the north.

“Furthermore, any developer of the public land would find that it is hemmed in by easements of access to our lots which would have to remain open. In short, while it would not be impossible to build a hotel on a 2-hectare lot surrounded by easements, it would be impossible to build a high-end luxury resort there. If public lands are combined with the DFS lands, the easements would disappear and the hotel site would be over 4 hectares in size,” the DFS division president said.

Department of Public Lands-Tinian resident director Ray Cing, right, gestures as he confers with DPL Secretary Pete A. Tenorio, left, while Rep. Tony Sablan (Ind-Saipan), center, looks on after the House Ways and Means Committee held a hearing yesterday on the governor’s proposed $3.399 million budget for DPL in fiscal year 2015. (Haidee V. Eugenio)

“Instead, it is sufficient to give public notice of any proposed lease so that any interested person may submit an alternative proposal,” she said.

She added that DFS is prepared to submit a proposed lease to DPL and then negotiate its terms.

Tenorio, in a response letter dated May 9, asked DFS to submit a detailed development plan, business plan, time schedule for the commencement, and completion of the resort project.

“Upon your submission of the requested information, my office will initiate a serious review of your proposal,” Tenorio told Aldan-Pierce in a letter.

The DPL secretary noted, however, that there have been a number of verbal inquiries by others to lease the public land that DFS is requesting.

Tenorio said in the event that there are other interests submitted in writing, “DPL will proceed with the same approach as being asked of DFS.”

“Absent any other unsolicited request for a letter of interest on the property by others, DPL will be in a more firm position to initiate discussion aimed at entering into a sole-sourced lease agreement upon completion of DPL’s review of your development plan and other DPL’s requested information,” he said.

38 years in CNMI

DFS Galleria in Garapan is the biggest and most popular luxury brand retailer in the CNMI.

Aldan-Pierce said DFS Saipan has been in business in the CNMI for 38 years and has been a good partner with the community and the government.

This is their first time to request a public land lease.

“We have held onto these properties for many years awaiting the proper time to enter the hospitality market. We believe that time has come and we are optimistic about the CNMI’s future,” the DFS Saipan president said.

A top design firm is now examining the property and is preparing a conceptual plan for the resort layout, she told the DPL secretary.

The governor himself is optimistic about new and expanded investments in the CNMI, citing planned construction of a total of at least 2,600 new hotel rooms—two separate hotels with 300 rooms each and a casino resort with at least 2,000 rooms.

This is in addition to DFS’ proposed 350-room luxury resort, as well as the reopening of the former The Palms Resort under the global hotel brand Sheraton.

On Tuesday, the governor renewed his request for the U.S. Department of Labor secretary to extend beyond Dec. 31, 2014, the CW program to allow the CNMI continued access to some 10,000 foreign workers as the U.S. labor pool is still not enough and prepared at a time when major constructions are underway.

DPL budget

In other news, DPL presented and answered questions from the House Ways and Means Committee yesterday morning about the governor’s $3.399 million proposed 2015 budget for DPL.

This is some $2 million less than DPL’s 2014 budget of $5.26 million.

That’s because in 2014, the figure included the $2 million for homestead projects on Saipan, Tinian, and Rota. The $2 million remains with DPL and is no longer included in the operational budget submission to the Legislature.

Tenorio told lawmakers that DPL is “okay” with the governor’s proposed budget for DPL.

Rep. Tony Sablan (Ind-Saipan), Ways and Means Committee chair, said this message was clear at the budget hearing so the committee is not expected to recommend changes to DPL’s budget as requested by the governor.

The Ways and Means Committee, however, asked DPL to provide additional information, including revenue from the Managaha landing fee. Rep. Ralph Yumul (Ind-Saipan) asked for the Managaha landing fees collection during the budget hearing.