CNMI Casino Claims It Will Generate $2.2 Billion In Taxes

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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 Group project on Tinian to take 12 years to complete

By Cherrie Anne E. Villahermosa

SAIPAN, CNMI (Marianas Variety, Feb. 10, 2016) – The commonwealth will collect $2.2 billion in direct casino tax payments once the $1.2 billion casino and golf course project of Alter City Group at Puntan Diablo on Tinian is up and running, its consultant Antonio Muna said.

It will take 12 years to complete the project and the construction of the first of the three phases will begin this August, he added.

The project will occupy an area of 1.5 million square meters of public land.

The construction period for Phase 1-A will be 24 months and involves 150 units of villas and a casino. It will be completed in 2019. Phases 1B and 1C will start in 2018 and will be completed in 2020.

The total cost of Phases 1A, B and C is $445 million for the completion of 1,789 units/apartments and rooms comprised of villas, service apartments, hotel rooms, a casino, an 18-hole golf course and a club house.

Alter City Group or ACG is applying for 100 percent tax incentives under the Qualifying Certificate program.

ACG is requesting a tax rebatement of its BGR tax, bar tax, income tax, developers tax and excise tax for 25 years.

The total abatement of tax if granted is estimated to be $1.1 billion.

But aside from the $2.2 billion in casino tax payments if ACG’s project materializes, Muna said it will also create job opportunities for the CNMI: there are 955 positions to be filled in 2019 once Phase 1 project is completed.

These include 87 managerial and 868 non-managerial positions, and Muna said annual salaries will range from $27,000 for non-managerial to $54,000 for managerial positions.

In the year 2023, he said 2,004 positions will be filled: 182 managerial and 1,822 non-managerial.

In the year 2040, he added, 3,542 positions will be filled: 322 managerial and 3,220 non-managerial.

According to Muna, ACG’s projected direct tax payments include hotel occupancy taxes, $1.4 billion; payroll taxes, $170 million; CRM permit fees, $2.7 million, casino license fees, $25 million; public land lease, $153 million — for a total of $1.7 billion plus tax payments from casino operations amounting to $500 million.

In addition, Muna said ACG plans to conduct training programs for all interested residents so they will be qualified for employment.

ACG also pledged $5 million to improve airport and seaport access to Tinian and the investor will also revive the ferry services to carry not only passengers but also vehicles.

Moreover, ACG will build beach park facilities for public access along the beach at the resort site and a health care clinic. The investor will likewise assist the municipal government in closing the dumpsite at the project site in 2017.

ACG took over waste management at the dumpsite in 2015 and has already spent a total of $3.8 million there, Muna said.

Recently, the Commonwealth Development Authority conducted a public hearing on Tinian for ACG’s QC application.

CDA Executive Director Manny Sablan said the board will discuss ACG’s request and then make a recommendation to the governor who will decide whether to approve the QC application.

Press Secretary Ivan Blanco said the administration cannot comment until the numbers and business proposal from ACG, including CDA’s recommendations and findings, are presented to Gov. Ralph Torres.

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