CPA nixes operation of Outer Cove Marina

The Commonwealth Ports Authority board yesterday rejected the proposal of the Marine Revitalization Corp. asking CPA to takeover the operations of the controversial Outer Cove Marina and assume the company’s $3 million debt.

CPA Board Chairman Roman S. Palacios said assuming the management of the Outer Cove Marina would not give any additional revenue to the ports authority already saddled with its own financial problems.

This leaves the cash-strapped MRC with no other choice but to continue operating the marina amid huge losses due to the downtrend in tourist arrivals and continuous refusal of boat owners to relocate their vessels in the newly-built facility.

MRC could barely earn enough funds from the $4 passenger fee to repay the $3 million loan used to construct the marina. It has to pay the bank between $30,000 to $35,000 every month.

Majority of the boat owners have refused to transfer to the Outer Cove Marina from the Smiling Cove unless MRC addresses the safety concerns they have raised.

At the same time, the ports authority could not afford to assume an additional $3 million debt since its Seaport Division is still paying its $33 million debt.

“There’s a lot of work to be done at the seaport which include the construction of a passenger terminal facility. The Outer Cove Marina is not within the priority of CPA based on the seaport master plan,” said Rex Palacios, financial consultant of the ports authority.

He said assuming the operations of the Outer Cove Marina would only serve the interest of MRC but to the disadvantage of CPA, he said. Since MRC is registered as a non-profit corporation, it would be difficult for CPA to earn the much-needed revenue at the seaport.

The ports authority has directed Palacios and its legal counsel, former Judge Jose Dela Cruz, to study the offer of MRC to help the management and board members make a decision whether or not the project would help generate the much-needed revenue.

According to Dela Cruz, one legal issue which CPA would have to deal with in running the operations of Outer Cove Marina is the fact that the Department of Lands and Natural Resources leased to MRC the premises under a “Submerged Lands Lease Agreement,” which the CNMI approved under Public Law 9-46.

Section 8 of the Submerged Lands Lease Agreement prohibits a sublease, transfer or assignment of the lease to a third-party, without the express written approval of the secretary of DLNR. At least three aspects would have to be considered by CPA — the opinion of the Legislature, the ports authority would assume the role of the lessee for the leased premises, and DLNR Rules and Regulations would be superior to CPA port regulations.