Race against time on casino deal
Negotiations for an initial $2 billion casino development agreement are racing against time, with Lottery Commission chair Sixto Igisomar telling Saipan Tribune yesterday that the $30 million held in escrow would be released by the bank on Aug. 1 to its original owners—the license applicants—if an exclusive casino license is not granted this week.
This means the Lottery Commission and Best Sunshine would have to wrap up their negotiations this week, unless the parties agree to amend the escrow agreement with Bank of Guam anew.
Igisomar said they are now reviewing a “draft casino development agreement” that could be finalized as early as today.
“Generally, the negotiation between the Lottery Commission and Best Sunshine is moving and so far, things are favorable,” Igisomar, also the Commerce secretary, said in an interview at his office on Capital Hill.
He said there is “an Aug. 1 deadline” they are trying to meet.
“I believe on Aug. 1st, this Friday, if there is no decision on full award [of a license], then the funds will be released by the bank back to the owners of the fund,” Igisomar said.
The $30 million held in escrow—a contractual arrangement in which a third party, in this case Bank of Guam, receives and disburses funds or documents for the primary transacting parties—represents a two-year advance annual casino license fee.
Best Sunshine and Marianas Stars Entertainment Inc. each deposited $30 million in escrow as part of the casino license application process, on top of a $1 million nonrefundable application fee that they each paid.
That $30 million will be used to pay retirees’ deferred 25-percent pension and pay the interest on former defined benefit plan members’ withdrawn contribution.
Acting Senate president Victor Hocog (R-Rota) conceded yesterday that while the casino license negotiations are about to wrap up, the retirement settlement fund trustee has yet to release the specific breakdown for the $2.9 million representing the deferred 25-percent pension payment for off-island residents or retirees.
The Rota and Tinian Legislative Delegations have to appropriate funds for the distribution of the deferred pension.
Trustee Civille & Tang said an estimated $11.05 million of the total $16.4 million is for Saipan residents or retirees, while $1.35 million is for Rota residents and $1.05 million is for Tinian residents. The remaining $2.95 million is for off-island residents or retirees.
“The delegations would have wanted the trustee to disburse the funds since they’re the ones disbursing the 75 percent. But we need to know the breakdown for the $2.95 million so we can make specific appropriations for the 25-percent pension and other programs in our senatorial districts,” Hocog said in a separate interview.
As of yesterday, there is still no telling whether Civille & Tang or the CNMI Department of Finance would process the payments.
Moreover, the Lottery Commission and Best Sunshine negotiations face some sticky issues, it was learned. These include the location of the hotels and casinos.
During an executive session last week, the commission called in Best Sunshine for new and follow-up questions related to the integrated casino resort development.
The four-member Lottery Commission gave Best Sunshine on July 15 a conditional approval for a casino license, pending negotiations and the signing of a casino development agreement.
Best Sunshine was chosen over Marianas Stars Entertainment Inc. for the exclusive development of an integrated casino resort on Saipan with at least 2,000 rooms that should be built from the ground up, and a minimum investment of $2 billion.
“It is still an active, ongoing engagement between the commission and Best Sunshine,” Igisomar added.
Sixto must not be much of a poker player…. Instead of freaking out over the potential that escrow will end, he should be playing hard ball and telling them they loose the leverage the 30mil gives them, and that he’ll adopt emergency regulations upping the ante if they want to re-apply and continue pursuing the license after the 1st. Alternatively, Best Sunshine can agree now to a 30 day extension… Amateurs!
I am telling you, this is all a set up to ask for a downscale. They are promising to pay utility bills to get the general public behind them so they can get full public support. They first hint bits of problems that they may be encountering then the CUC payment offer, and now this. They are discussing and there is a stickler on sites yet there is no involvement with public lands and zoning. Something drastic is going to happen after the agreement is done when they finally find that none of their agreement is agreeable with any of the permitting agencies. Then again, I may be just reading too much into this and I end up being PERFECTLY wrong…LOL!
Yup!