Committee backs Flame Sako lease

Despite earlier concerns about the planned Flame Sako Resort in As Matius, a joint House and Senate committee is recommending the Legislature approve the 25-year land lease for the multi-million dollar resort.

After looking at a draft lease, some members of the Legislature had questions, such as financing sources, and whether work can begin within six months after the lease is signed, said Rep. Ramon Tetuteb, chairman of the House Committee on Natural Resources. But after meeting with Department of Public Lands Secretary John S. Del Rosario about issues relating to the project, the committee is recommending the lease be approved.

Under the NMI Constitution, the Legislature in a joint session must approve any land lease that is more than five hectares.

According to the resolution, the proposed development, which is estimated to carry a price tag of $50 to $60 million, will contribute substantially to the future economy of Saipan because it will provide jobs, open a wide-range of service-oriented businesses and bring economic development to the CNMI. Testimony received during a public hearing was generally positive, the resolution stated.

Under the lease, Flame Sako would pay DPL $52,320 for the first year. The amount would increase to $78,840 by the fifth year of the lease. The alternative would be to pay 3 percent of the gross receipts. After the initial five years, the company must pay based on a percentage of the fair market value. In the sixth year, the resort’s owners must pay 4 percent of the fair market value or 3 percent of the gross receipts. By the end of the lease period, Flame Sako must pay 8 percent of the fair market value or 3 percent of the gross receipts—whichever is greater.

The company has until April 30 to secure financing for the project. Within six months of the lease being approved, permits for the development must be obtained and construction must begin.

Also, the resort must sell 10 percent of its corporate shares to the people of the CNMI through a public offering and maintain at its own cost any historic or archeological objects on site. Moreover, Flame Sako must construct public access areas to the shoreline along its premises. The boundaries of the hotel along PauPau Beach were a concern among some community members, Tetuteb earlier said.

The 357-room resort covering 109,003 square meters will include hotel rooms, villas, a convention center, sea restaurant, water park, marine port and yacht basin.