The Commonwealth Ports Authority and the Star Marianas Air Inc. agreed yesterday during a meeting before the Senate to sit down and finally resolve their lease dispute, which first began in 2012 and continues to this day. <\/p>\n
With both parties appearing before Tinian and Rota senators yesterday, Sen. Victor B. Hocog (R-Rota) was able to wring a commitment from both SMA president Bob Christian and CPA chair Kimberlyn King-Hinds to sit down and try to resolve their differences.<\/p>\n
Hocog said their main concern is the provision of essential air service on Rota and Tinian. \u201cBecause if there\u2019s no airplane, what\u2019s going to happen? We\u2019re [going to] swim from Rota to Saipan?\u201d Hocog asked.<\/p>\n
Hocog said he called for the meeting to help resolve the problem after Christian told him about the dispute and that he can \u201cturn off the engine and not move it.\u201d<\/p>\n
That dispute between CPA and SMA began in 2012 when CPA tried to collect on $2.6 million that it says SMA owes CPA in unpaid passenger facility charges. SMA, on the other hand, alleges that CPA imposes excessive charges that are not based on fair market value, CPA\u2019s operational costs, or the weight of SMA\u2019s aircraft.<\/p>\n
Aside from King-Hinds and Christian, others at the Senate meeting were CPA legal counsel Robert T. Torres and SMA counsel Mark Scoggins. On the Senate side were Hocog, Senate President Jude U. Hofschneider (R-Tinian), and Sens. Francisco Dela Cruz (R-Tinian) and Karl King Nabors (R-Tinian). <\/p>\n
Scoggins said they are ready to sit down with CPA to resolve their dispute whenever CPA is ready. <\/p>\n
\u201cWe\u2019re ready to start the process whenever CPA is ready,\u201d Scoggins said. Torres readily answered they are.<\/p>\n
Hocog then asked Christian is he is willing to sit down with CPA, to which Christian replied they always have been.<\/p>\n
Hocog then asked King-Hinds if she is willing to sit down with SMA. King-Hinds said she stated it already three or five times in a span of 10 minutes. <\/p>\n
\u201cSo we are good. That\u2019s all,\u201d Hocog said.<\/p>\n
According to Torres in his report to the Senate, SMA and CPA executed an Airline Use Agreement and Use of Premises in 2009. The agreement provides the parties\u2019 obligations to multiple areas throughout the airport and addresses how the lease is paid. <\/p>\n
Torres said unlike a typical lease agreement that requires a tenant to pay an annual or monthly rent, CPA requires its airlines tenants to pay charges and fees based off of CPA\u2019s cost of the facility or service provided to and used by the airline.<\/p>\n
Because air carriers pay charges based off CPA\u2019s cost of the facility, Torres said, it is unknown what those costs actually are until they are accrued.<\/p>\n
The agreement addresses this issue by first requiring air carriers to pay an approximated rate based off of CPA\u2019s proposed annual budget.<\/p>\n
SMA has also accused CPA of violating the Anti Head Tax Act by charging head taxes on passengers traveling through its airports.<\/p>\n
SMA complaints, among other issues, include CPA\u2019s alleged economic discrimination by failing to provide an analysis of its landing fee charges between fiscal years 2009 to 2014.<\/p>\n
Torres said Federal Aviation Administration has determined that it is satisfied that CPA is in compliance and that its current rates and methodology is transparent and reasonable.<\/p>\n
Torres said U.S. District Court for the NMI and the FAA have repeatedly dismissed SMA\u2019s \u201cunfounded complaints.\u201d<\/p>\n
In December 2020, SMA sued CPA in the Superior Court, alleging breach of contract. CPA filed a motion to dismiss and the matter is set to be heard in April 2021. <\/p>\n
At the Senate meeting, Christian said CPA recognizes that SMA continues to deliver a good level of service. <\/p>\n
\u201cWe\u2019re here, we\u2019ve made a commitment to the community,\u201d he said.<\/p>\n
Christian said what he is asking is that their contract with CPA to be followed. \u201cWhat we\u2019re not happy with is a number of violations that we believe are blatant in that contract,\u201d he said.<\/p>\n
Christian said that, among other issues, the ports\u2019 security issues haven\u2019t been updated since 1992. \u201cWe\u2019d like to help you with those. But in order to help with those, we\u2019ve got to really change the attitude between the way the port treats us as a tenant and our ideas and their role and responsibility as a government entity. We\u2019ve got to rid of the hostilities,\u201d Christian said.<\/p>\n
Torres said CPA\u2019s position is Star Marianas owes $2.6 million in fees. <\/p>\n
\u201cWe have fundamental disagreements but those fees is $2.6 million that we assert are due,\u201d Torres said. <\/p>\n
Torres pointed out that this dispute has been on the books for several years and that CPA is committed to good faith resolution.<\/p>\n
Christian said CPA mentioned $2.6 million, but they can\u2019t even produce one billing statement that shows it. \u201cLet\u2019s get a third party,\u201d he said. <\/p>\n
Torres said if SMA wants the Senate to have an oversight that\u2019s their prerogative. \u201cI don\u2019t think what the Senate is looking for is to oversight everyone. What the Senate is looking for is a resolution,\u201d he said.
\nTorres said what they represent to SMA is that they are absolutely committed to resolution, with each one of the tenants in every way.<\/p>\n
King-Hinds said sitting before the senators and basically Christian rehashing his view \u201cis not trying to win hearts and minds here.\u201d \u201cIt\u2019s supposed to be \u2018meet me halfway,\u2019 you meet me halfway. But it seems that\u2019s not what\u2019s happening. There are steps and your attorney knows what the steps are,\u201d King-Hinds said.<\/p>\n","protected":false},"excerpt":{"rendered":"
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