House panel looks into IT&E land-lease extension

THE House Committee on Natural Resources is now reviewing the proposed land-lease extension of IT&E and is seeking more information about it from the Department of Public Lands and the Attorney General’s Office.

Committee Chairwoman Alice Igitol during a meeting on Wednesday “tabled” the IT&E’s land-lease extension for further discussion, saying they will wait for the AG’s opinion and DPL’s response to the letter sent by Igitol.

She said the purpose of her letter was to clarify certain issues so that her committee can evaluate the lease-extension proposal based on accurate information.

Alice Igitol

She wants DPL to address each of the issues she raised in her letter in detail and in writing.

“After receiving your response, I hope to be able to make a reasonable and intelligent recommendations to the Joint Committee,” Igitol said in her letter to DPL Secretary Marianne Teregeyo.

Igitol noted that the current proposed land-lease agreement lacks gross receipts rental and a new appraisal. She said it also indicated a 40-year term of the lease when it is supposed to be an additional 15-year extension of the original lease that was executed on Sept. 1, 1990.

She also wants to know whether the term to use is “renewal” or “extension” and why the proposed contract was not signed by DPL or IT&E.

“At this point, the committee can only review an un-executed document that is not legally binding upon any party whatsoever because it is un-signed. Once the parties indicate that the lease represents their final agreement by executing the lease, the committee can then decide if the lease is worthy of approval or not,” Igitol added in her letter.

“The assertion by the DPL secretary that she cannot execute the lease until after it is approved is not well taken. The House and the Senate joint committee should also be able to review a lease that is legally capable of being approved and not one that is still unexecuted and subject to last-minute changes. If the joint House and Senate committee deems the lease to be deficient the signatures are not legally binding anyhow, but if the House and Senate wish to approve the lease, the final official copy should be approved, not a preliminary unsigned draft. These are the main issues that must be resolved at this point,” Igitol said.

IT&E’s 25-year land lease with DPL expired in 2015. Bank of Guam and CMS’s similar 25-year land leases with DPL have also expired.

Under the law they can extend the leases for another 15 years, for a total of 40 years.

BOG and CMS’ 15-year extension has already been approved by the Legislature.

House legal counsel Joe Taijeron said the BOG and CMS land-lease extensions for 15 years were approved expeditiously because their contract agreement indicated new appraisals and they both agreed to pay the rent plus a percentage of the gross receipts or BGRT.

Taijeron said BOG’s leased property, the parking lot, is not generating revenue, but it agreed to pay a certain percentage of BGRT on top of their rental fee, the same as CMS.

He said in the case of IT&E, it is only paying a rental fee amounting to $4,000, “a rate which was based on the market value 25 years ago, and nothing else.”

The committee said IT&E is generating revenues so it is fair to require it to pay a new rental fee based on the current market value.

The committee wants IT&E to pay an updated rent plus 6 percent of the gross receipts or BGRT.

Asked for comment, IT&E general counsel Steven Carrara said:

“For more than 25 years, IT&E has been a compliant lessee to the Department of Public Lands, the official contracting agency under the CNMI government. As part of the agreement, we acquired independent appraisals for the properties to determine fair market value and to identify a basis for its rental value. Based on the appraisals, both parties agreed to the fair market value proposed by Department of Public Lands. During the appraisal period, our economy was thriving as a result of the garment and tourism industries, driving property values to almost double when compared to 2009 and 2015 appraisals.   In some instances the appraisal value rose and in others it decreased thus impacting the applicable rent. We remain compliant and committed to working alongside our government partners on all public land leases.”

Source: Marianas Variety :

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