Tinian Casino Developer Plans New Hotel Complex Investment

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Mega Stars reportedly engages major partner for project

By Alexie Villegas Zotomayor

SAIPAN, CNMI (Marianas Variety, Jan. 11, 2015) – The new year promises to be a good one for Tinian as Mega Stars has announced a potential investment in a new hotel complex with the possible involvement of a NASDAQ-listed company in the operation.

Mega Stars Overseas Limited’s Hong Kong parent company announced a possible engagement in the operation of a hotel-casino complex and potential tie-up with one of the six concessionaires in Macau for management of the hotel.

Chinese Strategic Holdings Limited announced a possible engagement in the operation of a hotel-casino complex.

"The parties have been in active negotiations on the key structural framework of the possible engagement," Mega Stars’s parent company stated adding that it will involve the subleasing of the complex.

Also mentioned were negotiations with a NASDAQ-listed public trading company for possible cooperation in the hotel management and investment.

Although it redacted the name of the company in its announcement, it did mention that it is one of the six concessionaries or sub-concessionaires in Macau.

Variety learned there are six casino concessionaires and sub-concessionaires in Macau: Sociedae de Jogos de Macau (SJM), Galaxy Entertainment Group and Wynn Resorts. These three have sub-concessions with Las Vegas Sands, Melco Crown Entertainment and MGM Resorts.

Galaxy, LVS, Melco, MGM and Wynn are Nasdaq-listed companies.

Mega Stars’ parent company’s announcement also said that its subsidiary, Tinian Realty International Co., has been in negotiations with this Nasdaq-listed company.

The tie-up would involve (1) assistance in the possible application for a gaming license of and for the new hotel complex; (2) facilitation of gaming license applications through its experience, professional knowledge, and understanding it gained through global licensing applications; (3) rendering of consultancy services relating to negotiations between the government and regulatory agencies in the CNMI; and (4) providing advice and enabling TRI to fulfill and satisfy compliance and/or regulatory duties and responsibilities and comply with licensing conditions and requirements imposed by the CNMI government.

Mega Stars’ parent company acknowledged that there is no "legally binding agreement" just yet relating to this possible cooperation.

"The Nasdaq company stated that if TRI and/or its preferred agent assumes or secures any interest in the complex, the Nasdaq company is interested to operate and manage such hotels and resorts as well as the casino and gaming facilities," the announcement said.

The announcement did not, however, mention where the casino complex will be located.

However, it may be recalled that Mega Stars announced last year its interest in building an integrated resort at Puntan Kastiyu on Tinian and developing a world-class facility on that 482-hectare site.

Variety learned that the firm Townland Consultants Ltd. worked on the design.

In the company’s announcement last year, Townland touted its work in the Northern Marianas, specifically, on Tinian where it is developing a Conceptual Master Layout Plan for an integrated resort on 482 hectares of land on Tinian island.

The plan, according to Townland, includes two world-class golf courses, 20-30 6-star high-end villa s, mid/high-end 4-5 Star hotel with 300-400 rooms, a retail / dining village, an agricultural cultivation zone which will provide quality food for the hotels on the island, among other attractions.

But there was a previous announcement on the construction of what they referred to as the "Trinity Hotel" to be built by Tinian Realty International.

Last year’s announcement of Mega Stars’ parent company stated that "HKE shall procure travelers to visit and stay at the Trinity Hotel to be developed on the Land leased by Tinian Realty International Co., and to use and enjoy the facilities of the Trinity Hotel."

Last year, TRI entered into a ground lease with lessor Judith D. Cruz on May 19 for $2,686,100 for Lot 044 T 02 with an area of 53,722 square meters on Tinian.

The lease is for 55 years beginning on May 19, 2014 and continuing until May 18, 2069.

According to the lease agreement, the remaining balance of $1,293,050 will have been paid by May 19, 2015.

There was an indication too that TRI may apply for a casino license provided that it complied with the Revised Tinian Casino Gaming Control Act of 1989 and TCGCC regulations.

Tinian Dynasty’s rental agreement with Gain Millenia

In July 2014, HKE entered into an agency agreement with Gain Millenia with Well Target as guarantor.

Gain Millenia, the preferred agent, would conduct global marketing campaigns for the Dynasty rooms; accept, arrange, handle and/or procure booking of, reservation for or order for the rooms and settle and discharge the rental pursuant to the Agency Agreement; and carry out ad hoc duties in relation to the rooms as the HKE may assign or request.

This agency agreement is supported by a $19 million rental repayment agreement.

In its Jan. 9, 2015 announcement, Chinese Strategic Holdings Limited said that a deed of settlement was reached.

The announcement said the agreement included a refund of rental prepayment to preferred agent upon the termination of the agency agreement.

Rental prepayment agreement refers to "a refundable prepayment in the total sum of HK$151,638,010" or $19.5 million by Gain Millenia to Hong Kong Entertainment Overseas Investments Limited.

It was announced that the parties had agreed to a repayment schedule regarding this rental repayment.

The rental refers to the rental to be paid by Millenia to HKE "for any usage, utilisation, occupation, leasing, hiring and/or chartering of the rooms during the term" of the agreement.

A meeting was held between the Tinian Casino Gaming Control Commission and Mega Stars in connection with this settlement agreement, according to the announcement.

Following the meeting, TCGCC asked the company in its Jan. 5, 2015 letter for more information and documents.

As of Jan. 9, the company was preparing the requested documents for submission to TCGCC.

The Dynasty, the only operating casino in the Northern Marianas since 1998, has 412 guest rooms including 40 executive suites and 2 presidential suites.

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