Marianas Variety

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    Sunday, December 16, 2018-10:19:37P.M.

     

     

     

     

     

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NMI retirement crisis ‘over’

THE issuance of a Saipan casino license that will lead to the restoration of the 25 percent pension cut today or later this week is “pretty much the conclusion of the NMI retirement crisis,” Speaker Joseph P. Deleon Guerrero said yesterday.

Variety was told that following the signing of the casino development agreement between Best Sunshine International Limited and the Lottery Commission, the $30 million two-year license fee was transferred from an escrow account to the CNMI general fund.

This means the Inos administration is ready to pay the retirees the 25 percent of their pension that was deferred following the settlement agreement between the NMI Retirement Fund and the government.

In a statement yesterday, Lottery Commission Chairman Sixto Igisomar announced that an agreement had been reached between the commission and Best Sunshine’s mother company, Imperial Pacific International, for the issuance of an exclusive casino license on Saipan.

Imperial Pacific estimates it will spend a total of $3.14 billion to construct 2,229 hotel rooms; 17,000 square meters of gaming floor area; 13,532 square meters of food and beverage outlets (at least 23 outlets); 15,000 square meters of retail space; a 600 seat theatre; 9,094 square meters of meeting space including a ballroom; a wedding chapel; 200 villas; 1,050 square meters of fitness area; a $100 million themed entertainment facility; and a 1,900 square-meter spa facility.

In an interview yesterday, Deleon Guerrero said “I am happy.”

The issuance of the casino license, he added, has stabilized the retirement crisis.

Two things happened to resolve the retirement issue, he said.

One was the settlement agreement that assures the CNMI government will pay its long-term obligations to the retirees; and the second was the restoration of the 25 percent pension cut.

In the future, Deleon Guerrero said, the $15 million annual casino license fee will cover the payment of the 25 percent.

“So for me, it is pretty much the end of the retirement crisis,” the speaker said.

Rep. Mario Taitano, IR-Saipan, is thankful to Best Sunshine for signing the casino agreement.

“It will allow us retirees to receive the deferred 25 percent of our pension which is long overdue. There is a lot of frustration in the community about the unpaid 25 percent and the defined benefit plan interest,” he said.

“I am so glad that these things will be resolved soon, but the question is will retirees continue to receive 100 percent of their pension moving forward?”

He noted that during the negotiations between the government and the Retirement Fund, there was no mention of a 100 percent pension.

The announcement

In his announcement, the Lottery Commission Chairman Sixto Igisomar said:

"These were complex negotiations as the license is a long-term agreement that will have a 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."

He added, “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: An 800-room four or five star luxury hotel; a $100,000,000 themed entertainment facility with amphitheater; 5,372 square meters of food and beverage outlets: 2,500 square meters of meeting space (including indoor seating space for 600 persons); 5,000 square meters of retail shops; a wedding chapel; a 500 square meter spa/fitness area; 10,000 square-meters of gaming space and associated parking, site improvements, landscaping, furnishings, fixtures, utilities and infrastructure.

Igisomar said "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.”

He added, “This concept brings together shopping, gaming, hotel accommodations, housing development, meeting facilities, a 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.”

Acting Attorney General Birnbrich said: "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 Procedures Act."

Department of Public Safety Commissioner James C. Deleon Guerrero said he wanted to assure the public that the foremost issue for 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 in such a way that it would be in the best interests of the people. The Northern Mariana Islands are my home and I realized that the decisions we would be making would have long term effects on our families and I want to protect and represent these interests,"

Sigh of relief

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,” he said.

“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 for 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 about 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 will take careful consideration by both the developer and government agencies."

Finance Secretary Larrisa Larson said: "We are moving forward in an expeditious manner to transfer the $30 million licensee deposit, but this will involve several steps. 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."