Because of a dramatic decrease in funding, the Northern Marianas Housing Corp. intends to lease the North Garapan Subdivision property as a whole to potential investors.
NMHC director Jesse Palacios told Saipan Tribune that they have long been waiting to lease the 45-unit property to potential investors, but have been waiting for the Legislature to amend Public Law 6-34, the law that governs how NMHC leases its properties.
According Palacios’ formal testimony, Public Law 6-34 authorizes the housing agency to lease their properties for commercial developments, but this is subject to a couple of restrictions: That the potential investor is responsible for the relocation and replacement of the property before any developments take place, and the potential investor is required to pay an “upfront cash payment” to the NMHC.
The housing agency believes that these conditions hinder attempts to lease the property because the potential payments altogether would surpass the value of the property.
“The potential aggregate cost to the lessee far exceeds the appraised value of the subject property,” said Palacios.
Another one of the conditions under the public law is that the proceeds acquired from potential investors are restricted for use on Saipan only.
Senate Bill 20-07, Senate Draft 1 (SD1), proposes to amend or repeal specific provisions in Public Law 6-34 that have been hindering the lease of the North Garapan Subdivision property. The bill also proposes that the proceeds will be used CNMI-wide.
In an interview, Palacios argues that the leasing of the land is beneficial to the Marianas.
There have been unsolicited offers from potential investors that want to establish a shopping mall in the Marianas, another hotel, or other commercial developments that could benefit the island.
Palacios told Saipan Tribune that money acquired from these potential developments would fund the many projects under the housing agency like home loans, foreclosed property renovations, and more because according to his testimony, the housing corporation has been receiving less and less funding over the years from HUD, their primary source of funding.
Palacios also added that the leasing of the property could serve as a gateway to alleviate the shortage of housing that the island is currently facing. The proceeds from the lease will be used to meet the housing agency’s mission to deliver decent, safe, and sanitary housing to the entire Northern Marianas.