Government Order To Pay Guam Landowners For Landfill

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‘Just compensation’ amounts to nearly $22 million

By Gaynor Dumat-ol Daleno

HAGÅTÑA, Guam (Pacific Daily News, Nov. 2, 2012) – The cash-strapped government of Guam faces another big bill: at least $21.7 million must be paid to landowners whose property was used as the island's landfill.

A Superior Court of Guam decision issued Wednesday states that on top of the $21.7 million, that amount will accrue a 6 percent interest, retroactive to 2008, further raising the bill.

Superior Court Presiding Judge Alberto Lamorena III ordered that the landowners, who include Gov. Eddie Calvo's family's business enterprise, hotel developer Alfred Ysrael's family, the Jones family of Triple J businesses, attorney Joaquin C. Arriola's family, businessman Lee Holmes' family, Philippine business tycoon Henry Sy and Valencia Investments Corp., must be compensated more for the land that the government used for the landfill site.

The landowners were initially paid a smaller amount in 2008.

The landfill land in Dandan, Inarajan, encompasses more than 1.38 million square meters, court documents show.

The "just compensation" for GovGuam's use of the landfill land is $25 million, but since the landowners were initially awarded $3.4 million, the landowners are entitled to the difference of $21.7 million plus interest, the court order states.

Questions to the Guam attorney general's office and the governor's office as to whether GovGuam will appeal the judgment weren't answered as of press time yesterday afternoon.

The government's landfill and trash collection operations raise revenue through monthly residential trash collection and commercial trash hauling fees.

A federal court-appointed overseer and manager of the landfill and trash collection functions of GovGuam, Gershman, Brickner & Bratton, declined to comment on the local court's judgment in favor of the landowners.

Even before the court ruling, local residents faced a possible increase in trash collection fees.

By the end of this year, GovGuam has to decide whether customers of the landfill and trash collection services must pay for $7 million a year to repay the bond money borrowed to build the landfill.

The current residential rate is $30 per month, but if the landfill construction cost would be paid through increased trash fees, the monthly fee could go up by 50 percent over the next three years, Pacific Daily News files show.

The commercial rate is currently $172 per ton, but that could increase by 30 percent if customers will be made to pay for the debt repayment.

The landfill was built with about $200 million borrowed from the bond market in 2009. For the first five years of the debt, funding from the bond proceeds was set aside for repayment. This funding runs out in December, which is why a decision on longer-term plans to repay the debt must be made by the end of the year, according to Pacific Daily News files.

High estimates

The Superior Court's order on just compensation for Dandan landowners caps years of legal wrangling over the value of the condemned property.

A GovGuam appraiser, Nick Captain, had stated in court that the landfill land was worth $16 million, and then later revised that figure to $23 million.

Some of the landowners had testified that their land was worth between $185 million and $300 million.

"While the property owners clearly possess a breadth of real estate experience and unique knowledge... (their) estimates in this case are high," the court order states.

The local court visited the landfill site before making its decision.

"It is undisputed that construction of the landfill will diminish the value of the land area" that remains in the landowners' possession, the local court stated.

The local court also factored in the remaining economic benefit to the land that was not developed into a landfill.

At trial, GovGuam showed evidence that the replacement of the gravel access road with a wide, paved roadway and placement of underground utilities constituted substantial benefit to the remaining parcel, the local court stated. Captain estimated the improvements to the road and utilities added a $3.6 million value to the remaining land.

As a whole, the entire property is valued at $56 million, the court stated. After having determined that, the court deducted $31 million because of the remaining value of the unused land, plus the additional benefit of the road and utilities infrastructure that GovGuam paid for in the area as part of developing the landfill site. The landfill land is part of a bigger chunk of property.

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