- By Jonathan Perez
Placing more bets
As Imperial Pacific struggles to complete its hotel project, Japanese investor comes to the rescue
Saipan — Critics predict — or hope— the Imperial Pacific International’s casino project is doomed to fail. Two years since it opened the completed section of the Imperial Palace Resort in Garapan, IPI has been running into problems, including labor lawsuits and its inability to meet the deadline to complete a 2,000-room hotel facility.
IPI claimed the combination of devastating typhoons in 2018 that brought tourism at a standstill and a crippling new federal immigration policy that bars the hiring of workers from the Philippines has stalled the hotel-casino project in Garapan.
The CNMI government, which has its own stake in the casino industry that it sees as economic salvation, won’t allow it fail. It has repeatedly shown flexibility to dismantle any obstacle and allow IPI move forward.
IPI has sealed a multimillion-dollar deal with Japanese financial services company GCM Ltd., which infused fresh capital to jumpstart Phase 1 of the integrated casino resort hotel in the northern part of Saipan. IPI officials said the yet-to-be-completed Garapan project, which has been renamed Imperial Palace Saipan, is their initial gaming facility that has the casino and 15 luxury villas.
GCM is a financial advice and investment information firm that is based in the Ginza district in Tokyo. Discretionary investment management, investment management, investment advising agency, real estate advisory, housing land and building dealer, and money-lending institution licensed by the governor of Tokyo.
GCM is investing $500 million for the first phase of IPI’s integrated resort. It has shelled out an initial deposit of $100 million, based on a filing with the Hong Kong Stock Exchange.
But numbers do not add up, casting a cloud of doubt on the IPI-GCM deal. The GCM’s company profile shows it has a capital of Y350,000,000 ($3.2 million). It is also not yet known if GCM had acquired loans or had other financers to bulk up its multimillion-dollar investment.
GCM’s entry into the problematic project is made possible after the CNMI Lottery Commission granted IPI’s request to amend the Casino License Agreement, adjusting shareholder controlling interest from 51 percent to 10 percent. The amendment has paved the way for third-party investors that would help IPI complete Phase 1, which promises high-end amenities.
But numbers do not add up, casting a cloud of doubt on the IPI-GCM deal that will invite public scrutiny. The GCM’s company profile shows it has a capital of Y350,000,000 ($3.2 million). It is also not yet known if GCM had acquired loans or had other financers to bulk up its multimillion-dollar investment.
GCM is the first foreign investor to infuse fresh capital into the Hong Kong-based conglomerate’s planned integrated casino-resort facility. The new monies could finally jumpstart Phase 1.
IPI has hosted two separate groups of investors, drawing a total of 300, according to IPI chief executive officer Mark Brown. “They are looking at our company and what our plans are. Having more investors and basically having more partners coming in to Saipan will allow our company to grow and the CNMI grows with it,” Brown said.
Part of IPI’s multibillion-dollar investment is to bring in brand-name hotels for the resort complex, hoping to attract high-end tourists to the islands. The integrated resort is being planned at the site of the former Mariana Resort & Spa. “We plan to have 2,000 rooms and we’re looking to have different partners for this,” Brown said. “Like the Sheraton and Four Seasons, that’s what we want to also do here. All of these deals would be different. Our goal is to bring these partners with name brands that people outside of the CNMI know.”
IPI Special Projects senior vice president Viola Alepuyo said IPI will still comply with the 2,000-guest room requirement under the casino agreement. “The integrated resort can be in one or more than one development site. What IPI wants to do is to build an integrated resort,” she said.
IPI is using Sentosa World Resort in Singapore as a model for its new plan. Sentosa, named after the island on which it is built, is an integrated resort with two casinos and other attractions. “They have actually a number of different hotels, managed by different companies,” Alepuyo said. “In addition, they have retail space, depending on which hotel you are staying. One of the attractions is a theme-park entertainment facility run by Universal Studios. What IPI is trying to do is bring in other partners that could build brand-new hotels, so that the Hyatt is not only the brand-name hotel here.”
IPI, which has 14,140 square meters of gaming area, will partially open its 15 beach-front villas at the Imperial Palace Saipan, the initial gaming facility in Garapan, in September. Once completed, IPI will have over 300 luxury rooms and other amenities that can be found in a five-star luxury casino-hotel.
Click here to subscribe to our digital edition