Admin takes back land from CHCC

Commonwealth Health Center (From Wikimedia Commons)

The Commonwealth Healthcare Corp. expects to lose potential revenues in the years ahead following disclosure that the Inos administration is taking back the property that the government previously gave the hospital so it could augment its income.

Saipan Tribune learned that the Inos’ administration conveyed the re-transfer of the two lots through Attorney General Joey P. San Nicolas.

It was former governor Benigno R. Fitial who earlier assigned the two parcels of land on Navy Hill to the corporation in January 2012 as a means for it to raise additional revenue through land leases.

The designated properties are Lot Nos. 098 D 04 and D 05, the two parcels of land adjacent to the hospital totaling to 38,500 square meters. This has an estimated value of $1.2 million.

On Nov. 13, 2013, San Nicolas wrote the CHCC board informing it of the wish of the Inos administration to reclaim the properties. This matter was the subject of the corporation board’s executive session on Tuesday, which Gov. Eloy S. Inos briefly participated in via teleconference with members.

San Nicolas, in his letter to the board, said: “I am writing on behalf of the governor, the Department of Public Lands, and the Office of Attorney General regarding the transfer of Lot Nos. 098 D04 and D05 to the DPL, and the assignment of the current option to lease between the CHC and Landscape Management Systems to DPL.”

It will be recalled that in April this year, the CHCC board approved to offer for lease a portion of the lands as a means to generate revenue for the hospital. The decision to open for lease was reached following receipt of a proposal from Landscape Management Systems Inc. in Guam, which wants to respond to an announcement by the U.S. government’s General Services Administration.

Based on the then adopted resolution, the board recommended that the corporation enter into an option to lease up to 10,000 square meters of the land.

GSA had announced that it is seeking to lease a property on Saipan where it can build a courtroom, administrative office, and law enforcement office. Landscape Management System, using CHCC property for its plan, wanted to respond to this announcement. The corporation later received a protest from another interested party and a case is now pending in court.

CHCC board chair Joaquin Torres confirmed with Saipan Tribune on Friday the wish of the Inos administration to reclaim the two properties.

Torres also acknowledged receiving the OAG letter but said the board is not satisfied yet with what the letter conveys. He pointed out that the board’s fiduciary duty is to act for the best interest of the hospital. He said the board expects its legal counsel, Allen Hazlip, to soon issue an opinion on the matter and if the opinion states that the re-transfer is for the best interest of the CHCC, the property will be returned to DPL. Otherwise, he said, “he has to indemnify us.”

“Since the administration is demanding the retransfer of the land, we [as the board] need to be protected also. I ask the AG to do a letter that would state that the action [to return it] is for the best interest of the corporation,” Torres told Saipan Tribune.

When asked about the pending court case, Torres said that they await the court decision. He is convinced that the CHCC has a strong argument pertaining to the matter.

He disclosed, however, that GSA is no longer interested in leasing the property as a result of the litigation.

Saipan Tribune learned that a meeting between parties—the governor, DPL Secretary Pete Tenorio, representatives of Marianas Public Land Trust, and corporation interim CEO Esther Muña—took place on Oct. 23 where a consensus was reached that the public lands would be re-transferred back to the government. The same property is also encumbered due to the corporation’s existing line of credit with MPLT.

San Nicolas, in his letter to CHCC, cited tapping future federal projects on the property as the reason for the decision to reclaim the lots.

“If lots are not deeded back to DPL, which has the sole constitutional and statutory authority over the management of public lands, there is a distinct possibility that lots will not be available for these federal projects. To avoid this possibility, and in the best interest of the Commonwealth as a whole, all parties to the Oct. 23 meeting agreed that these should be deeded to DPL, and all options to lease be likewise assigned to DPL,” according to the AG.