Imperial Pacific International Holdings (IPI), operator of the failed Imperial Palace Saipan casino, announced last week that it plans to reopen the resort this fall. The plan includes leasing most of its hotel rooms and villas and also setting up a retail quarter at the resort, located in the Commonwealth of the Northern Mariana Islands (CNMI).
The resort has been closed since March 2020. And while the pandemic was a complicating factor, IPI has been on thin ice for years. Its gaming license was suspended in April 2021, and remains “on the verge of being revoked,” according to Inside Asian Gaming. The company is now negotiating with the Commonwealth Casino Commission (CCC) to regain that license. On June 23, IPI said it was “in the process of finalizing the settlement terms through a settlement agreement” with the CCC. “IPI is actively planning, under CCC’s guidance, for reopening by November 2022.”
But IPI doesn’t exactly inspire confidence in local lawmakers these days. It has a dismal track record when it comes to compliance, having failed to pay its annual $15.5 million license fee in August 2020, its annual $3.1 million regulatory fee in October 2020, and $20 million due to the community benefit fund in both 2018 and 2019. It has also failed to maintain a minimum of US$2 billion in capital, and did not comply with a CCC order to pay all outstanding vendor debts. IPI now says it was unable to comply because of the shutdown, though some of those debts were incurred before the pandemic.
The company’s new plans also include the completion of construction on the luxurious island resort, which has missed a series of construction deadlines in recent years. “Once the travel restrictions in Saipan are lifted, the casino in Imperial Palace Saipan shall resume operations and be opened to the public,” IPI said.
Ben Lee, Asia gaming analyst and head of IGamix Management & Consulting, isn’t buying the company’s latest positive spin. He recently told Asia Gaming Brief, “They owe millions to creditors, staff, the Casino Control Commission—there isn’t anyone they don’t owe money to.” He scoffed at the premium room rates proposed for accommodations ($1,000 per day on average for a hotel room, and US$2,400 per day for a villa). Lee said, “Nothing in the region would get that kind of rate. Also who is it going to cater to? There will be no Chinese travelers for the foreseeable future.”
Nevertheless, IPI has signed a four-year deal with Sino Travel Samoa Ltd., which will handle the leasing of 250 hotel rooms and 15 villas at Imperial Palace, pending licenses and approvals. The annual gross rental income underwritten by Sino Travel will not be less than $104.4 million. Sino Travel reportedly does business in Hong Kong, China, India and Samoa.
IPI also plans to form a joint venture with Jiadingsheng Supply Chain Management, a Chinese company, to operate a shopping mall at Imperial Palace for four years starting in October. The mall will cover around 1,000 square meters (10,800 square feet) on the ground floor of Imperial Palace. Jiadingsheng has guaranteed annual revenues of at least HK$300 million (US$38.5 million) and net profits of HK$20 million (US$2.6 million).
IPI said the two agreements were designed to bring in much-needed revenue while it negotiates to retain its casino license.
“The group has been actively communicating with the CCC for a settlement proposal with an aim to resume the casino resort developer license as soon as practicable,” it said. “Meanwhile, the group has been formulating business strategies to utilize the group’s currently available resources in generating income on the resort and leisure traveling part of the Saipan project with an aim to maximize shareholder’s value.”
It said its leasing plan would get revenues flowing “amid the temporary suspension of the casino resort developer license.”
