World Resort to re-apply for new QC

World Resort Saipan will surrender its existing qualifying certificate and re-apply for a new one, in the hope of getting more tax benefits for the additional $4 million the hotel plans to put into its expansion project.

Although filing a new application would take at least four months to process, World Resort special project manager Kyong Won Lee said having a consolidated qualifying certificate would prove more convenient for the hotel than complying with the requirements of two separate QCs.

On Aug. 31, 2004, Gov. Juan N. Babauta signed a qualifying certificate granting World Resort total tax rebates of $4 million over a 10-year period. This was based on the hotel’s February 2004 expansion plan, which had an estimated cost of $14 million.

But last month, World Resort announced that it planned to make an extra $4-million investment.

The hotel initially wanted an amendment to its original QC. But since no law allows the Commonwealth Development Authority to amend an already issued QC, World Resort opted to cancel the original and redo the entire application process.

“We were given two options: apply for a new QC or apply for a second one. If we do the second option, we will have two different QCs. Compliance will be a little complicated. We decided that it would be easier to re-apply,” said Lee.

At yesterday’s board meeting, CDA chair Sixto Igisomar stressed that World Resort should be required to submit a complete documentation of what the hotel had spent so far on the project, to ensure that this would be excluded from the new application.

Igisomar maintained that a qualifying certificate was “an incentive to move forward” and should not cover investments already made.

In a presentation at last month’s CDA board meeting, World Resort general manager B.K. Park disclosed that the hotel was planning to spend an extra $4.16 million for additional facilities.

The hotel is looking at building a kids’ club to attract the family market and a 25-meter national standard race pool to allow the hotel to host swimming competitions and possibly, athletes that would be training for 2008 Beijing Olympics, Park said.

The two projects have estimated costs of $900,000 and $910,000, respectively.

Also included in the amended plan is a $1.85 million outdoor stage, which is intended to be a venue for cultural, as well as wholesome, nighttime activities.

World Resort estimates other related expenses to reach $500,000.

Park maintained that the new facilities could bring additional revenues of over $10 million a year, once they are completed.

World Resort projected that the three facilities would result in a 1.5-percent increase in Japanese arrivals, which totaled 382,000 in 2004.