The House of Representatives and the Senate adopted Joint Session Resolution 16-3 to approve the March 4 lease agreement between the Department of Public Lands and Neo Gold Wings Paradise Saipan Corporation, doing business as NGP Casino and Hotel.
Except for Reps. Tina Sablan, Ind.-Saipan, and Stanley T. Torres, R-Saipan, the rest of the 19 members of the House voted in favor of the resolution. Rep. Justo S. Quitugua, D-Saipan, was absent.
All members of the Senate except for Luis Crisostimo, D-Saipan, voted to adopt the resolution.
During the discussion, Sablan raised concern about NGP’s financial capability to undertake the multi-million dollar project.
She said there are so many questions about the project that the Legislature is ignoring.
“I couldn’t, in my conscience, vote in favor of this when I just got the joint resolution and the copy of the lease less than 24 hours. I did see an earlier draft and I reviewed that. That also raised questions for me on what due diligence we’ve done,” she said.
Based on the lease contract submitted to the Legislature, DPL Secretary John Del Rosario signed the agreement on March 4.
It was notarized on the same day.
NGP’s president/treasurer Hyun Myung In separately executed an affidavit attesting his consent to the lease agreement in California dated March 2. This document was then notarized on Saipan the following day.
Torres, a certified notary public, questioned the discrepancy in the notarized documents, saying it should not be taken as notarized in the CNMI because the person who signed the contract wasn’t here.
“These documents are questionable,” he said.
Sablan said it bothers her that the lease was approved despite many unanswered questions.
“There are questions about the finances that NGP secured and the response made to it. There were questions about its marketing plan. They were projecting 50 percent occupancy when Tinian Dynasty has yet to see a 20 percent occupancy rate despite the two flights from Shanghai everyday,” she said.
“Their financial plan also involves selling stocks, that’s the plan,” she added. [There’s a communication from] Wells Fargo that didn’t have a letter head. As concerned as we are about the 30 percent minimum employment, somehow it was watered down to 20 percent.”
According to NGP’s corporate history, it started in 1998 under the name Han-Kyoreh Living Co. This firm was involved in publishing newspapers and magazines, data processing service and technical consulting service.
In 2001, it branched out to real estate and leasing and advertising and even into art and cultural service related to music and plays.
By 2007, NGP’s parent firm went into commercial printing service, market research and rental of industrial equipment and last year it expanded to the casino industry, including bond sale and money exchange service.
The multi-million-dollar hotel-casino project on Tinian is envisioned to be mainly financed through individual and corporate stockholders.
Speaker Arnold I. Palacios, R-Saipan, said there are already protective clauses in the lease contract.
He said within six months NGP must secure the necessary local and federal permits concerning the project; if not, it will be in default.
Based on the lease contract, NGP must lease the 300 hectares for $72,000 annually for the first three years only.
In the fourth and fifth year, the lease should be $108,000 or 3 percent of gross receipts, whichever is higher.
NGP must pay DPL $72,000 by April 1. If it fails to meet the deadline, a 60-day grace period will be extended to the firm.
In the sixth to seventh year of the lease, NGP must pay DPL 4 percent of the fair market value or 3 percent of gross receipts, whichever is higher. In the eighth year, the rent will go up to 5 percent of the fair market value.
The rent will increase thereafter by 1 percent until it reaches the maximum 8 percent in the fourth five-year period.
NGP said it plans to develop a state-of-the art hotel and casino on Tinian with international conference hall, surrounded by a theme and amusement park, a water park, an outdoor concert hall, a zoological garden and a golf course.
