Mariana Resort employees in limbo

The fate of 141 employees of Kan Pacific Saipan Ltd. is in limbo after the Kitami family opted to end its businesses in Marpi—the Mariana Resort & Spa and the Mariana Country Club, including the 50-meter Olympic-size swimming pool—marking the end of almost four decades of operation in the CNMI.

In a letter to employees last week, Kan Pacific president Yoshihiro Kitami said that they would be closing at the end of September.

Close to 30 employees, however, will be retained to continue with their new business ventures: Zen Teppanyaki restaurant in Garapan, the Mariana Lounge, and the Mariana Grand Service.

“It is with a heavy heart that I must inform you that [MRS] will be going out of business and shutting down our operations permanently this coming Sept. 30. As you are very well aware, Kan Pacific’s public land lease expired and was not granted an extension. Thus, we have no other option but to close down operations and vacate our Marpi premises and facilities,” Kitami said in the letter.

“Consequently, as difficult as it is, I must also inform you that you are being laid off effective Oct. 1, 2018. This layoff action is indefinite in duration and is permanent in nature. We appreciate all your contribution to the company. I regret that, because of events beyond [our] control, we are not able to continue operating and employing you. My best wishes for success in your future endeavors,” he added.

MRS general manager William Retardo said the Kitami family was left with no choice but to cease company operations as it had already incurred huge losses. “We can’t get any advance bookings since we don’t know when will the land lease be awarded to IPI.”

“If DPL gave us an extension until January, what will happen to us when…IPI…is finally awarded the land? We are in a difficult situation and the Kitami family was left with no choice but to close down. They had tried to maintain the business despite incurring huge losses in the past few months.”

There were also reports that IPI would absorb some of the MRS employees when they take over, but the plans of the casino-hotel investor have yet to be known. If this happens, Retardo said this would be welcome news since it would secure the employment of some of their employees. “It would be good news if it would push through. We’ll know if they finally take over the operations. Right now, we don’t know what their [IPI] plans are and if they are already processing the transfer of some of the employees.”

“IPI would need employees if it takes over Mariana Resort. It would be nice if they would retain the employees since their work is secured instead of finding work. It would be much better if they are retained by the company that would take over [MRS]. Hopefully that would happen before Sept. 29 so the employees won’t worry that much.”

Also included in the hotel operations are the restaurants, function rooms, Mandi Asian Spa, and fitness center.

It is not yet known if Marianas Trekking, a separate business that operates the go-kart racing facility and ATV tours, would also be affected.

Imperial Pacific International (CNMI) LLC is expected to take over the operations of MRS’ facilities, as it was the lone company that submitted a bid to the Department of Public Lands when the MRS lease expired this year.

IPI had asked the CNMI Lottery Commission to allow them to operate a less than five-star hotel since MRS could be considered a three-star facility. But CLC chair Mark Rabauliman said they only granted the extension request to complete the initial gaming facility.

“At this point, those were topics that were not relevant to the discussion for the extension. As they were some things that are down the road, they are still going through procurement processes or going through different agencies,” said Rabauliman, who added that IPI’s request to operate a less than five-star hotel is in DPL’s jurisdiction.

“We did not see the relation to the immediate task at hand, which is the deadline for the extension that was looming. They tabled those requests, they put in those requests but we did not see it fit. Those are dealing with DPL and the negotiations are between them. What they [DPL] might be requiring, I don’t know if we have to go back to the table.”

DPL and IPI are still negotiating and finalizing the terms of the takeover, with the former issuing a notice of intent to award the lands leased by Kan Pacific.
DPL issued the notice of intent to award to IPI on July 15, 2016, pursuant to RFP15-RED006 for the public lands in Marpi where the Mariana Resort & Spa is located.

DPL has not yet awarded the land and, once all issues are settled, the Legislature will have to sign the lease agreement since the property is larger than 50,000 square meters.