DPL issues notices of default, violations against IPI

Public Lands Secretary Teresita A. Santos has issued a notice of default and notice of violations against Imperial Pacific International (CNMI) LLC for breach of lease by failing to submit fire and damage insurance and liability insurance, among others.

In her letter to IPI president Lingli Cai last Wednesday, Santos gave IPI 30 days to cure the violations and stated that failure to cure will place IPI in automatic default of the land lease with DPL.

When asked for IPI’s comments yesterday, IPI director/manager Howyo Chi said they scheduled a meeting next week with DPL to address the issues.

If IPI fails to cure the violations, DPL will also be forced to take corrective action pursuant to Article 28 (remedies) of their lease, Santos said.

Pursuant to Article 28, upon termination of IPI’s right to use the premises, DPL may, 15 days after the written notice, enter the premises and take possession of all buildings, fixtures, and improvements except IPI’s removable personal property, trade fixtures and equipment and evict IPI without liability of trespass.

“It is hoped that this will not be necessary as a last resort in addressing this matter,” Santos told Cai in the letter.

She said DPL is giving notice to IPI that it is in default for failing to comply with the terms and conditions of their land lease agreement dated April 29, 2015.

The secretary said Article 19 of the lease provides that IPI “shall procure upon the completion of construction of the initial gaming facility, and maintain in force during the entire lease term or any extension thereof, fire and damage insurance of the premises in a company or companies authorized to do business in the NMI, with extended coverage endorsements jointly in the names of” IPI and DPL, covering the full insurable value of all permanent improvements on the premises, subject to appropriate co-insurance provisions.

To cure the violation of Article 19, Santos said IPI must submit to DPL within 30 days proof of valid fire and damage insurance for the premises with extended coverage endorsements.

Article 20 of the lease also provides that IPI shall procure commercial general liability insurance for the premises and operation. Santos said IPI must submit to DPL within 30 days proof of valid commercial general liability insurance for the premises and operation.

The secretary also found that IPI failed to submit government requirements, failed to use the premises for its stated purpose, failed to provide a copy of the CNMI Gross Revenue Tax monthly return, failed to provide annual reports and audit, mortgaging the property without express prior written DPL approval, and failed to use the premises for the purpose set forth in the lease for 90 days without DPL’s consent.