IPI’s $56M CBF is deferred
Atalig: IPI should be given time to revive casino industry
The Commonwealth Lottery Commission allowed Imperial Pacific International (CNMI) LLC on Friday to put off for three years its payment of the $20 million community benefit fund that was due last October.
During the CLC meeting held at the Commonwealth Casino Commission’s conference room at the Springs Plaza in Gualo Rai, CLC chair Mark Rabauliman and commissioners David DLG Atalig and Robert Guerrero also approved a five-year deferment of IPI’s current $36 million CBF liability for the last two years.
The commissioners came to that decision despite the opinion of the CLC legal counsel, assistant attorney general John P. Lowrey, who believes that the CLC is overstepping its authority. While enforcement authority lies with CCC in changing the relevant dates and times, Lowrey said that doing so while the CCC executive director’s case against IPI is still ongoing would be overstepping CLC’s authority. Lowrey said he believes it will probably end up being challenged in court.
“My view is that it would be better handled between IPI and the casino commission, then a negotiation between them, whether that takes the form of a settlement to a payment plan or something of that nature, rather than the Lottery Commission interjecting itself into an enforcement action that’s currently in front of another agency,” Lowrey said.
Atalig, who is also the CNMI Finance secretary, said his motion is to give IPI that flexibility for five years and, should it be challenged, then they will get challenged.
In the interest of minimizing CLC’s interference with CCC’s ongoing enforcement actions and since Atalig stated he doesn’t want to undermine the liabilities themselves but just to change the date of payment, Lowrey said that when CLC votes in favor of Atalig’s motion, CLC has to make it plain that its decision does not remove IPI’s responsibility to make the payments (that it allegedly has not paid), but is merely intended to chnage the collection date in the event of a decision against IPI by the CCC.
“That way at least removes some of the confusions that might get in there,” Lowrey said.
Commonwealth Lottery Commission chair Mark Rabauliman presides over a meeting with commissioners David DLG Atalig and Robert Guerrero in the Commonwealth Casino Commission’s conference room at Springs Plaza in Gualo Rai Friday morning. Also in the photo, fifth from left, is CLC’s counsel, assistant attorney general John P. Lowrey.
(FERDIE DE LA TORRE)
This prompted Rabauliman and Guerrero to agree and vote in favor of Atalig’s motion for deferment.
In an interview, Atalig said the first act that they did was to defer payment of the CBF starting this year 2020 for three years—or 60 days after completion of IPI’s Initial Gaming Facility in Garapan or whichever comes sooner.
He said if IPI doesn’t complete the project in three years, the $20 million in CBF is due from that date when the work is completed.
Atalig said the second motion that they approved is the deferment for five years of IPI’s current liability of $36 million from the last two years.
“If they pay sooner, great. What we’re trying to do is allow them the flexibility to use the funds they have or what they’re supposed to pay us to invest and finish the facility,” the secretary said.
Atalig said that in their last CLC meeting, they approved the six-month deferment of payment of the $20 million CBF that was due last October.
“So this one overrides that. Because we are deferring for three years and not six months,” he said.
Atalig said in the last CLC meeting, the agenda cited deferment using force majeure as a reason and that they were able to approve a six-month delay in payment of the $20 million CBF.
Force majeure refers to unforeseeable circumstances that prevent someone or business from fulfilling a contract.
He said in the last meeting, he was appointed to negotiate and finalize that with IPI. The secretary disclosed that in his meetings with IPI and CCC, they agreed or discussed that the benefit of this casino industry is to give IPI the flexibility, give them deferment of the $20 million for three years.
“Keep in mind, if and should IPI leave us or CCC revokes their license, how long will it be to get a new investor here to build a new facility and to even have casino activity to generate revenue for the CNMI government [to collect] taxes?” Atalig said.
Realistically, he said, that would be three years.
“We’d rather just give them that three years and have them work and finish the facility. We don’t want another La Fiesta,” said Atalig, referring to the abandoned La Fiesta Mall in San Roque.
Atalig said Lowrey’s opinion was that CLC was overstepping its authority because the CCC has an enforcement action against IPI. Atalig said he disagreed with Lowrey because CCC enforces what CLC decides in the casino license agreement.
He said CCC is the enforcer of the casino license agreement.
“So, I used the example as a taxpayer owing $10 million and the Legislature passes a bill and either allows them to defer it or allows them to eliminate it,” he said.
Atalig said his question to the legal counsel was what’s the difference between the enforcer collecting the money and the Legislature that created the law to allow the enforcer to collect it.
Atalig said that, with their decision Friday, when they finalize the ninth amendment to the casino license agreement, he will add language that states that it’s not overstepping the CCC’s actions.
“Our agreement will allow whatever actions CCC does. It is in sync with our decision in terms of the date collection,” Atalig pointed out.
He said Lowrey proposed no action at all.
“I told him I’m not a lawyer and if the CCC wants to challenge the Lottery Commission, that’s fine. Let’s do it then. But why hinder us today in making actions to hopefully revive this industry back again?” Atalig said.
What if IPI says the project is not completed and that they are not going to pay? Rabauliman asked.
Atalig noted that the casino license agreement has a definition of what construction completion means—that once the Department of Public Works gives the certification of occupancy, IPI is done.
“Then, 60 days later, we tell IPI, ‘You owe us $20 million.’ I’m not eliminating what they owe. I want that clear. They owe that. Our community deserves that. We suffered. They’re [going to] pay it. I’m just giving them time. Because, really, if they pack up and go, we’re not going to see it anyway,” Atalig said.