A panel that reviewed a proposed constitutional amendment to increase the CNMI’s maximum 40-year lease term on public lands to 99 years now says that the issue remains “controversial” and “highly divisive,” and therefore recommends that the full House membership decide on it.
This comes at a time when at least three hotels have less than 10 years left on their public land leases: global brand Hyatt Regency Saipan in Garapan, Marianas Resort & Spa in Marpi, and Fiesta Resort & Spa, also in Garapan.
The House Natural Resources Committee’s report and recommendation could be adopted in this afternoon’s House session.
“I think the initiative has enough votes to pass in the House, given that the 40-year lease is limiting the investments in the CNMI. I, for one, would vote ‘yes’ to it to allow voters to decide on it. It’s in their purview,” Rep. Christopher Leon Guerrero (Cov-Saipan), one of the initiative’s co-authors, told Saipan Tribune yesterday.
If the House and Senate pass Speaker Joseph Deleon Guerrero’s (Ind-Saipan) House Legislative Initiative 18-5, it will be placed on the ballot for voters’ ratification in the November 2014 elections.
Besides the main author, the initiative has nine co-sponsors.
The House Natural Resources Committee, chaired by Rep. Anthony T. Benavente (Ind-Saipan), said the Legislature has deliberated extensively on the merits of Article 11 of the NMI Constitution over the years.
“Previous legislation indicates that the idea is not a new one and that the issue remains a controversial one. Therefore, your committee is left in an ‘indeterminate’ state and highly recommends that the full membership of the House decide upon this highly divisive initiative,” the panel said.
Of the seven Natural Resources Committee members, only five signed off on the report: the chairman, vice chair Rep. John Paul Sablan (Cov-Saipan), Reps. Richard Seman (R-Saipan), Ray Tebuteb (Ind-Saipan), and Ralph Yumul (Ind-Saipan).
Rep. Roman Benavente (Ind-Saipan) and floor leader Ralph Demapan (Cov-Saipan) didn’t sign off on it.
Article 11 of the NMI Constitution partly states that public lands “may not transfer a leasehold interest in public lands that exceeds 25 years including renewal rights. An extension of not more than 15 years may be given upon approval by three-fourths of the members of the Legislature.”
The Saipan Chamber of Commerce, the largest business group in the CNMI with some 160 members, supports an extended maximum land lease term.
While the maximum lease term for public lands is 40 years, the maximum lease term is longer for private lands—55 years.
Attempts to also increase the land lease term for private lands from 55 years to 99 years have failed over the years.
Voters, however, will be voting on an Article 12 initiative in 2014—one that allows any U.S. citizen with “at least some degree” of Chamorro or Carolinian blood to be considered a person of Northern Marianas descent who can own land in the CNMI.
Pros and cons
The House Natural Resources Committee said Article 11 has served an extremely valuable and useful purpose by acting as a check and balance through which land transactions in the CNMI are conducted and screened.
It also acknowledges that existing leasehold interest plus other incentives that the CNMI offers is more than generous and will allow businesses ample time to regain their investments, “plus some.”
The panel said that leasing public lands comes at an opportune time because currently available hotel rooms are not enough to accommodate an increasing number of tourists to the CNMI.
Even with current leasehold restrictions, seven groups of investors have expressed interest in leasing public lands in San Antonio and Marpi to build new hotel rooms with at least 200 rooms.
So far, the Department of Public Lands has released a short list, with two investors, for the San Antonio public land. The two investors still need to present their plans to a review and evaluation committee, to determine which one will win the right to lease the tract of land for their multimillion hotel project.
The committee said there have been numerous attempts over the years to amend or repeal the Article 11 restriction with the rationale that the initial reasons supporting it “are no longer consistent with the needs of the Commonwealth and its people.”
“Extending the term of the lease of public lands from 25 years, with an additional 15 years subject to the approval of the Legislature to 99 years will generate renewed development interest in the CNMI among investors,” the committee said.
It added that a longer leasehold term would encourage lending by investment and financial institutions to finance major projects that will then create jobs and stimulate other economic activity.
“The leases of public land will continue to require legislative approval where the leased land consists of more than 5 hectares,” the committee added.
The committee held public hearings on HLI 18-5 on Saipan, Tinian, and Rota.
During those public hearings, the public’s sentiments were, “at best, split equally over the advantages and disadvantages” of the initiative.
Another Article 11 initiative
The Natural Resources Committee also recommended full House action on another Article 11 initiative, HLI 18-6, allowing income from public lands to be used to compensate landowners for the taking of their property, and requiring DPL’s proposed annual budget to be approved by the Legislature.
Currently, public lands income are not allowed to be used for land compensation.
Moreover, DPL’s annual budget is submitted to the Legislature “for information purposes only.”
The committee report on the initiative, also authored by the speaker, could be acted on by the full House today.