Saipan Laulau sale to UMDA nears completion

The Saipan Laulau Development Inc. may soon seal its sale to the United Micronesian Development Association, with the Marianas Public Lands Authority’s expected approval of SLDI’s request for a lease assignment transfer.

MPLA chair Ana Demapan-Castro said Tuesday that the agency has received all the financial documents it had required from both companies.

The MPLA board of directors, she added, will hold a special meeting, scheduled tentatively for Friday, to accommodate the lease transfer request.

The board in a regular meeting on Rota last Friday deferred action on the matter, as members had some questions regarding the documents submitted by UMDA. Specifically, the board needed to review UMDA’s limited liability corporation papers before it could grant its final approval.

As part of the conditional approval given to UMDA in January, the MPLA board directed management to conduct a review to ensure compliance with the master lease and the corresponding amendments, and a background check on UMDA.

Further, the board required that UMDA assume all of Saipan Laulau’s lease-related obligations and liabilities within 90 days from Jan. 5.

The original lease for the property was signed between the then Marianas Public Land Corporation and S.C. Properties (Saipan) Inc. on Oct. 13, 1989. The lease was assigned to Saipan Laulau on Aug. 5, 1993.

According to the lease agreement, the leased should not sublease, assign, or transfer all or any part of its interest in the lease agreement without the written approval of the MPLA board.

Suffering from the downturn in the CNMI tourism industry, Saipan Laulau is reported to be selling the company to UMDA at a loss of about $50 million.

Saipan Laulau vice president Hiroyuki Saito said in an earlier interview that the company has invested a total of $61 million in the Laolao Bay Golf Resort in Kagman. The purchase deal, however, is reported to cost between $8.5 million and $10 million only.

“It’s been difficult for us to continue investing in this business because the shareholders would not allow this. At the same time, we wanted to leave a legacy to the Commonwealth. When we were looking for a buyer, we recognized that the UMDA is a local company and the government is a major shareholder. We believe a transaction with them would be for the benefit of the CNMI. They could turn Laolao into the CNMI’s first locally-run golf course,” Saito had said.