Legislature eyes lease extension for SNM san BPL nod

In a move that may anger public lands officials, Senate Floor Leader Pete P. Reyes yesterday raised the possibility for the Legislature to go ahead with the plan to extend the lease of the financially-troubled Rota Resort and Country Club.

Legal counsels for the Legislature have recommended voting on the resort’s request for an extension even without going through the public lands board in light of the move made by lawmakers two years ago, according to the senator.

“This is the way we should do if we can’t get cooperation from government and prevent a disaster from happening,” Reyes said. “We are going to do everything within the power of this Legislature to act to avoid a crisis situation. It seems like this government is only a crisis government.”

Pitching strongly for the resort, he also prodded public lands officials to waive stringent conditions in its lease agreement in view of the economic situation on the island.

“It is absolutely necessary to look at the lease agreement and remove all those restrictions or conditions that the government has placed in the original lease agreement in order to ensure that operations (of the resort) continue,” Reyes said.

The extension is an attempt by Rota Resort to infuse badly needed funds into its operations following steep drop in tourist arrivals to the island, which has already forced closure of another hotel.

Reyes’ statement followed mounting support from members of the Senate on the request by Rota Resort for another 15 years on the lease of public lands it is currently occupying as part of its bail-out plan.

Facing potential closure, the extension will enable SNM Corporation, owner of the resort, to borrow money from the banks as a longer lease would give it more time to recoup investments and pay off the loan, according to legislators.

Under the terms stipulated in the initial 25-year lease granted by the Board of Public Lands to SNM, the resort must build a 200-room hotel which is one issue that reportedly has prevented granting of the much-needed lease extension.

But with the worsening economic crisis, it will be impossible for the company to meet the condition and if it does, there will be not enough tourists to fill up the rooms, according to Reyes.

“When the economy gets a little better, they can build the 200-room hotel,” the senator said.

It is also the responsibility of the government to ensure that public lands lease, once it is granted, should be free of impediments, Reyes pointed out, citing ongoing legal tussle on the Rota Resort’s case alleging encroachment into a private property.

“If there’s any land conflict, the government should handle this and correct it. I don’t think that we should harass developers.”

Reyes expressed dismay over request by BPL to defer voting by the Legislature on the extension after its chairman, Tomas B. Aldan, has warned them against undermining the government position.

“If there is any issue, this is not the time to be talking of technicality and to be pulling pages out of lease agreement,” he said. “Let’s get together, let’s be sensitive to the situation and let’s not talk about closing down business.”

He added that “as the government, we should be sensitive to that and if necessary… we should not be forcing developers to build a hotel that nobody is going to stay.”