Mariana Resort presses lease renewal

Mariana Resort & Spa is pursuing at least a $30-million added investment for a 25-year renewal of its public land lease that’s expiring in April 2018 but the need for huge tracts of lands for a $3.14-billion integrated casino resort on Saipan could be a factor whether the lease extension plan would pan out.

Gloria Cavanagh, general manager for Mariana Resort, said yesterday they have been waiting for the Department of Public Land’s decision on their submitted draft proposal to renew the lease.

DPL Secretary Pete A. Tenorio separately said yesterday “no decision has been made to refer any new lease for Mariana Resort to the Legislature, nor an offer made yet to Best Sunshine for the land at Mariana Resort.”

“Everything is still a work in progress,” Tenorio said.

Any lease of public land consisting of more than 5 hectares requires the Legislature’s approval.

Terence Tay, chief operating officer for Saipan casino developer Best Sunshine International Ltd., said Mariana Resort was among the public land lessees and landowners they met with over possible sites for the casino resort.

“Some of the discussions that we have with different landowners or lessees are going better than others; some of them are looking better than others,” Tay said, without specifically commenting on the discussion with Mariana Resort.

Cavanagh said Mariana Resort believes that a casino, if it comes to fruition on Saipan, would be good for the CNMI.

“But the best thing for the CNMI is to have the casino and Mariana Resort to [co-]exist,” she said.

Mariana Resort is the first major Japanese investor in the CNMI, Cavanagh pointed out. Mariana Resort marked its 36th year in April this year.

Cavanagh said it is also important to note how the CNMI is treating its longtime foreign investors.

“Even though Japan is a crisis market today…it’s always best to have a good mixture of investments and markets in the CNMI,” she said.

Like other longtime foreign investors, Mariana Resort hopes that it won’t be chased out of the CNMI.

“We don’t owe the government taxes. We are current with our [land] lease. We have been a good corporate citizen for 36 years,” Cavanagh said.

Other businesses whose public land leases are also expiring are looking at how DPL and the Legislature will treat the Mariana Resort land lease issue, because that could set the tone for their negotiations when time comes for them to also negotiate a renewal or extension of their leases.

Rep. Anthony Benavente (Ind-Saipan), chairman of the House Natural Resources Committee, said DPL’s lack of a decision on the Mariana Resort land lease could be because it is giving Mariana Resort and Best Sunshine ample time to discuss the property between them. But Benavente said this is only his opinion.

Cavanagh said they are planning to invest a “minimum of $30 million” in the Mariana Resort for its proposed 25-year lease renewal.

Part of that additional investment is the addition of 100 executive rooms. Right now, Mariana Resort in Marpi has 74 hotel rooms and 50 individual cottages.

The casino law requires Best Sunshine to build a minimum of 2,000 “new” guest rooms within an eight-year period.

Cavanagh said the law is clear that the 2,000 rooms should be built from the ground up, and not just build on an existing hotel.

But Best Sunshine could go beyond the 2,000 required rooms by investing in existing hotels. Anything developed out of existing hotels, however, won’t count toward the required 2,000 “new” rooms.

Tay of Best Sunshine said the casino license agreement allows for phased development of the integrated casino resort.

“If you look at the timeline, of eight years [to complete], the remaining three to four years [of Mariana Resort lease] don’t go beyond eight years. It’s right within the timeline we have to [meet] to finish the integrated resort,” Tay said.

Again, without singling out Mariana Resort, Tay said Best Sunshine continues to talk with different landowners and lessees.

But Tay said he wants to point out that Best Sunshine is “reasonable.”

“We are trying to be reasonable in terms of acquiring land from certain people. …At the end of the day, what we hope to achieve is going to benefit everyone on the island—from the locals to other foreign investors to the local businesses and to the government,” he added.

Still, Best Sunshine has yet to lock in the lands it needs to build the integrated casino resort. The license agreement allows Best Sunshine “up to three development sites.”

“That provision in the agreement is meant to address the challenges with the required land for the development amongst other things but it also gives us the flexibility to go beyond the minimum requirements,” Tay said.

When asked about the internal deadline to acquire land, Tay said it’s “last week.”

Tay echoed other government officials’ call for patience as they work on the development of an integrated casino resort on Saipan.

“I think we are progressing quite positively but people have to understand that land acquisition does not take place overnight. It’s going to take weeks or even months and the building of an integrated resort takes years,” he added.

Meanwhile, most of Best Sunshine’s $30 million advance license fee payments have already been distributed by the CNMI government to retirees for their 25-percent pension covering nine months and to former and current government employees for payment of interest on their withdrawn NMI Retirement Fund defined benefit plan contributions.