The Department of Public Lands sent the owner of Hyatt Regency Saipan on Friday a draft agreement for a 40-year land lease based on their final negotiation on the hotel’s lease, which is due to expire in December 2021.
DPL Secretary Marianne Concepcion-Teregeyo told Saipan Tribune yesterday that the lease hasn’t been signed yet, but that DPL’s offer to Hyatt is 40 years.
This comes soon after DPL and Saipan Portopia representatives held a final meeting last Thursday.
In a letter to Nick Nishikawa, general manager of Saipan Portopia Hotel Corp., which does business as Hyatt Regency Saipan, Concepcion-Teregeyo asked him to review the draft agreement and indicate his acceptance so DPL can send him a final copy for his signature. Upon Nishikawa’s acceptance, DPL will publicize the notice of “intent to lease” within 15 days in local newspapers and DPL’s website.
She said any comments, suggestions, and other proposal submitted on or before the deadline will be reviewed for the approval of the lease. The secretary said DPL will forward the lease agreement to Attorney General Edward Manibusan for final review and approval. Following the AG’s approval, pending administrative items will be due and required for final processing.
The first item is Hyatt’s payment of $271,467 for the annual base rent based on 0.5% of the appraised market value for the first five-year period. Concepcion-Teregeyo said this fee is due upon signing of the agreement.
The second item is payment of $250,000 for security deposit, which is due upon execution of the lease agreement and shall be maintained for the duration of the lease term.
The secretary said funds remaining on account with DPL after the completion of the proposed development in excess of $250,000 shall be released to the lessee upon completion of the proposed development.
The third item is payment of a $500,000 construction bond for additional security deposit for construction/renovation costs. Concepcion-Teregeyo said this fee represents 5% of the total cost of the proposed project to which the lease pertains. These funds, she said, will be held by DPL to secure construction start-up and remediation costs. The secretary said this amount can be drawn down to use during construction.
The final item is evidence certifying Hyatt’s ability to procure liability insurance with a minimum coverage of $1 million, which must co-insure DPL and the CNMI government. Concepcion-Teregeyo said actual insurance policy will be due within 30 days of the lease start date.
Deveney Dela Cruz, special assistant to the DPL secretary, earlier stated that DPL received an official proposal packet from Hyatt’s current lessee, Saipan Portopia Hotel Corp., last Oct 20, but the package was incomplete. Saipan Portopia subsequently submitted a complete proposal packet.
Gov. Ralph DLG Torres had repeatedly stated that he would like to see Hyatt get the lease extension.
Hyatt’s 40-year public land lease will expire in December 2021. The land lease of Fiesta Resort & Spa, which is adjacent to Hyatt, has already secured a 40-year lease before the expiration of its lease in June 2021.
The recent enactment of Public Law 20-84 increases the terms of public land leases for up to 40 years, plus an extension of 15 years, for a total of 55 years. It also authorizes certain public land leases to be amended and extend existing lease terms up to 55 years.