Laolao Bay project scaled down

With the current worldwide economic crisis, officials from the LaoLao Bay Golf Resort yesterday said they have concerns about completing the multi-million dollar resort project.

The project has been scaled down and the completion date pushed back to deal with the economic situation, said Yun Kim, president of the company.

“As you know, the big issue is fundraising,” he said.

When asked if the project will be completed he said, “I am worried about that, especially with the financial crisis all over the world,” he said.

“But we will try to finish, to complete the construction,” he added.

Tetsuya Matsunaga, director and general manager, agreed.

“In general, we will do our best,” he said.

In 2007, Asiana Airlines’s mother company, Kumho Asiana, acquired the sprawling LaoLao Bay Golf Resort in Kagman from its previous owner, United Micronesian Development Association.

The total investment to the resort has been reduced from $68 million to $60 million, Nearly $17 million has already been invested, Kim said.

The original date of completion was planned for July 1, 2009, but now Kim said the company is aiming for the end of 2009.

He said there are “fiscal issues” because of the declining value of the Korean won. Daewoo E&C, a subcontractor, exchanges Kumho’s Korean won to the U.S. dollar for construction.

The original plans for the resort have been scaled down to accommodate the economic obstacles.

The “golftel,” which will have two wings, has been scaled down from more than 100 condos to 73. It will stand eight stories on the west side and nine stories on the east side. There will now be five villas as opposed to the seven originally planned, and one clubhouse is being constructed instead of three. An existing clubhouse is being retrofitted to connect to the new clubhouse. It should be completed by the end of the month.

As originally planned, there will be a swimming pool and staff quarters. There will also be a tee house.

Portions of the golf course will be lengthened in an effort to attract professional golfers from Asia.

The company has found some creative ways to save money. For example, several banisters in the clubhouse are painted to look like they are created out of marble, when they are in fact concrete. Painters were brought in to create the look of marble.

Charles Reyes, press secretary for the Governor’s Office, said the administration was not expecting the project to be scaled down but understands given the economic situation.

“I suppose that’s not what we expected,” Reyes said. “Of course, we want as much investment as expected, but we understand the depreciation of the won…has impacted the project.”

That it is why it is imperative the government provide as many incentives to investors as possible, he added.

The news of the scale back is “a further illustration of our concern” about the resolution proposed by Rep. Ray N. Yumul, urging the Commonwealth Development Authority to deny a request to add benefits under the qualifying certificate program to Saipan LauLau Development, a subsidiary of Kumho Asiana.

Kim said he was surprised by Yumul’s legislation and that much of the information in the legislation was inaccurate. Kim said the company has not been given relief from all applicable taxes except for alcohol, as Yumul stated.

Saipan Laulau must also contribute $150,000 to public health and education every year for 25 years before receiving the tax rebate. Kim said if sales numbers increase over the past three years there would be a rebate.

“If business is no good, no rebate,” he added.

Kim said he appreciates that the CNMI administration is trying to help.

“This is a very good project for the CNMI to invest in outside investors,” he said.