‘RFP terms were not feasible for Kan Pacific’

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Posted on Sep 05 2018

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Kan Pacific Saipan Ltd. said in a statement that the terms of the request for proposal released by the Department of Public Lands were not feasible for them to submit their own bid that could have extended their land lease of the Marpi properties.

KPS leased the more than 50,000-square-meter Marpi land for 40 years, with facilities that included a 50-meter Olympic-size swimming pool, baseball field, hotel and spa, and the 18-hole Mariana Country Club golf course.

That 40-year lease agreement expired on April 30 this year. DPL issued an RFP to see if there are other businesses or investors that are interested in the properties.

“If it were not for the CNMI law that limits lease terms for 40 years, KPS would have gladly continued operating the resort for many years to come. However, because of that limit, KPS was no longer able to lease the resort property,” it said in the statement.

“DPL issued an RFP to obtain proposals for the leasing of the property under conditions that made it impossible for KPS to submit a proposal. Imperial Pacific [International (CNMI) LLC] was the lone party to submit a proposal.”

IPI had shown interest in leasing the Marpi properties where it hopes to build Phase I and II of its multi-billion dollar investment on Saipan, which included the still-to-be finished initial gaming facility in Garapan.

DPL Secretary Marianne Teregeyo told Saipan Tribune in an earlier interview that they had already issued a notice of intent to award. However, the actual lease agreement had not been finalized yet, hence the permit to allow an extension so KPS could continue its operations.

Its statement said that KPS was under the impression that, even before its lease agreement was terminated, there would be a delay in awarding the lease to IPI, with even not being awarded also a possibility.

“It appeared that if a lease was going to be awarded to [IPI], it was going to take a substantial period of time for that to happen and there appeared to be no immediate plan for anyone to take over the operations of [MRS] after the expirations of [KPS’] lease,” it said.

“[KPS] informed DPL that [we’re] willing to operate the resort for the next one or two or three years on the same terms as its then current lease, subject to 90 days notice of termination.”

DPL, however, did not agree with KPS’ proposals and again issued another RFP, this time for a management agreement for the operations of the hotel resort.

KPS said the terms of the RFP were restrictive and does not allow adequate compensation to justify the responsible operation of MRS that included a guarantee of a yearly amount of money paid to DPL.

“The terms of the RFP were not realistic or feasible for KPS. KPS was not in a position to submit a proposal. The RFP also stated that if a management agreement was awarded, [KPS] would be given 30 days notice of termination upon the acceptance of a proposal,” KPS’ statement said.

They said that they also informed DPL numerous times that the 30-day notice of termination is not enough for them to vacate the premises. “Such a short period would not allow for the continuation of the taking of reservations into the future, and would not allow sufficient time for KPS to remove its many items of personal property from the premises after discontinuing its operation of the resort.”

“KPS reiterated its willingness to continue operating the resort subject to a 90-day termination notice, and eventually even expressed willingness to accept a shorter period for such notice of termination. However, [KPS’s] offer was not accepted. Knowing that [KPS] operations of the resort could be terminated on a mere 30-day notice, [KPS] was no longer able to take reservations into the future.”

KPS added that the Kitami family was sensitive to the needs of their employees as they would also need time to find other work opportunities. “The Kitami family certainly wanted to continue operating [MRS]. …“KPS operated the public swimming pool for nearly 30 years, has long maintained local discounts to golfers and to patrons of Mandi Asian Spa, and has continuously provided a wide variety of community services.”

KPS, the statement added, has also conducted business in the CNMI in an honorable and decent manner by timely paying its rent and taxes, consistently hiring and training local workers, and providing excellent services and products to all its customers.

“KPS has enjoyed contributing to the CNMI community throughout its operation of the [MRS] and did not want its contributions to end. However, it has finally become too impractical to continue. So, it is with reluctant and very heavy heart that [KPS] and the Kitami family must discontinue operating [MRS].”

Jon Perez | Reporter
Jon Perez began his writing career as a sports reporter in the Philippines where he has covered local and international events. He became a news writer when he joined media network ABS-CBN. He joined the weekly DAWN, University of the East’s student newspaper, while in college.

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