Without lease extension Rota Resort and Country Club faces closure

The Rota Resort and Country Club faces closure if the government would not extend its land lease agreement for another 15 years, according to legislators.

Its fate is expected to be decided by next month after the Board of Public Lands has completed review of the initial 25-year lease forged with the Japanese-owned resort.

SNM Corporation, which owns and operates the main tourism facility on Rota, has appealed to government officials to grant the request or “they may close down because they keep losing money,” said Sen. Ricardo S. Atalig.

Members of the Senate and the House Natural Resources Committee met over the weekend with company representatives in an attempt to resolve the problems.

In an interview yesterday, Atalig said the request for lease extension is necessary as part of the plan by SNM to loan from a bank to infuse more funds for its operations.

The resort has already expressed intention to the legislators to cut the working hours of its staff in an effort to trim operational costs which have remained high despite lesser profit in recent months due to continuous decline in tourists arrivals to the CNMI.

“If the government extends the lease agreement, they will be able to borrow money from the bank so that they can continue to operate,” Atalig said.

Once they are allowed to remain on the public land they are currently occupying, they will have longer period enough to recoup investments and repay the loan, according to the senator.

Company officials did not provide details at the meeting as to the amount of the loan.

The resort has 15 more years to go before the current lease expires. Should the government agree to provide extension, it will have an accumulative 40 years of occupancy.

Atalig appealed to the government to offer SNM incentives at this time, particularly the lease extension, noting that it is the only major hotel left on Rota following recent closure of Pau Pau Hotel.

“We don’t want to see that happen again,” the senator explained, adding many Rota residents have found employment there. “They are willing to stay so long as the government grants this lease extension.”

Board of Public Lands Chairman Tomas B. Aldan earlier had sought suspension on the plan by the Legislature to act on the request, warning members of the potential implication of their move on the government position.

This is the second time the resort has asked the government for lease extension since 1997 after the Legislature agreed to grant the request which fell through when legislators failed to vote on the proposal.