CNMI Investor Group Secures Tinian Casino License

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Pacific Islands Development Program, East-West Center With Support From Center for Pacific Islands Studies, University of Hawai‘i

Alter City plans billion dollar resort development

By Dennis B. Chan

SAIPAN, CNMI (Saipan Tribune, Feb. 1, 2016) – In the backdrop hung the specter of other past and failed casino applicants, but Tinian gaming regulators on Friday chose to move forward with the promise of Alter City Group’s planned billion-dollar casino resort replete with jobs and landmark tourist sites, handing the investors a conditional casino operator’s license on Tinian Friday.

In a unanimous vote, the Tinian Casino Gaming Control Commission found the applicants Alter City Group Inc. and its shareholders, chair Kin Ian Leong and managing director Ken Lin, suitable for a casino operator license.

Among others, Alter City must submit to the commission all current financial statements within 120 days following the issuance of the casino operator’s license. Within 120 days, ACG must to the satisfaction of the commission, submit evidence of verifiable source of funds used to the date as proposed for the development of operations to the casino. ACG must also provide requested documents to the support of the wealth of Leong and Lin. Failure to adequately respond to this request shall result in suspension the commission’s approval of the ACG until such time as adequate documentation.

"Today starts a new era for Tinian’s casino industry," Tinian Mayor Joey San Nicolas said at the public hearing for the license at the Tinian Superior Court.

San Nicolas opened public comments by extending his full endorsement. Sen. President Francisco Borja (Ind-Tinian), among other Tinian leaders, also expressed full support

Over the past year Tinian has faced many setbacks culminating in the closure of the Tinian Dynasty Hotel & Casino, San Nicolas said. The municipality of Tinian for the past 18 years has relied on casino tax revenues to fund many of its public programs and provide jobs for local residents, he said.

"With the closure of Tinian’s only casino, we have faced considerable challenges just to pay the employees funded under the local budget as well as to maintain the most basic services like medical assistance," San Nicolas said.

Full disclosure

Commissioner Lydia Barcinas—referring to findings of their investigator—expressed concerned about "the lack of transparency regarding the sources of funds that are going to used for this project."

"…We do need additional information that we had requested and had not been given," she said. Barcinas noted Leong’s plan to pay for the first phase of construction of the casino, which is about $150 million. "How are you going to go about that if you don’t show in your finances that you have the $150 million?"

In response, ACG lawyer Robert Torres noted these were Chinese language documents that needed to be accurately translated by a reputable accounting firm. "So that they have notary certificate and the legitimacy in the presentation," he said.

"If we don’t produce we know we are not going to continue with a casino license. The documents are going to be provided…" that will answer the questions about financial capability of the two shareholders and the resources and sources of funds for the project, said Torres,

"They are available" and will be translated. "That is our intention."

During public comments, former commission executive director Lucia Blanco-Maratita—ousted from the position a week before the hearing—stressed that suitability and integrity are married with compliance.

"We are going to see a lot of money coming into Tinian…We do want medical referral, better medical services, better schools, scholarships—we want all those things," she said. "Money is good, if it is used for the benefit of Tinian. But the issue, though, is that having bags of money is not enough.

Blanco-Maratita pointed to the past parade of casino applicants that have come to the island in the last 30 years only to see the commission grant a license while the applicants "sit and lag and do not produce any income for Tinian."

She stressed the commission impose conditions with "clear, concrete, and finite timeline."

"In the three years, I was with the commission, we’ve seen months where there were no collections," she said. "

"…Those are lessons that we should learn."

Casino plans

According to Albert Davia, senior vice president of gaming and business development of ACG’s Plumeria Golf and Casino Resort, on the vast 150 hectare property in Puntan Diablo will rise a "world class" facility replete with multiple towers, hotel rooms, timeshare apartments and villas; bars, luxury retail shops, pool and spa facilities, community centers, farmer’s markets, and a theme park.

"We want to form a destination that will appear on the maps worldwide," Davia said in a presentation Friday.

"Why did we choose Tinian? It’s the closest U.S. territory in Asia and there’s a safety factor that goes with that. We have a visa waiver program. The gaming industry is on the cusp—in our belief—to boom.

He said the development of the property is worth $1.2 million; encompassing 6,000 rooms, 100 gaming tables, and 250 slot machines.

The casino itself will be 265,000 square feet of gaming and over three floors,

"Our market very clearly is to spread the risk," he said. "We are not Best Sunshine [International, Ltd]. We do not want to be Best Sunshine."

He said they would spread the risk by having a mass gaming area, a premium gaming area, and a VIP gaming area in breaking up the casino into three floors.

Davia said their contribution in BGRT over the next 25 years will be $819 million, with $145 million in infrastructure development; $452 million gaming taxes over the next 25 years; $23 million in BGRT from gaming revenue;

"Most importantly," he said, "We want to create $5,000 jobs on this island."

"We are conservative. But we feel very strongly we can deliver on this. Our mission is to be a destination where people can stay, play, enjoy and most importantly can’t wait to return."

"Our vision is to place Tinian on the map for travelers worldwide," he said.

On labor concerns, Barcinas and Maratita both noted the needs for labor development plans for upward mobility for locals.

Torres said they would look to partner with the Northern Marianas College and Northern Marianas Technical Institute to develop these workers.

He said if they are going to bring in skilled casino personnel from abroad they will also need to develop an internship and a partnership program, "where our local workforce" gets trained.

"Any person in the Commonwealth can do anything and everything that anyone else from Atlantic City to Las Vegas can do…the work starts now to build the capacity," he said.

Commissioner Joe Kiyoshi also asked to involve the commission in the working group for labor development.

"[The Public School System] should start changing the way we teach our kids," he said. "My vision is Tinian will become the mecca of casino and gambling and the only way to find the labor is through PSS. We have kids who are graduating and have no where to go."

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