Imperial Pacific International has gotten hammered on multiple fronts.
The developer of a hotel and casino project underway in Garapan, Saipan, received what amounted to a cease and desist order when the Commonwealth of the Northern Mariana Islands Department of Public Works said the company violated the building safety code.
The company complains about security on the job site and staff shortages. And an investor also seeks authorization to sell off IPI’s gaming machines and heavy equipment.
It seems the company has spent the past year building the project without approval of construction plans.
IPI claims it submitted hundreds of documents since the start of construction. “This is an issue where a few requested documents weren’t submitted by our third party engineers,” the company said.
The Commonwealth Casino Commission said the DPW has been unsuccessful in obtaining permit drawings and revised plans from IPI, according to Asian Gaming Brief. Problems also involve welding work that has not complied with local building codes.
“If IPI doesn’t have permit drawings, how are they building to code? What are they building to? How are they getting inspections? And how long has DPW allowed this to happen?” said lawmaker Representative Tina Sablan, a vocal critic of the IPI. The suspension came after Sablan, who opposes IPI, brought up that the Commonwealth Casino Commission had been seeking permit drawings for at least a year.
The public works agency will not lift its suspension order until it receives shop drawings and revised plans for approval by the building safety officer. DPW has threatened the developer with fines if the order is not followed, but the Commonwealth does not have a good track record of collecting fees and taxes from IPI. This year alone, the company has failed to pay its $15.5 million casino license fee and a $3 million regulatory fee, nor delinquent payments to the Community Benefit Fund.
Meanwhile, IPI executives have complained about workforce and security issues. Outside of management, the company has 304 workers on the construction project. But Covid-19 has stopped some skilled workers from entering the Commonwealth.
CEO Donald Browne also claims construction equipment and tools are being stolen almost daily, resulting in additional delays and expense.
In addition, Pacific Rim Land Development LLC has requested an order authorizing the contractor to auction off IPI’s gaming machines and vehicles, a move the company opposes. A better alternative would be for an IPI investor to deposit almost $6 million in a Commonwealth bank as security for Pacific Rim, said IPI lawyer Michael Dotts said.
Going through an auction would result in selling gaming equipment for a fraction of its worth due to the coronavirus pandemic, and the equipment has no market. While IPI said the gaming equipment is worth more than $20 million, Dotts estimates it would fetch only $2 million. Moreover only IPI can legally possess the equipment in the Commonwealth so it would need to be purchased for another locale, causing a delay in reopening its casino.
Selling the heavy equipment would cause further delays in construction of its casino hotel complex, maybe even ending the completion, Dotts said.
IPI has requested the federal court to allow its investor, Pacific International Property Management LLC, to deposit $5,599,975 in a Commonwealth bank. Pacific Rim would be fully secured and result in no more harm to IPI’s business.
Should IPI prevail in an appeal to a judgment, the funds can be released back to the investor; should Pacific Rim prevail, all restrictions placed on the funds can be lifted and Pacific Rim will be fully paid.
“IPI now has an investor who has placed on deposit $5,599,975.00 in a Commonwealth bank and who is willing to allow this account to be used or transferred to secure payment of the judgment pending appeal,” Dotts said.
