Lottery Commission, Best Sunshine reach agreement

The chairman of the Commonwealth Lottery Commission announced today that an agreement had been reached between the Lottery Commission and Imperial Pacific International (CNMI) LLC for the issuance of an exclusive casino license on the Island of Saipan.

Under terms of the license agreement, the Licensee must construct the following within eight years:

1. 2,229 hotel guest rooms;

2. 17,000 square meters of total gaming floor area

3. 13,532 square meters of food and beverage outlets (at least 23 outlets);

4. 15,000 square meters of retail space;
5. 600 seat theatre;

6. 9,094 square meters of meeting space including ballroom;

7. wedding chapel;

8. 200 villas;

9. 1,050 square meters of fitness area;

10. $100 million themed entertainment facility; and

11. 1,900 square meters of spa facility,

The Licensee estimates the total cost of these requirements at $3.14 billion dollars.

In speaking to the lengthy negotiations, Chairman Sixto Igisomar stated: “These were complex negotiations as the license is a long-term agreement that will have far-reaching impact on our island community. The negotiations were not simple and there was significant give and take between the parties, but overall, the Commission was pleased with the outcome. I want to personally thank Commission members Finance Secretary Larson, Commissioner Deleon Guerrero, and Acting Attorney General Birnbrich for the time and effort they committed to this process. In order to ensure that the Commonwealth received the most benefit from this agreement, we increased the requirements for development and required an expedited implementation plan.”

Under this expedited implementation plan, the licensee must develop an initial gaming facility consisting of a five-star 225-room hotel within 24 months and then phase one of the required improvements within 36 months.

Under these requirements, the licensee must complete and open for operations an integrated resort consisting of the following elements:

1. An 800 room four or five star luxury hotel;

2. A $100,000,000 themed entertainment facility with amphitheater;

3. 5,372 square meters of food and beverage outlets;

4. 2,500 square meters of meeting space (including indoor seating space for 600 persons);

5. 5,000 square meters of retail shops;

6. wedding chapel;

7. 500 square meter spa/fitness area;

8. 10,000 square meters of gaming area (which includes back-of-house areas); and

9. Associated parking, site improvements, landscaping, furnishings, fixtures, utilities and infrastructure.

Chairman Igisomar explained: “The requirement for construction of an “integrated resort” was modeled after large casino developments such as the Venetian Casino in Las Vegas and Resorts World Sentosa in Singapore. This concept brings together shopping, gaming, hotel accommodations, housing development, meeting facilities, wedding chapel, spa facilities, restaurants, and family entertainment in an integrated development. Critical to this approach is a license requirement for construction of a $100 million entertainment attraction that is a central focus of the resort. Preliminary discussions on the type of themed entertainment include water attractions and theatrical productions. By integrating these different elements you have much more than just a casino, and instead have a multidimensional project. The license agreement includes quality standards for all rooms, guest services, and shopping.”

Speaking to the legal issue involved, Acting Attorney General Birnbrich stated: “The license agreement is complex. The agreement had to incorporate concepts of licensing, contracts, development requirements, statutory authority, and the dual authority of the Lottery Commission and yet to be established Casino Commission. The combination of these elements resulted in a lengthy agreement. We were careful to separate development requirements which will be under the authority of the Executive Branch and oversight of gaming which will be under the authority of the Casino Commission. These two agencies have coordinated authority for license oversight and enforcement either of which can suspend or revoke the license for a material breach in conformity with the requirements of the Commonwealth Administrative Procedure Act.”

Department of Public Safety Commissioner James Deleon Guerrero wanted to assure the public that the foremost issue being considered by the Commission was to protect the public interest.

“As DPS Commissioner, I wanted to ensure that the selection process met high standards of transparency and integrity. We approached the entire process of negotiating a license agreement that would be in the best interest of the people. The Northern Mariana Islands are my home and I realize that the decisions we would be making would have long term effects on our families and I want to protect and represent these interests.”

Gov. Eloy S. Inos expressed relief that the negotiations were finally concluded: “This agreement will have a significant impact on our entire community. It will provide the funding necessary to pay interest to employees who withdrew their pension contributions and restore the twenty-five percent reduction to retirees which was one of my primary objectives. However, just as important is that it provides a long-term boost to our economy that will result in the increase in wages, rental rates, property values, and use of local goods and services.

“Another important issue that I want to stress is that it provides an economic future for the people of the Commonwealth. This development will ensure the provision of good paying jobs and provide an incentive for families to remain in the Commonwealth. These last few years, I have witnessed the dispersal of many families who left the islands because of lack of opportunities and I am hoping that this will reverse that trend and provide an incentive to those who left to return. One of the key elements of our culture is our strong family bonds and we need to preserve and protect this element.

“Although I am happy with the signing of the license agreement, we need to be cautious in its implementation so as to protect our environment and island culture. I am happy that the Lottery Commission specifically identified this issue as an important duty of the licensee. We must work together with the Bureau of Environmental and Coastal Quality and the Zoning Office to ensure that the development balances environment issues with the need for economic development. These two elements can be in harmony, but it takes careful consideration by both the developer and government agencies.”

In speaking to the issue of payment of retirees, Finance Secretary Larrisa Larson stated: “We are moving forward in an expeditious manner to transfer the $30 million dollar Licensee deposit, but this will take several steps. Additionally, once we receive the funds we will begin the processing of payments. This is a complex process that must be done carefully, so we ask for the public’s patience in this matter but rest assured we recognize the need to move quickly.” (Office of the Governor)