Mariana Resort & Spa, one of the longest standing Japanese-owned hotel resorts in the CNMI, will be holding off future investments, according to general manager Gloria Cavanagh.
The holding off on future investment follows the recent decision of the Department of Public Lands to solicit competitive bids instead of granting a new lease agreement to Mariana Resort, which has leased the Marpi property for the past 37 years.
Cavanagh, in an interview with Saipan Tribune, said 100 percent of their planned investments will be put on hold.
“Of course we want to make sure that we maintain the rooms and make sure that they are clean and it isn’t the fault of our guests on what’s happening, but in regards to major improvements; it’s zero,” Cavanagh said.
Last year, Marianas Resort eyed expansions of the hotel. Kan Pacific Saipan president Yoshihiro Kitami said they are planning to build a new game room, add more than 100 rooms, and set up new banquet facilities with the new lease they were led to believe was set in stone.
Kan Pacific owns the Marpi hotel.
At that same time, Cavanagh last year said that they were in discussions with DPL before any expansion was to push through. Last March, DPL secretary Pete A. Tenorio recommended alternative land leases to the Hotel Association of the Northern Mariana Islands
This would allow the hotels to get an extension on a portion of the public land that they are leasing now, which will entail legislative approval. One other alternative leasing agreement Tenorio suggested is where the hotels can terminate their respective leases and apply for another long-term lease.
However, Cavanagh now says that Marianas Resort will hold off the $30 million on the first phase of the planned projects.
“We will be holding it off because we have less than three years to spend that kind of money especially with the announcement of [DPL] that was issued with a policy,” she said.
“We haven’t submitted a formal response yet to DPL’s decision and decided that we will issue it formally some time this week,” she added.
Cavanagh, who is also the president of HANMI, expressed great concern that assurance to CNMI hoteliers was being “overlooked.”
HANMI former president and Hyatt Regency Saipan general manager Nick K. Nishikawa, in an email, said he was quite surprised to hear the statement from DPL regarding the public land leases.
“As a representative for one of the major companies on Saipan under a public land lease, I am concerned about the message that is being sent to investors. It is understandable that the government needs to maximize any investments; however, there should be consideration for the existing leaseholders,” Nishikawa said.
“Their contributions are much more than land rental as there are many investors that are actively involved with the community and have exceeded the conditions of their lease for more than 30 plus years during various difficult times. People tend to forget those difficult times when they are having a good time now,” he added.
He also said that if the consideration is not given then any investor would reasonably focus on their return on investment and not make additional contributions past their lease conditions.
“Although we enforce our brand standards, there could be current leaseholders that will not make any improvements in their properties during the latter part of their lease. This is detrimental to the industry as well as the local economy,” he said.
“That is all I would like to comment and I am slowly losing a hope for the CNMI,” he added.