Palacios supports new land lease for Coral Ocean Resort
Gov. Arnold I. Palacios generally supports granting a new land lease to Suwaso Corp. to allow its Coral Ocean Resort’s operation to continue for another 40 years, but concedes that the “devil is in the details.”
Palacios said in an interview yesterday that he has not seen the details of the proposed new land lease, but is generally open to the idea.
He said the Department of Public Lands has already submitted the proposed lease to the Legislature and that he trusts DPL and the lawyers that help craft the proposal.
Palacios believes the proposed lease was crafted in a way that would be beneficial for the community. He said he is going to look at the executive summary of the proposal.
“It has to move on to the Legislature for legislative approval,” said the governor, adding that it does not need his signature once it gets legislative approval.
Palacios said he was actually the one who introduced the initiative pertaining to any new land lease, referring to Senate Bill 20-35, SD3, HD2 that he introduced in 2017 when he was the Senate president.
The legislation, which was signed into Public Law 20-84 in 2018, increases the term of public land leases up to 40 years plus an extension up to 15 years, for a total of 55 years.
The bill authorizes DPL to negotiate a new public land lease with certain existing public land lessees under new terms and consideration without publishing a request for proposal. It also grants the Legislature the authority to approve public land leases.
Under the DPL proposal, Suwaso is allowed to continue its operation of the Coral Ocean Resort for another 40 years, with an investment of over $30 million. The company will be granted an additional 15-year lease extension if the initial lease is granted by DPL and is approved by the Legislature.
DPL Secretary Teresita A. Santos submitted to the Legislature last March 11 a packet of documents for the Legislature’s review and consideration of Suwaso’s request to renew its land lease. The Legislature received the packet on Tuesday.
Santos said Suwaso has sustained a good relationship with DPL and that the company has been complaint with the provisions of the lease and has kept its account current.
Under the proposed new lease, Suwaso will pay an annual rate of 0.6% of the fair market value for the annual rate of 0.6% of the fair market value for the first 10 years and that will increase to 1.125% for the remaining term of the lease.
In addition, the company will pay a percentage of its business gross receipts and contribute over $1.8 million in public benefits.
Suwaso was initially granted a 25-year lease for lands in Unai Dangkulu containing a total area of 581,585 square meters, on Feb. 10, 1986, with an option to extend it for 15 years, for a total of 40 years. After the initial lease expired in 2011, the company opted to avail of its 15-year extension. It is currently on its 38th year. The 15-year extension will expire in 2026.
Arnold I. Palacios