THE Department of Public Lands has taken “corrective actions” to address concerns regarding its land lease deal with A&M Corp. which is owned by Lt. Gov. Arnold I. Palacios.
In her report submitted last week to the Legislature, Public Auditor Kina B. Peter said the corrective actions taken by DPL include “working closely with the newly assigned assistant attorney general,” and meeting with the lessee’s counsel to reach a resolution to address the audit finding and the concerns” of the Office of the Attorney General.
The land lease contract between DPL and A&M Corp., or Lease No. L9104S, involves 2,813 square meters of public land in Lower Base,
In April 2019, OPA made a determination that DPL had failed to fulfill its duty on the property leased by Palacios.
Based on OPA’s assessment at the time, DPL failed to properly assess and collect the lease rental fees in accordance with the terms of the lease and its amendments by not enforcing the timely submission of required documents; and by not taking into account the date that an adjacent parcel was physically utilized or encroached upon by the lessee prior to the second amendment to the lease agreement.
This encroachment, was known to DPL and its predecessor, the Marianas Public Land Corp., according to then-Public Auditor Mike Pai.
In a report last week, Peter said OPA’s audit recommendations regarding the land lease issue have been resolved.
On Oct. 28, 2020, she said, DPL provided OPA a copy of the executed settlement agreement and release agreement for Lease No. L9104S.
According to the agreement, DPL and the lessee reached a settlement agreement amount for the intermittent use of the adjacent parcel prior to Oct. 31, 2014.
OPA said the agreement was approved by the attorney general on June 1, 2020.
OPA’s recommendation on the encroachment issue was to “reach concurrence with the [Office of the] AG as to the physical usage date of the adjacent parcel.”
On Dec. 19, 2019, OPA said, DPL worked closely with new assistant AG and met with lessee’s counsel “to reach a resolution, to address the audit finding, and concerns of [the Office of the] AG.”
OPA likewise recommended the creation of “a proper invoice for the lessee to avoid loss or revenue.”
OPA said it also encourages DPL to properly enforce its regulations and land lease agreements to avoid similar issues in the future and mitigate the risk of revenue loss to the CNMI.
