IPI assures $18.6M license, regulatory fees

Imperial Pacific International (CNMI) LLC has assured the Commonwealth Casino Commission that payroll to IPI employees will be paid on time, reconnection for power and water in its staff housing and at the casino/resort will be paid, and that it will also honor the $15.5 million annual license fee and $3.1 million regulatory fee.

CCC chair Edward C. Deleon Guerrero disclosed IPI’s promises during the CCC board’s monthly meeting at its Springs Plaza office in Gualo Rai last Thursday.

Deleon Guerrero said IPI made the assurances during his and other CCC officials and managers’ meeting last June 2 with IPI officials: chair Cui Li Jie, vice president for Hotel Operations Henan Ma, investor Su Hong Tao, senior vice president of Public Affairs Tao Xing, and general counsel Michael Dotts.

Deleon Guerrero said the annual license fee of $15.5 million is due on Aug. 12, 2020, while regulatory fee of $3.1 million is due on Oct. 1. He said they were told that, according to IPI’s majority shareholder, IPI will pay the license fee and the casino regulatory fee.

Deleon Guerrero said IPI, however, wants to renegotiate the terms of the community benefit fund and that IPI will be submitting its request to the Lottery Commission for amendments to the Casino License Agreement. “They are requesting the CNMI government through the Lottery Commission for amendment to the casino license agreement in reference the community benefit fund,” he said.

Deleon Guerrero said he is concerned that if CCC does not get any funding by Oct. 1, the commission may be forced to furlough just about everybody at CCC.

Deleon Guerrero said what came out at that June 2 meeting was that IPI, through investor Su, who was at the time authorized by Cui to speak on her behalf, told them that IPI will keep the payroll current and will pay all outstanding payroll. He said Su stated that IPI will also clear its outstanding bills with the Commonwealth Utilities Corp. so that IPI staff at the apartment/housing will have their power and water reconnected.

Deleon Guerrero said there was also a discussion regarding the amount owed for public lands. “I believe that the discussion was that that would also be paid, but probably later in the month,” he said.

Deleon Guerrero said he did meet with the Lottery Commission and that he (Deleon Guerrero) was disappointed to hear that the letter that IPI had submitted was undated and that the Lottery Commission was not aware if the signatory of that letter, Xao Ting, was authorized to renegotiate the license agreement.

“There doesn’t to be any authority for the signature of that letter. We left the meeting with the understanding that it would be the chair signing the letter but, unfortunately that did not happen,” Deleon Guerrero said.

During Thursday’s CCC meeting, Xao Ting submitted to the board a copy of IPI’s new proposal to the Lottery Commission.

Deleon Guerrero said he also met, through video conference, with CNMI Department of Labor Secretary Vicky Benavente last June 3 on the topic of Labor’s role in enforcing the casino license agreement. He said he was disappointed to hear from Benavente that Labor has a limited role in reference to IPI’s personnel and labor issues due to Labor regulations that restrict their jurisdiction to organizations or businesses with less than 150 employees.

Deleon Guerrero said CNMI Labor also does not have Occupational Safety and Health Administration authority; only on consultation. “They only respond if the employer invites them. I asked, ‘If the employee invites you, would be able to come down?’ She says no, it has to be the employer,” he said.

He said he was hoping that there will be some kind of understanding or kind of coordination so that when there is a situation like what happened in the last few days (protest and disconnection of power and water supply), that the CNMI government should know who should step forward and help.

“Unfortunately, [CNMI] Labor is under the U.S. Department of Labor. Immigration is under the U.S. federal control again. So is OSHA. So, being frustrated, is really a terrible situation to be placed under,” Deleon Guerrero said.

He said CNMI’s Labor involvement with IPI is through Section 15 of the casino license agreement, which is the labor and the local training and hiring requirement, while IPI labor itself is under federal jurisdiction.

Deleon Guerrero also reported about CCC’s meeting with the Legislature last June 4, during a joint session at the House chamber of the House of Representatives’ Committee on Gaming and the Senate Committee on Cannabis & Gaming. The topics were IPI’s financial status, payroll issues, utilities at the staff housing, and other issues. He said informed the lawmakers based on what IPI had informed him a day before that meeting that these matters will be taken cared of.

“Again, this is very disappointing because, as of [last Wednesday], I’m hearing they were not,” he said.

The chair also disclosed that he met with Department of Public Work Building Code staff last June 15 on the topic of what DPW can do relating to the casino license agreement and where IPI is in reference to compliance with the building code and where IPI is in reference to the 2% infrastructure impact fee.

Deleon Guerrero said that, according to DPW’s technical staff at the Building Code Section, there are numerous notices of violations that they issued to IPI, but that their regulations does not give them the authority to stop anything. “If you correct it, it can continue. I asked, ‘What kind of sanction?’ They said at that time they do not have any, they just refer the matter to the attorney general for action,” he said.

Deleon Guerrero said he has not seen specific sanctions in reference to building code violations.

He said DPW adopted the 2018 International Building Code and that new regulations is currently in the Commonwealth Register for public comments, which will strengthen DPW’s enforcement authority.

Deleon Guerrero also said that the Governor’s COVID-19 emergency directive 2020 last June 15 that ordered the closure of all businesses engaged in gaming, including casino, video poker establishments and e-gaming facilities still stands.

“We call it a technical shutdown based on the emergency. That remains, unless the directive is amended,” he added.