THE transfer of a public land lease contract that involves a 15-year extension and five hectares or more of land requires the approval of the CNMI Legislature, according to a legal opinion issued by House legal counsel Joe Taijeron.
As the counsel assigned to the House Committee on Natural Resources, Taijeron was responding to an inquiry from Sen. Paul A. Manglona.
Manglona and the House committee’s chairman, Rep. Angelo Camacho, were among the lawmakers who expressed concern about Saipan Portopia Hotel Corp.’s assignment of the Hyatt Regency Saipan property to new investors, Coldwell Solar and MB Capital LLC, following the hotel’s closure on June 30, 2024.
Coldwell Solar and MB Capital LLC will invest $30 million in the renovation of the hotel, according to Department of Public Lands Secretary Teresita A. Santos.
Camacho and Rep. Julie Marie Ogo want to know whether DPL and Portopia have “adequately considered” other potential buyers of the land lease contract and the property.
Another group of investors and its subsidiary, M&E Enterprise, are interested in investing $37 million in the hotel property, and turning it into a “five-star Hilton Hotel.”
In a legal opinion he sent to Camacho on Tuesday, Taijeron said, “Yes, pursuant to Title 1, Section 2806(d), and consistent with the CNMI Constitution, the Legislature must approve or disapprove any transfer of public land interest that involves an extension of up to 15 years to an existing lease or concerns an area of 5 hectares or more for commercial purposes.”
Title 1 Section 2806 is the codified provision of Public Law 15, which created DPL as successor of the Marianas Public Land Corporation and the Marianas Public Land Authority.
Taijeron cited 1 CMC Section 2806(c)(1), which states, “The Department may not transfer a leasehold interest in public lands that exceeds 40 years, including renewal rights. An extension of not more than 15 years may be granted upon approval by three-fourths of the members of the Legislature sitting in joint session.”
This provision, he said, requires the Legislature to review land lease agreements that meet a 40-year duration threshold.
He said CNMI law “has consistently provided that the Legislature must approve or disapprove of public land transfers like the Coral Ocean Resort land lease agreement, as well as similar transfers of public lands when they are within the statutory threshold for time and size.”
Title 1, Sections 2806 and 2807 clearly mandate this legislative approval, Taijeron said.
Moreover, this authority has been clearly established since the enactment of the CNMI Constitution, he added.
He said, “Courts have not yet decided this particular issue, but by analogy, any attempt to circumvent CNMI constitutional provisions concerning land in the Article 12 context has resulted in the contracts being declared null and void.”
Accordingly, Taijeron said, any contract that violates Article 11 of the Constitution may also be deemed to be null and void if the matter was taken to court for failure to meet the requirements of CNMI law.
Contractual provisions such as Article 14 cannot override CNMI law, Taijeron said. “There can be no imputed binding of future CNMI legislatures,” he added. “One legislative approval of a lease cannot and does not bind another legislature 40 years later.”
Gov. Arnold I. Palacios said on Sunday that the assignment of the Hyatt land lease to Coldwell Solar and MB Capital LLC, “has been finalized,” but M&E Enterprise and its investment partners are still hoping they will be given an opportunity to present their proposal.
