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HANMI regains confidence in fate of hotels with expiring leases

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A Senate bill that extends the lease terms of public lands from 25 years to 40 years and would allow an extension of 15 years for a total of 55 years has revived the enthusiasm of the Hotel Association of the Northern Mariana Islands, as five of its members have leases that will expire in just a few years.

The measure, Senate Bill 20-35, passed the Senate last week on a 9-0 vote. It is now headed to the House of Representatives for action.

“HANMI is grateful to the Senate for taking up the critical issue of public land leases for some of the CNMI’s major hotels, a matter intended to provide stability for the growing industry,” said HANMI chair Gloria Cavanagh.

The bill believes that a longer leasehold term would encourage lending by investment and financial institutions to finance major projects that will, in turn, create new job opportunities and stimulate other economic activities in the Commonwealth.

The hotels that have expiring leases are Hyatt Regency Saipan, Fiesta Resort & Spa Saipan, Kanoa Resort, Pacific Islands Club Saipan, and Coral Ocean Point Resort Club.

Before the passage of the bill in the Senate, the fate of the five hotels was so uncertain—would the leases be renewed or not—prompting these hotels to suspend any improvement or renovation projects.

In a statement last June, Cavanagh pointed out that since there has been no assurance given to the hotels about their expiring leases, one of the hotels has stopped its renovation plans.

“One of the major hotels already has a plan to do a $25-million renovation in their property but because of the issues with Department of Public Lands, they halted because there was no assurance that they will still get the lease and earn their money back.” Cavanagh said.

With the current impetus of the bill in the Legislature, HANMI believes the measure is more attuned to the needs of the growing economy of the CNMI. Hotels—and tourism— are integral as the economic driver of the CNMI.

The bill expressly states that the amendment to extend public land leases up to 40 years does not automatically extend the terms of existing public land leases. Only existing public land leases with an existing hotel or golf course on the leased property may be amended to extend the existing lease term.

Cavanagh said, “There were a number of changes made in draft 3 of the bill which we are still reviewing in terms of impact on the affected hotels. Once the information has been gathered, HANMI will be sharing that.”

“In the meantime, we look forward to continuing to work with the House of Representatives on this important legislation,” she added.

Bea Cabrera

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