Dana Calvo, the acting Commonwealth Economic Development Authority board chair, listens to economic development manager David Guerrero as board members Michael Sablan, and Tania David, partly hidden, listen during a board meeting on Thursday in CEDA conference room in San Jose.
Photo by Emmanuel T. Erediano
THE Commonwealth Economic Development Authority’s board of directors on Thursday unanimously approved the request of J&P Holdings (CNMI) LLC for a qualifying certificate, granting the company a 100% abatement on business gross revenue, corporate income and individual income taxes.
J&P Holdings, which owns Micronesian Air Cargo Services, plans to invest $8.2 million in the first three years of an inter-island transportation business under the name Micronesian Air Connection Services.
The CEDA board’s decision has to be approved by Gov. Arnold I. Palacios.
Present in the CEDA board meeting on Thursday were the acting chair, Dana A. Calvo, and board members Tania Sophia David, Michael S. Sablan, Frank Borja and Daniel Taitano. Joining them were acting executive director Derek Sasamoto and economic development manager David Guerrero.
CEDA Board Chair Frank Rabauliman was off-island but attended the meeting via videoconference.
It took the CEDA board almost three months to decide on granting J&P Holdings a QC for 22 years, which requires J&P Holdings to, among other things, report to CEDA the number of Micronesian Air’s flights and passengers.
Guerrero said this is “very important for economic purposes and economic development so we need that information from them.”
The QC also requires J&P Holdings to submit annual financial audits, and to continuously provide inter-island air passenger services.
“I’m excited for the community,” Guerrero said. “This is a good public benefit. But we still had to do our due diligence and I honestly say that we analyzed all the information and I do believe that we came up with the right decision on this and so I feel good about it.”
J&P Holdings owner John Stewart said: “We are ecstatic. We are very happy that the QC was approved [by the CEDA board].”
He said the board has “done more than just their due diligence and we are very happy with it and we’ll move on.”
For their first year of operation, he said, they will use a nine-seat aircraft for the Saipan-Rota and Rota-Guam routes, and an eight-seat aircraft for the Saipan-Tinian route.
During a public hearing in the Marianas High School Cafeteria on Nov. 6, 2024, Micronesian Air tax attorney Tina Azarvand said without the QC, the venture “is just not economically viable.”
