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New federal immigration rules could hurt hotel industry

SAIPAN, CNMI (Saipan Tribune, February 4, 2009) Placing CNMI immigration under federal control by June 1 will affect the operation of Tinian Dynasty Hotel and Casino and the business strategies of three other investors proposing to build a total of at least $540 million worth of casino resort projects, according to the Tinian Casino Gaming Control Commission.

Commission chair Francisco M. Borja told Saipan Tribune yesterday that it is "unfortunate" that Bridge Investment Group LLC is re-evaluating its $40 million to $50 million casino and condominiums project on the island because of federalization.

Mr. Borja said the commission was looking forward to Bridge Investment Group's construction as it would provide much needed jobs and business opportunities for local residents.

He said, however, that the commission understands and shares many of Bridge Investment Group's concerns as these same concerns will affect Tinian Dynasty and other casino applicants.

'Tougher times'

Alfred Yue, managing director of Tinian Dynasty Hotel and Casino, said Dynasty will face a tougher time once the new federal rules apply but it will maintain its operations.

"We have been doing business on Tinian for over 11 years. We are fighters and nothing will change us to keep up that spirit," Yue told Saipan Tribune in an e-mail.

The U.S. Department of Homeland Security's proposed regulations require Chinese and Russian tourists to secure a U.S. visa to enter the CNMI by June 1, 2009, unless extended.

Tinian's casino industry relies heavily on the Chinese market.

"The commission is hoping the Department of Homeland Security includes China in the Guam-CNMI Visa Waiver Program or at least delay the implementation date for 180 days to allow Bridge Investment Group, Tinian Dynasty, and the other casino applicants time to adjust their marketing strategies and business models," Borja said.

In the pipeline

Two other casino investors on Tinian, according to Borja, have indicated that they are still pursuing their casino projects.

Marianas Resort Development Corp. plans to build a $300 million Matua Bay Resort, while Neo Gold Wings Paradise Saipan Corp. plans to construct a $200 million hotel-casino.

"MRDC has informed the commission that they are currently working on finalizing their golf course design. Neo Gold Wings Paradise Corp. is currently in the process of working with DPL [Department of Public Lands] and the CNMI Legislature for the approval of their land lease agreement," said Borja.

Phillip Mendiola-Long, executive vice president of Bridge Investment Group-CNMI, earlier said they are now re-evaluating their plan to build a casino and condominiums project on Tinian based on the global economic crunch and the federal takeover of CNMI immigration by June.

He said Bridge Investment projects $92 million in annual Tinian tourist revenue because of their project but these "economic forecasts are based only on continued access to the China tourist market and any subsequent changes to the ease of access to that market will negatively impact these current projections."

Bridge Investment Group, which has halted construction at the project site, secured a license to operate a casino on Tinian in 2005.

It earlier planned to build a $200 million project on Tinian called Tinian Oceanview Resort and Casino, but scaled it down to $40 million-$50 million in early 2008.

Limited labor pool

Borja said the commission is also concerned about the limited labor pool once the federal government takes control of local immigration.

The casino industry is a labor-intensive industry and many positions in the casino require employees with unique and specialized skills.

A casino resort on Tinian may require as many as 600 to 900 employees, he said.

"If nonresident workers are restricted from working in the CNMI after June 1, 2009, the casino investors will face a huge challenge finding enough skilled and unskilled employees to staff the resort," Borja added.

Besides Borja, the other commission members are Peter Q. Cruz Jr., Ignacio K. Quichocho and Michael H. San Nicolas.

Tinian, which is allowed to have five casinos and relies heavily on Chinese tourists, has only one operating casino-the Tinian Dynasty Hotel and Casino.

Press secretary Charles P. Reyes Jr. earlier said the current casino projects show that the CNMI can attract investment capital if only the federal government allows it reasonable access to workers, tourists, investors and customers.

In related news, Dynasty officials recently met with members of the Tinian Legislative Delegation.

"It was a regular visit," Dynasty's Alfred Yue said. "They are always nice and always show concern about how they can help us and the people of Tinian. They are lawmakers; we gave them some suggestions how to improve the island and the gaming industry, and of course, things about federalization as well."

Saipan Tribune http://www.saipantribune.com

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