$70 MILLION RESORT PROJECT OKED ON SAIPAN

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By Gemma Q. Casas

SAIPAN, CNMI (Marianas Variety, Dec. 3) – The Japanese and local business communities are upbeat over Kumho Asiana’s new investment in the commonwealth, saying it will help the islands’ struggling tourism industry.

On Friday, the Legislature approved Kumho Asiana’s new 40-year lease term agreement with the Department of Public Lands on a 16-hectare public property in Kagman where it envisions investing $70 million in worth private residences, hotels, villas, medical facilities, a modern golf course, and related facilities.

All 18 members of the House and the eight present members of the Senate adopted Joint Resolution No. 15-7 which recognizes that DPL’s existing lease agreement with Kumho’s predecessor in connection with the ownership of LaoLao Bay Golf Resort, United Micronesia Development Authority, is terminated.

Kumho, as the new owner of LaoLao Bay Golf Resort, is granted a new 25-year lease term on the said public property.

The Legislature separately adopted Joint Resolution No. 15-8 which granted Kumho another 15-year lease term on the public land in question, bringing to 40 years the term of its leasehold.

DPL will be paid more than $100,000 in base rent for the 16-hectare public property annually.

The House minority earlier raised questions about such an arrangement amid fears that the cash-strapped government was on the losing end of the bargain.

In the end, however, it was persuaded to support the new lease amid the investor’s promise of more flights, and other investments in the islands.

Upbeat and blessed

Sun Don Jhung, president of Saipan Laulau Development, a subsidiary of Kumho Asiana in charge of LaoLao Bay, expressed thanks to the lawmakers for finally approving the firm’s request for a new lease.

"Thank you everyone for approving this lease," he said.

Kumho Asiana bought Laolao from UMDA for $16.6 million in March, almost double the price UMDA paid for the property in 2005, which it acquired from its original Japanese owners.

Jhung said their office is now working on various local and federal permits so that the construction phase can begin before the year is over.

He said they want the project to be completed by July of 2009.

"Our construction period will be 17 months," he said.

Gov. Benigno R. Fitial said the CNMI is blessed by Kumho’s interest to develop the islands as a major tourism destination among Koreans and the local tourist industry’s other markets.

"We are very blessed. The CNMI is truly blessed by the commitment that Kumho Asiana has made to expand its investments in the CNMI," the governor said.

"This is the type of investment that will help bring in more investments. It will bring in more people….It will create more employment for our people," he added.

Jerry Tan, Marianas Visitors Authority board chairman, said Kumho’s decision is a major boost to the islands’ tourism industry.

"This is huge. With Kumho Asiana able to extend its investment in the commonwealth, I think it’s very certain that we can see continuing increase on flights from the entire Korea… our second largest market, which will play a hero in our recovery efforts," he said.

"We are very, very grateful to the Legislature for approving it and of course, Kumho Asiana for the investment," he added.

Yoichi Matsumura, general manager of Pacific Development Inc., one of the first Japanese tour companies to expand on the islands, said they are also happy over Kumho Asiana’s expansion.

"This is good for the CNMI tourism industry," he told Variety.

Juan Guerrero, the outgoing president of the Saipan Chamber of Commerce, said the biggest contribution of such deal is that more flights would be coming from South Korea to Saipan.

He said that would tremendously help many hotels on the islands, particularly in Saipan, which had been suffering from low occupancy rate since Japan Airlines abandoned the route in late 2005.

"The more flights we have, the more revenue we have for the CNMI. As you know, the hotel occupancy of our hotels is below 60 percent. And they do need a boost. How the government will benefit from this? More hotel tax will be paid. Landing fees will be paid. Excise tax in the construction industry. More jobs will be generated. This is a very positive thing," he said.

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