SAIPAN – The Northern Marianas government is proposing a new 40-year land lease agreement with Saipan Portopia Hotel Corp., which does business as Hyatt Regency Saipan.
Hyatt Regency Saipan's 40-year lease ends this December.
Nick Nishikawa, Hyatt Saipan general manager, received the lease offer from Department of Public Lands Secretary Marianne Concepcion-Teregeyo on Friday.
She asked him to review the 28-page draft lease.
The draft lease states an extension of up to 15 years may be granted with the approval of the Legislature.
The proposed annual rental schedule is as follows:
• Guaranteed annual minimum – 0.5% of fair market value
• 1% of business gross receipt
Concepcion-Teregeyo also informed Nishikawa that following the attorney general’s approval, these following items will be due and required for final processing:
• Payment of $271,467 for the annual base rent based on 0.5% of the appraised market value for the first five years
• Payment of $250,000 for security deposit
• Payment or construction bond of $500,000 for additional security deposit for construction/renovation costs.
• Evidence certifying the ability to procure liability insurance with a minimum coverage of $1 million in the aggregate which must co-insure DPL and the Commonwealth of the Northern Mariana Islands government
In an earlier statement, DPL said it was collecting a flat rate of $25,000 a year in basic rent from Hyatt, based on its initial fee simple appraisal, and approximately $300,000 a year in total when the business gross receipt was included.
The only international brand hotel in the CNMI, Hyatt as of last year employed 260 employees, 98% of whom were local, U.S. qualified workers, according to the Saipan Chamber of Commerce which supports the extension of Hyatt’s land lease agreement with DPL.
The Hotel Association of the Northern Mariana Islands, which also supports the Hyatt lease extension, noted that the hotel has “led the local hotel industry in the development and recruitment of local resident and U.S.-eligible workforce, even extending its expertise to assist other hotels and travel industry partners in increasing their own U.S.-eligible workforce.”
“This is the caliber of investor the Commonwealth needs to retain,” HANMI added.