Legislature OKs Rota Resort lease extension

Legislators yesterday voted unanimously to grant for the third time a 15-year lease extension to the Rota Resort and Country Club aimed to bail out the financially-distressed company and help attract new investors to the tourists’ golf haven.

The move followed decision by the Board of Public Lands to endorse the additional 15 years on top of the initial 25-year lease agreement with its Japanese owner, SNM Corporation, that ended months of squabble on the prime property.

Senate President Paul A. Manglona called the deal “a light at the end of the tunnel,” in view of mounting appeals by the resort to provide the extension in its efforts to infuse much-needed fresh funds into its operations.

“We’re happy,” said Jonas Ogren, SNM sales and marketing manager, after a joint session of the House of Representatives and the Senate sealed the agreement — the result of three-month negotiations between the company and the Division of Public Lands.

“The Senate President really said it very well that this puts light at the end of the tunnel for us and there’s a lot of things that we want to do, including inviting and looking for potential new investors,” he added.

Under the Constitution, only 21 votes or three-fourths of the entire Legislature are needed to approve any public land lease accord, but all 24 members present during the joint session voted in favor of SNM’s request.

Company executives and public land officials are still expected to discuss unresolved issues over the original lease granted to the resort in 1990.

Henry Hofschneider, DPL deputy director, said forthcoming meetings would involve discussion on the conditions stipulated in the initial contract which have yet been met by SNM, including construction of a 200-room hotel.

But he considered the new deal “good. They can continue on with their operations. We don’t want to see them closed and this 15-year lease extension will give them the ability to come up with more financing,” Hofschneider told in an interview.

DPL has outstanding claims of at least $291,000 in unpaid rent and $180,000 in late fees, although the resort has claimed they have paid their dues since the agreement was enforced in 1991. SNM pays an annual lease of $136,000 to the division.

The 150-hectare lands they are occupying also have been a center of dispute between the government and a local family on charges of encroachment on private property within the resort’s 18-hole golf grounds.

While the joint panel of the House Natural Resources Committee and the Senate Resources, Economic Development and Programs Committee that had reviewed the request since May did not recommend solutions, they asked that these problems be resolved at least within six months.

In apparent attempt to sweeten the deal, Shigeru Fukuzawa, representative of SNM owner, pledged to retain the $30 green fees per round of golf play for local residents at least until 2005.

“In the interest of keeping our good relations with, and support of, the local golf community, the green fees will not be increased significantly after the first ten-year period,” he said in a July 12 letter to the panel.

Noting that others charge as much as $160, both Senate Floor Leader Pete P. Reyes and Rep. Melvin Faisao hailed the move which would give the youth an alternative hobby to keep them away from drugs.

This is the third time the government has provided extension to the initial lease agreement of the resort, but unlike the first two attempts, the resort this time was not asked to pay upfront to the municipal government of Rota as part of the condition.

Legislators from Rota had helped broker the new lease extension as they warned of potential disaster to the island’s economy if the resort — the only major tourist facility there — was forced to shut down due to declining revenues.