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Row on marina reaches court
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Posted on Apr 02 1999
The Marine Revitalization Corporation yesterday asked the federal court to compel the Department of Lands and Natural Resources order the commercial boats to vacate the Smiling Cove and move to the Outer Cove.
The agency’s disregard to enforce the CNMI law and the Smiling Cove regulations had resulted to the near bankruptcy of MRC and businessman Anthony Pellegrino, who made the loan guarantee.
Because of the assurance made by the DLNR and the Park Service that commercial boats will vacate the Smiling Cove, the MRC, a non-profit organization, decided to build the Outer Cove Marina and Pellegrino had assumed the personal guarantees.
When MRC borrowed around $2.5 million from Bank of Hawaii and Mobil Corporation, he pledged a residential house worth $500,000 and another $300,000 worth of his personal Certificate of Deposits.
Pellegrino and his wife also gave a personal guarantee to Bank of Hawaii for the $2 million loan.
In order to pay the $3.5 million loan in six and half years, parties have agreed to rely on the proceeds collected from docking fees, passenger fees and future profits which will be realized from its daily operations.
Based on the rules and regulations signed by MRC, DLNR and the National Park Service in 1997, docking and passenger fees were set at $2.75 for each passenger. It was later amended to $4 per passenger.
Long before the Outer Cove Marina was completed in July last year, former DLNR Secretary Margaret Wonnenberg issued notices In December 1997 to the commercial boat owners informing parties that their use of the Smiling Cove marina had ended.
The Director of Fish and Wildlife also ceased to issue permits for commercial use of the ships pursuant to Section 902.
From December 1997 to date, the commercial vessels have remained adamant not to vacate their free lodging at the Smiling Cove and refusing to pay docking and passenger fees at the new site.
The Bank of Hawaii has informed MRC to meet its outstanding obligations otherwise it will move to foreclose.
Both MRC and Pellegrino are asking for damages in an amount to be proven at the trial and for costs incurred in filing this case.
