SOME marine sports operators including their staffers on Tuesday afternoon staged a protest at the entrance to the Department of Public Lands office in Dandan to oppose the proposed amendments to the rules and regulations for Managaha’s commercial use.
They also submitted written comments to express their concerns about the proposed changes.
Among those who submitted written comments were Chung Lee of BSEA Sunsports and Gary Orpiano of Amigo Water Sports.
“It is both unfair and discriminatory for DPL to alter regulations that have been in place since 1993 simply because Marianas Global Inc. is not realizing the profits they anticipated,” Lee said. “MGI should have been fully aware of the challenges when they signed the contract last year. If they miscalculated their potential earnings, that is their responsibility, not ours. We should not be penalized for the mistakes of others. The success we have achieved has come through years of hard work, perseverance and sound business decisions. MGI has only been in business for one year. If they expected to achieve significant profits immediately they were mistaken.”
She added, “If DPL is considering changing the regulations, will the [request for proposals] be reopened for rebidding? What about the companies that chose not to bid on the Managaha concession due to the anticipated challenges and the decrease in tourism? If the original RFP had included the proposed new regulations, more companies might have been interested in bidding for the concession.”
According to Lee, DPL has not done an adequate job in selecting a responsible company to manage Managaha.
“Have you visited the island recently? Have you seen the condition of the bathrooms?” she asked. “MGI has made minimal improvements to the island, resulting in a disappointing and embarrassing experience for visitors. Many Korean tourists visit Saipan specifically to enjoy the pristine waters of Managaha, and their experiences have been less than satisfactory,” Lee said.
She said MGI has defaulted on payments to several local businesses that provide services to them, citing financial difficulties. At least two companies have taken legal action to recover payments for services rendered, she added.
Marine sports operators are disappointed that DPL appears to be favoring MGI over local businesses, she said.
“If the proposed changes are adopted, many marine operators will be forced to close,” Lee added.
Orpiano, who has been in the marine sports business for about 30 years, said, “The amendments seem to expand the exclusive rights of the main concessionaire to conduct or operate tours and activities on the island. This could create a monopoly, limiting competition and potentially leading to higher prices or lower quality services due to the lack of competitive pressure. Local businesses and operators, unless approved by DPL and the main concessionaire, would be excluded from providing services, limiting economic opportunities for local entrepreneurs and small businesses.”
“While the proposed amendments aim to improve the management of Managaha, they also impose restrictions that could adversely affect local residents both economically and culturally,” Orpiano said. “These changes raise concerns regarding the balance between resource management and ensuring fair access and competition. I urge DPL to reconsider these amendments, taking into account the potential negative impacts on the local community and exploring alternative measures that balance resource management with the rights and opportunities of local residents and businesses.”
Not the first time
Attorney Mark Scoggins, who represents six marine sports companies, said, “We fought a similar fight 12 years ago — we won it then, and we intend to win it now.”
“Twelve years ago, it is a very similar situation — the [Managaha] concessionaire at that time decided that they did not like the fact they were having to have competition with these smaller operators that engaged in the marine sports business so they put a lot of pressure on DPL to change the rules. We won the lawsuit to that,” the lawyer added.
“Here we are again with a very similar situation,” he said. “But the fact is the current regulations have been in place more than 32 years, and the businesses that we represent, some of them, have been in business for that entire time if not longer. They have been always around. They have been always allowed to do their business in the exact same manner the way they are doing it right now in this economy. That is all we are asking for. We have been asking for the rules in place for over 30 years not to change. DPL is now trying to change those rules for the benefit of its current concessionaire. In some way we understand, the economy is terrible, especially tourism, but the solution to this problem is not to let all these other operators out of business. That is what’s going to happen if these new regulations go through. We are here trying to protect your neighbors, your family members, your friends who own businesses, they employed lots of people — they are struggling too,” Scoggins said.
Public hearing
DPL has announced that it will conduct two public hearings regarding the proposed amendments to the commercial rules and regulations for Managaha.
Both hearings will start at 5:30 p.m. on Aug. 16 and 19 in the DPL conference room at the Joeten Dandan Commercial Building.
For its part, the House Committee on Natural Resources conducted a public hearing on Aug. 8. Many residents appeared before the panel and expressed their opposition to the proposed changes to the Managaha commercial use.
‘Read carefully’
Asked about the proposed changes, Attorney General Edward E. Manibusan told reporters on Friday, “People should read carefully because basically we’re just trying to ensure that Marianas Global is given the opportunity to do their business as a concessionaire while also accommodating the rest of the marine operators.”
The AG said, “There is ample time for comments and should comments come out in favor or if there’s an issue, the proposed regulations can always be amended to make accommodations. Right now, this is still in the comment period.”
He added, “I know there’s a lot of emotional issues because marine operators believe that their businesses will be taken away. I think, as we go through the process and review the comments, we will be able to consider [them]. Again, these are just proposed regulations and will not be implemented until all comments are reviewed thoroughly.”
An official who declined to be identified told Variety that the base rent of $800,000 a year that Marianas Global has to pay is not “doable, realistically.”
A local businessman, who also requested anonymity, said the “additional gross receipt rent” of 9% under the concession agreement is “dismaying.”
“This is standard for any DPL lease agreement, [but] that 9% gross receipt rent is basically about 40% of the business net profit, [and] that is not very encouraging,” the businessman added.
In a statement on Aug. 2, Marianas Global said it is not striving for a “monopoly on profits.”
“Over the past year, we have worked diligently to collaborate with existing operators,” it added. “Our proposal focused on partnership and mutual benefit. We offered financial support to replace outdated and unsafe equipment for marine sports and rental operators, in exchange for subcontracting the provision of services to tourists visiting Managaha through us, ensuring fair profit margins. Additionally, we proposed a commission of 30-40% for local small travel agencies in return for their partnership in promoting and offering our services.”
But “existing operators” have “declined all of our proposals for unknown reasons,” Marianas Global stated.
Marine sports operators are opposed to the proposed changes to Managaha’s commercial use rules.
Marine sports operators and their employees stage a protest outside the Department of Public Lands office on Tuesday afternoon.
Attorney Mark Scoggins speaks to reporters.
Chung Lee of BSEA Sunsports submits her written comment to the Department of Public Lands on Tuesday afternoon
