40-year LaoLao lease OK'd

http://www.saipantribune.com/newsstory.aspx?cat=1&newsID=74783


Local Saturday, December 01, 2007 By Agnes E. DonatoReporter


Approval signals start of $100M Kumho dev't plan

Kumho Asiana and the local business community breathed a sigh of relief yesterday after the Legislature granted the new owner of LaoLao Bay Golf Resort a fresh 40-year lease of the Kagman property.The Senate and House of Representatives voted unanimously to approve Kumho Asiana's proposal to lease the 161-hectare public land.The lawmakers' decision will enable Kumho Asiana, which recently acquired Saipan LauLau Development Inc., to proceed with its $100-million resort development project for the golf facility.“I thank the Legislature for approving this,” said Sun Don Jhung, president of Saipan LauLau Development.The company is poised to complete all permitting requirements within the next month, in a bid to get 17-month construction started before the end of the year. The target completion date for the new facilities is July 1, 2009.DelaysKumho Asiana faced some setbacks before getting the lease approved. The proposed lease was submitted to the Legislature in September 2007. The Senate and House initially set an early November joint session to act on the lease, but schedule conflicts caused delay. Then the joint session was rescheduled for Tuesday, Nov. 27.After two more postponements, the session was called for yesterday morning. Even then, the lawmakers were not ready to act on the lease. They went into a closed-door meeting that lasted about four hours. Meanwhile, Kumho Asiana and supporters from the local private sector waited.At 2:30pm, the Legislature went back to session. Floor amendments were made to the joint resolution granting the lease. Sen. Luis Crisostimo asked for an opportunity to question a Kumho representative, but his motion was shot down by fellow members.In addition to Crisostimo, Rep. Arnold I. Palacios was one of the lawmakers who expressed reservation about the lease. Palacios said he was concerned about the legal issues that may arise from terminating the old lease agreement and executing a new 40-year deal. But the legal opinion expressed by the Legislature's in-house counsels allayed his concerns, he said.At 3:30pm, the lawmakers took a vote. All 26 members present voted in favor of approving the lease. Crisostimo qualified his vote as “with reservation.”“I'm very pleased,” said Sen. Maria Pangelinan, chairwoman of the Senate Committee on Resources, Economic Development, and Programs, which reviewed and recommended approval of the lease. “It took a lot of work, understanding, and getting your colleagues to appreciate the enormous benefits of this investment,” she added.Reduced rent vs long-term benefitsUnder the proposed lease, Kumho Asiana will pay rent of $103,002 a year for the 161-hectare property in Kagman, where the golf course is situated. This is a significant cut from the current rent amount of $384,000 a year.However, benefits are projected to outweigh losses from rent reduction. The construction project will spur economic activity in the next year and a half. The planned resort development will include 12-story buildings with 128 rooms, as well as seven luxury villas. The development will also improve facilities for golfers. In addition to three new recreation clubhouses for golfers, current golf courses will be redesigned to meet world golf championship standards.Asiana Airlines, which will have 18 flights to Saipan weekly by January 2008, plans to continue adding flights to back up Kumho's investment in the golf facility