QC application of Tasi Homes rejected

The Commonwealth Development Authority has rejected the qualifying certificate application of Tasi Homes LLC after investigation showed the conflicting interest of some company officials and its failure to disclose all information as required by law.

CDA executive director Manuel Sablan and Qualifying Certificate program analyst Carline Sablan confirmed this with Saipan Tribune yesterday.

Tasi Homes LLC wants to develop 49 three-bedroom apartment units along Hagoi Road corner lot near the Sugar Dock. This investment is valued at over $27 million and the company wants to avail of tax relief through the government’s QC program.

“We recommended rejection of their application for a number of reasons and one of these is the technical side. The information we received under its QC application do not jibe with the information it provided to NMHC [Northern Marianas Housing Corp.] when it applied for the Low Income Housing Tax Credit Program,” Manuel Sablan disclosed.

The CDA investigation, he said, found the non-disclosure of information as required by law such as the company’s intention to seek QC benefits from the government when it applied for the Low Income Housing Tax Credit.

“There was no mention in their application to NMHC that they intend to come to CDA for the qualifying certificate program, which is non-compliant with the statute,” said Manuel Sablan.

On top of this, CDA determined that Pacific Homes Mission—a nonprofit CNMI organization—owns a 1-percent ownership in Tasi Homes Manager Co. LLC, which owns a .01-percent ownership in Tasi Homes LLC.

CDA also found out that Ivan A. Blanco, an employee of the CNMI Governor’s Office and his spouse, Carmen P. Sablan, are the vice chairman and treasurer respectively of Pacific Homes Mission, which is a clear conflict of interest under Public Law 12-32, which states that no employee of the governor’s office and their immediate family shall directly or indirectly qualify for a QC.

Sablan told Saipan Tribune that the CDA board’s decision on Tasi Homes has been forwarded to Gov. Eloy S. Inos after the board unanimously adopted resolution 2014-004.

Litex vs QC
According to the CDA executive director, under NMHC’s federal Litex program—or Low Income Tax Credit Program—an applicant is required to demonstrate how much they need in tax credit to basically help fund a project. Prospective investors normally buy this tax credit every year for 10 years to credit to their own tax liability.

Saipan Tribune learned that Tasi Homes LLC was approved by NMHC for $32 million Litex benefits for 10 years—or $3.289 million every year.

The rejection of the company’s QC, according to Sablan, is not expected to halt the $27 million apartment project of Tasi Homes because it has already received funding from NMHC’s Litex program.

When asked if CDA’s decision would have differed if the company had disclosed everything from the start, Sablan said yes. However, he pointed out that even if the company addressed the “conflict of interest” in its application, there’s a provision in the law that bars them from reapplying for one year.

In its QC application, Tasi Homes is requesting a two-year waiver for both the developer’s and excise taxes. Developer tax is levied on project construction cost while excise tax is considered the import tax.