CASINO

Imperial Pacific trade money for more time to finish resort casino

TAGs: imperial pacific, saipan

imperial-pacific-resort-extension-paymentSaipan casino operator Imperial Pacific International Holdings (IPI) has agreed to pay additional fees in exchange for more time to finish building its new resort.

On Wednesday, gaming regulators in the Commonwealth of the Northern Mariana Islands (CNMI) announced that IPI had been granted extensions on completing both phases of the Imperial Pacific Resort Hotel Saipan, which launched its gaming operations last month after lengthy delays.

In April, IPI was granted an extension to complete Phase One by August 2018, but the construction delays and labor issues that have plagued this project since its inception don’t appear to have abated.

It was only last month that IPI announced that it planned to complete the resort’s 15 luxury villas by January 2018 and finish work on the 329-room hotel by August 2018. However, the company declined to specify when guests might actually begin booking their accommodations at the resort.

Under the new agreement, IPI’s deadline for completing the resort’s Phase One has been pushed back to August 13, 2023, while Phase Two must now be completed by August 13, 2028.

In exchange for the extensions, IPI has agreed to pay an annual fee of $20m to the Community Benefit Fund, with the first advance payment of $10m to be made on January 1, 2018. This new annual fee is on top of the $15m annual casino license fee and the Business Gross Revenue Tax (BGRT) that IPI already remits to the government.

There was no word on previous suggestions that IPI be required to pay tax on its gross gambling revenue, as some legislators have urged. IPI says it’s on track to pay $75m in BGRT in 2017, in addition to corporate income tax and excise tax on imported goods.

Gov. Ralph Torres issued a statement saying the agreement was a win-win, as the extensions would allow the government to “properly and efficiently build the necessary infrastructure to accommodate the new amenities.”

The Marianas Variety quoted Commonwealth Casino Commission chairman Juan Sablan telling the Senate Committee on Gaming that the extra $20m per year was a “substantial” amount of “upfront money,” and that the agreement offered the government “guaranteed revenue even if the project is not complete.”

The start of a new month would ordinarily bring a release from IPI detailing the size of its monthly VIP gambling turnover, but the company stopped releasing those figures in June. Going foward, IPI said it would only announce if monthly turnover was less than $2.5b, so we can safely assume that IPI’s new venue had a decent July.

Comments

views and opinions expressed are those of the author and do not necessarily reflect those of CalvinAyre.com