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Extended lease, $2.4 million government loan sweeten deal

By Maureen N. Maratita

HAGATNA, Guam (Marianas Business Journal, July 20, 2009) – Palau's Aman Resort is one step nearer to actuality, with approval of a permit from Palau's Environmental Quality Protection Board for the company that will build the resort for Aman.

However, the EQPB told the Journal on July 14, "Permit issuance is pending the submission of revised project phasing."

The Aman Resort will be on the site of the former Nikko Hotel Palau in Ngermid.

The permit was issued on June 10 to PHC Co. (Palau) Ltd., whose owners are Harukichi Kurachi and Shimpei Kurachi, and Surangel & Sons Co.

The National Development Bank of Palau has made a $2.4 million loan to PHC for the project, according to the bank.

Harukichi Kurachi was the president of Nihon Anodizing Co. Ltd., which owned the hotel on the property when it was the Nikko Hotel Palau. The Nikko replaced an earlier establishment, the Continental Hotel, which had been built in part to house airline crews.

JAL Hotels Co. Ltd. --established in 1970 as a subsidiary of Japan Airlines - withdrew from a number of Nikko hotels around the region and elsewhere. The 51-room Nikko Palau closed on May 31, 2002. It originally opened in October 1981.

Surangel & Sons will be constructing the Aman, at an estimated cost of $20 million.

The property is owned by the Koror State Public Land Authority, and the leasehold area measures about 49,490 square meters.

EQPB said, "The proposed project will consist of the following: 16 overland guest pavilions, spa consisting of reception/consultation/lounge area, finishing studio, yoga pavilion, tepidarium and four treatment rooms, lawn and parking spaces."

Additionally, EQPB said, approval was given for "back of house - consisting of an administration office building, laundry/housekeeping building, store/shop, engineering/maintenance building, staff barracks and parking spaces," and a "main lodge consisting of reception and lounge/library building, courtyard, boutique, bar and lounge."

However, EQPB said, approval was not given for eight over-water units.

"The approval was only for the overland structures. It will not include the eight units of over-water guest pavilions unless and until the water is reclassified." The water would need to be reclassified for recreation and activities.

Aman, headquartered in Singapore, had initially intended to break ground in June of this year, but Journal sources said that the questions on the design of the property had delayed that and therefore, environmental approval.

Engineers GK2 Inc. of Palau are overseeing construction, with Terangue "Tiger" Gillham managing the project for PHC.

The first of a chain of, presently, 22 low-density, high-end resorts - Amanpuri - opened in Phuket about 20 years ago. Aman Resorts claims to have concern not to disturb the environment where its resorts are located. The assumption is that the Aman in Palau will mirror other Aman resort rates, which can reach $1,000 per night, and attract a celebrity and wealthy clientele. According to its Web site, Aman Resorts "received the highest ranking in the World's Best Hotel Chain & Marketing Group in Zagat World's Top Hotels, Resorts and Spas, 2009/2010 edition.

Another upcoming development is also aimed at the high-end market, but seeks to attract buyers of its villas through Palau's new residency visa and change in length of lease ownership. It will be the first project to do so.

Palau recently extended the maximum allowable length of leases by foreign citizens of land in Palau to 99 years, and has also introduced the Elite Resident Visa Act, signed into law on Dec. 2, 2007, which approves permanent resident visas for individuals who purchase a property with a value greater than $250,000. Certain government fees and conditions apply. Family members of the purchaser are also eligible for residency visas. "That residency is transferable upon the sale of the property. The visa law is in place," said Alan R. Seid, chairman of Micronesia Investment & Development Corp.

Micronesia Investment & Development Corp. - or MidCorp as it is also known - plans a luxury villa development in Meyuns. Overlooking the bay of Koror, the picturesque site is that of the former Image Restaurant. The property is about 48,000 square meters, of which about 20,000 square meters are waterfront and was purchased by MidCorp. for $2.8 million.

The villas have been designed by Popo Danes of Bali, who Seid said "has been a pioneer of design of high-end vacation homes in Bali and Asia."

Seid told the Journal that the group plans 12 villas on the property, each 12,000 square feet. "Each one will have their own pool," he said. "Each lot of land will have landscaping utilizing local Palauan flowers and trees." MidCorp will also make arrangements for the properties to be rented out. "People will have the chance of living in them as residents and we will have a management company leasing them out for rent."

Plans to develop a 100-room Outrigger Resort in Meyun, which will also feature villas, are not presently moving forward, Seid said. "They are still on the drawing board, so to speak." He said that with the tough economy in Hawaii and the downturn also in Palau's tourism market, the project was on hold, though not abandoned. "We will maybe revive the project next year," he said. "We think they are a fine company and look forward to building on our relationship."

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