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Land lease signed for 300-room hotel in San Antonio
HK-based Honest Profit also turns in $100K security deposit to DPL
Hong Kong-based Honest Profit International Ltd. signed a lease agreement with the Department of Public Lands yesterday for 40,087 square meters of land in San Antonio where it plans to build a $130-million, 300-room hotel.
The lease is for 25 years, with an optional 15-year extension for a total of 40 years.
Department of Public Lands Secretary Pete A. Tenorio prepares to sign yesterday a land lease agreement with Honest Profit International Ltd. represented by its president Sam Chan, right, that will pave the way for the Hong Kong-based firm to build a $130 million, 300-room hotel in San Antonio. Looking on is Gov. Eloy S. Inos, left. (Haidee V. Eugenio)
“This is a first major project [on Saipan] in a long time,” Gov. Eloy S. Inos said at the ceremony.
DPL Secretary Pete A. Tenorio also received from HPIL president Sam Chan a $100,000 check as security deposit—a new requirement among investors eyeing major developments such as hotels and golf courses.
The security deposit would cover for any unpaid land rental should any investor pulls out from their project, given previous experiences wherein investors disappeared after groundbreaking with unpaid land rentals.
The governor and the DPL secretary noted HPIL’s partnership with local contractors, including N15 Architects, the law office of Robert Torres, and a local accounting and finance firm represented at the ceremony by Mike Johnson.
Chan said they would be building a 5-star hotel. HPIL is going beyond the minimum 200-room requirement of DPL’s request for proposal.
This lease agreement is a result of DPL’s first issuance of an RFP for available lands in 2013. The land is located near Pacific Islands Club in San Antonio, the same spot previously leased but was later abandoned by KSA Corp.
DPL said for the first three years, Honest Profit’s rent will be based on the appraised value of the property as of May 2014, which is $1.674 million. The rent is 1 percent of that, or $16,740.
On the fourth year, the rent is at 2 percent of the appraised value or 1 percent of business gross, whichever is greater. The percentage increases every five years up to 3 percent on the last five years of the 25-year period.
The process for issuing out the RFP, reviewing the bids, selecting the winning bidders and negotiating a land lease deal took about a year, Tenorio said.
HPIL’s Chan said the groundbreaking is set for September. The governor said he also looks forward to the ribbon cutting ceremony.
The hotel construction and other improvements, according to DPL, could take 48 months or approximately up to December 2018.
This comes at a time when Saipan needs additional guest rooms to accommodate a growing number of tourists.
Marpi
Meanwhile, as of yesterday, DPL has yet to decide whether to issue another RFP or go to the second and then third best bidder for a public land in Marpi, also for hotel development.
This follows winning bidder Tan Holdings’ May 14 letter to DPL stating that it is withdrawing its interest from leasing almost 10 hectares of public lands in Marpi. It now plans to build a new hotel on private lands instead, also in Marpi.
On June 5, DPL’s Tenorio offered the available Marpi public land to second best bidder E-Land but as of yesterday, the South Korean giant has yet to respond to DPL’s letter. E-Land earlier told DPL that it still needs to talk to its officers in South Korea.
E Land’s Micronesia Resort Inc. owns three hotels on Saipan, including Pacific Islands Club, Coral Ocean Point, and the former The Palms Resort that will reopen under the global Sheraton brand.
Tenorio said the third best bidder for the Marpi public land is Honest Profit International Ltd., which just signed a lease for the San Antonio public land.
He said other options would be to issue another RFP, or keep the Marpi public lands idle for now.
Two investors applying for a license to exclusively develop a minimum $2 billion integrated casino resort on Saipan have been checking out possible locations for their project should they become a casino license holder. Earlier, officials asked them to consider private lands first before setting their sights on public lands.
But with almost 10 hectares of Marpi public lands possibly freed up again, this may be another potential site for a casino.
Another beachfront location eyed is the current site of Hopwood Junior High School, which needs to be relocated at the investor’s expense if it is found as a suitable spot for at least a 2,000-room integrated casino resort.
