That was the blunt question of Rep. Joseph Lee Pan Guerrero (R-Saipan) at a joint hearing of the House of Representatives Committee on Gaming and the Senate Committee on Cannabis & Gaming last week, during questioning of the Commonwealth Casino Commission. This come soon after the Commonwealth Utilities Corp. cut the casino licensee’s power supply at the hotel casino in Garapan and at other housing properties last month.
This is on top of the back-to-back cases filed by vendors against the IPI, among other cases, including the unanswered question as to where the community benefit fund the casino owes the CNMI people has gone.
In his response, CCC chair Edward C. Deleon Guerrero said, “As we speak today, the answer to you is, yes, they are, if you’re talking about today. I do not see the revenue there to pay the obligation.”
As for the actual figures in terms of IPI’s finances, CCC executive director Charlie Atalig said they are restricted, under CMC Section 2314, from disclosing that information. “It is a three-year felony for us to provide confidential information that we’re restricted. I would recommend maybe changing the law to allow us to provide that information,” he added.
Access to $500M
Deleon Guerrero said that CCC has been “very concerned since Day 1” about the financial suitability of IPI.
“When we look at the actual License Agreement, I do not see the actual financial statement that the Lottery Commission [received], when they granted the license to IPI. Any financial statement that proves that they are financially, and at that time, suitable, to launch a $2-billion investment or construct 2,000 new rooms,” he said.
The picture is different now, Deleon Guerrero said.
IPI has access to $500 million from Japanese investors, which he said the commission has reviewed, and deemed to be more than enough to see that the facility gets completed.
“Of that, I believe $165 million has already been dispersed. So again, putting aside the community benefit fund, it is our opinion, that if that loan facility were to proceed, and I understand there’s some problem right now with the COVID-19 pandemic and the remaining balance, it is our position that the owners are still committed to finishing [Imperial Pacific Resort],” he said.
Deleon Guerrero also noted that the licensee has “already spent over $700 million,” that construction has not stopped, and suggested for the lawmakers to go and see what it is currently being done at the construction site. “Based on the loan facility that we have been provided, if they keep the intent and purposes of that particular loan, there’s sufficient money there that IPI could actually complete the IPR.”
Aside from their court cases, the casino licensee is due to pay a $15.5-million license fee on Aug. 12, $3.1 million in regulatory fee fund, and $20 million in community benefit fund due in October.
Deleon Guerrero said that the CCC has been assured that the IPI board of directors is aware of those costs, and that, aside from the community benefit fund, they’re prepared to make the necessary exclusive license fee and the regulatory fee.
If Aug. 12 comes, and IPI does not pay the license fee, CCC will be mobilizing an investigation to make sure that payment has been made from Hong Kong, and from then, put measures in place, just as the commission has done last year, following a delay in the full payment of the license fee.
Last year, IPI paid the license fee 15 days late from the Aug. 12 cutoff, during which CCC imposed a $25,000 per day penalty on IPI, totaling $375,000, which went to the general fund.
As for the community benefit fund, IPI, according to Deleon Guerrero, is approaching it differently because they have taken the position that it was due 60 days after groundbreaking on Phase 1.
“They didn’t realize that Amendment No. 5 injected it earlier. They were under the impression that it was due when they do the Marpi. That is an ongoing discussion with them,” he said.
Minority leader Rep. Edwin K. Propst (Ind-Saipan), also questioned IPI’s capability to complete the casino hotel in Garapan, and called for the government not to grant it any public land or any other future projects until the casino hotel is done.
“It is a great injustice for them to start another project when that one is not done,” Propst said
CCC executive director Atalig recently filed a complaint with the commission, signed May 28, 2020, to suspend IPI’s license and to seek fines for the casino licensee’s failure to remit its obligations into the community benefit fund.