Macau investor ups worth of Tinian casino plan to $300M

Macau-based Alter City Group Holdings Ltd. raised its proposed casino resort investment on Tinian from $200 million to $300 million in time for the Department of Public Lands’ submission to the Legislature of a “draft” lease agreement between DPL and Alter City Group involving 152 hectares of public lands.

Any proposed lease of more than 5 hectares of public lands requires the Legislature’s approval.

DPL Public Lands Secretary Pete A. Tenorio submitted to House Speaker Joseph Deleon Guerrero (Ind-Saipan) and Senate President Ralph Torres (R-Saipan) a draft lease agreement with Alter City Group for up to 40 years.

This includes the initial 25-year lease with the option to extend for 15 more years.

The three-phased project includes the construction of 1,000 hotel rooms, water parks, an 18-hole championship golf course, villas, casino facilities and related tourism amenities, to be completed within 12 years.

Alter City Group also still has to apply for a casino license.

DPL expects the Tinian casino project to have a gross revenue of over $1.436 billion in 25 years.

There are two land lease payment category options. One is a guaranteed minimum lease payment of $2.04 million in 25 years. Any 15-year extension will bring in an additional $1.53 million, totaling $3.570 million in 40 years.

The alternative business gross revenue percentage option will rake in over $10 million in 25 years. Adding more than $12.925 million for any 15-year extension will bring the land lease payments to a total of nearly $23 million in 40 years.

Tenorio said once the proposed lease is approved, Alter City Group will pay a security deposit of $300,000.

There will also be an advance payment of $340,000 for the first five years of the lease during planning and construction of phase 1. The advance payment will be paid on the first year of each subsequent five-year period.

Joint public hearing

A joint Senate and House of Representatives committee will hold tonight on Tinian a public hearing on the proposed public land lease.

Sen. Frank Borja (Ind-Tinian) and Rep. Anthony Benavente (Ind-Saipan) said the joint public hearing will be held at 5pm today at the Tinian Superior Court. Borja chairs the Senate Committee on Resources, Economic Development and Programs, while Benavente chairs the House Committee on Natural Resources.

Even prior to today’s joint public hearing, Tinian officials have already notified lawmakers of their support to the proposed land lease between DPL and Alter City Group.

Tinian Mayor Ramon Dela Cruz urged the Legislature, in a Sept. 8 letter, to “quickly approve the lease agreement” between DPL and Alter City Group.

“I expect such a multi-million dollar development to significantly boost Tinian’s local economy, as well as the economy of the entire Northern Marianas, providing additional jobs, tax revenues, and business and consumer spending, among other benefits. I also expect this development to stimulate tourism demand on Tinian and lead to additional flight capacity to Tinian,” the mayor told the Legislature.

Lt. Gov. Jude U. Hofschneider also urges the Legislature to approve the proposed land lease agreement, citing its potential to help boost Tinian and the CNMI’s economy.

The Tinian and Aguiguan Legislative Delegation and the Tinian Municipal Council also separately wrote a letter to DPL’s Tenorio, expressing support to Alter City Group’s proposed land lease on Tinian.

Public contribution

Alter City Group plans to build its casino resort at Puntan Diablo, also known as Nasarino, on Tinian.

It is the same area that was previously leased by Marianas Resort Development Corp., or MRDC, before the latter abandoned the lease. MRDC had planned to build a $300-million Matua Bay Casino Resort on the property, including an 18-hole golf course.

DPL estimates that the direct public contribution includes $5 million “toward improving the airport and ferry services and facilities on Tinian.”

The department also said local residents will have access to resort areas, and there is guaranteed employment of locals, including job training in skills and management pursuant to law. DPL said additional benefits include payment of business taxes and wages.

Who is Alter City Group?

Alter City Group Inc. was incorporated in the CNMI. It is wholly owned by Alter City Group Holdings Ltd. of Macau.

In collaboration with STJ Golden Island Investments LLC, Alter City Group Inc. applied to lease public lands on Tinian.

DPL’s Tenorio said the department reviewed the proposal, and has vetted the developers on numerous occasions, including face-to-face interviews with their corporate officials as well as the principals.

He said they include Alter City Group president and board chair Leong Kian lan, executive vice president Ken Lin, chief executive officer Edvon Sze, and senior vice president for business development Nelson Li.

At present, there is only one casino operating on Tinian and the whole of CNMI, the Tinian Dynasty Hotel & Casino.