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MPLA rejects Verizon’s bid to extend Susupe lot lease
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Posted on May 16 2005
The Marianas Public Lands Authority has again rejected a request by the Micronesian Telecommunication Corp. for an extension of its Susupe facility lease.
Rather, the MPLA board of directors referred the matter back to Nicolas Nekai, chair of the board committee on resources and development, for further review.
MPLA chair Ana Demapan-Castro said MPLA had come up with a counter-offer for MTC and wanted further negotiation with the telecommunications company.
In an earlier interview, Demapan-Castro said the board was not satisfied by MTC’s proposal to be allowed to use the Verizon facility in Susupe at $83,000 per year. The amount represents a rental based on fair market value.
Demapan-Castro noted that the CNMI law states that lease rental payments should be 8 percent of the appraised fair market value or 3 percent of the lessee’s gross revenue, whichever is greater.
MTC is reportedly collecting total revenues of about $30 million a year.
But while MTC’s figure is far lower than 3 percent of $30 million—which is $900,000—the proposed $83,000 rental payment would be a significant increase over the present rate.
Pursuant to the original lease agreement signed during the Trust Territory period, MTC is currently paying $17,000 a year for its lease of the Susupe facility. The lease rental is paid at installments of $4,250 quarterly.
