DEPARTMENT of Public Lands Secretary Teresita Santos said she will not extend Honest Profit International Ltd.’s lease on a property in San Antonio until the company has resolved compliance issues and completed the construction of its hotel.
Santos sent a letter to Chaokai Huang, president of HPIL Ltd., on Oct. 25 in response to Huang’s request to extend the lease on the property, which is adjacent to the Pacific Islands Club.
Variety files state the company signed a 25-year lease with DPL, which means the lease will not expire until 2039.
On July 22, 2023, Santos received a letter from Huang requesting an additional 15 years.
Santos said any agreement to extend the lease between DPL and HPIL would be subject to the approval of the Legislature. But she added that she will not forward the extension request unless HPIL is in full compliance with the terms of the original lease.
Santos mentioned numerous compliance issues in her letter, and asked Huang to produce the following documents:
— Evidence of HPIL’s source of financing to fund its resort project.
— A complete construction plan and conceptual design.
— A copy of its insurance policy; business gross revenue tax quarterly reports from May 2020 to present.
— An appraisal report, which was originally due in July 2019, to determine rent for a period of five years.
Santos said since 2016, DPL has had concerns regarding HPIL’s ability to fund its resort project.
She said a May 2016 letter from DPL requested evidence that HPIL had sufficient funds reserved in cash or cash equivalent accounts to complete the project.
Santos said under Article 13 of the lease, HPIL has failed to follow through on its public benefit obligations. As part of its lease agreement, HPIL was responsible for the following:
—Constructing two concrete pavilions at San Antonio Beach, behind Francisco M. Sablan Middle School.
—Improving and paving the road leading to FMS Middle School and San Antonio Beach.
—Beautifying, maintaining, and securing the beach area behind FMS Middle School.
—Providing assistance, donations, sponsorships, and support for school programs at FMS Middle School.
“DPL would be happy to revisit HPIL’s request for an extension once HPIL has resolved all outstanding compliance issues and has either completed construction of the hotel or is nearing expiration of its lease,” Santos said.
Last month, HPIL signed a hotel management agreement with Marriott International Inc. to operate Saipan Marriott Resort and Spa in San Antonio.
