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To build or not to build

Updated: Apr 14, 2023

But that’s not really the question. Governor, senators wrangle over the Guam hospital project



By Mar-Vic Cagurangan

Historically, any major government project on Guam is bound to hit a rough patch— especially one with a price tag of $1 billion. The proposed medical campus which Gov. Lou Leon Guerrero wants to build on a Navy-owned property in Mangilao will have been the government of Guam’s largest undertaking in history. The project cost is equivalent to one-sixth of the island’s $6 billion GDP.


Touted as a “new state-of-the-art” facility that will serve Guam and Micronesia, the medical campus project is the centerpiece of the Leon Guerrero administration. Setting an ambitious target, the governor vows to get the facility up and running before the end of her second term.


“We will build your hospital,” Leon Guerrero said in her state of the address on March 15, clearly defiant amid the flashing slow-down signal. “To that end, I will sign a long-term lease with the federal government siting the Guam Medical Campus at the old Eagles Field.”


Not too fast. The lease needed to be vetted, according to Guam senators.


“Even Congress requires submission and review of long-term military leases,” said Speaker Therese Terlaje, author of Bill 12-37, which would require a legislative review and approval of any lease or land purchases involving the governor. “Why shouldn’t the Guam legislature similarly review? Why shouldn’t the legislature provide the checks and balances that all 15 of us were elected to do on behalf of the people of Guam?”


The legislature failed to muster 10 votes needed to override the governor's veto of Bill 12-37.


The idea to build a new hospital on Guam was hatched when the U.S. Army Corps of Engineers determined in 2019 that it would be more fiscally prudent to replace the aging Guam Memorial Hospital altogether than to repair it. At the time, the USACE estimated that building a new hospital for the size of Guam’s population would cost $743 million, The cost estimate later ballooned to $1 billion.

Speaker Therese Terlaje and Gov. Lou Leon Gurrero don't see eye-to-eye on the Eagles Field lease.

Four years later, what started as a grand idea became a convoluted affair, like a large mesh net that caught different elements all entangled into a ball of confusion.


Because the proposed facility is being planned to be built on a 102-acre property acquired from ancestral families after World War II, the project resurrected the recurring demand for land return and rekindled Guam's love-hate relationship with the military.


“Eagles Field is not returned land. And it has not been so for longer than many in this hall have been alive. Even if it were, federal law does not allow returned lands to be conveyed to ancestral landowners,” Leon Guerrero said. “If, and when, Federal lands are returned, federal law directs that they are returned to our government for public use only. Building a hospital is public use.”


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Pending before the legislature is the governor-proposed Land Bank reform bill that would put $10 million into the Land Bank Trust Fund this year and $2 million every year thereafter to cover the compensation for landowners who were previously not paid for their unreturned properties.


Sen. Will Parkinson, who reversed his initial “yes” vote for the lease transparency measure, said he initially voted for Bill 12-37 based on the assumption that the land might be returned to the ancestral owners. After meeting with Rear Adm. Ben Nicholson, Parkinson said it became clear to him that there was no possibility of land return.


"I cannot support this hospital because the choice is either you badly need a hospital or you don't," he said. "I cannot in good conscience not support a new hospital."


On the sidelines stand the Guam doctors, who opposed the location of a new medical complex that will be integrated with public health offices.


The Guam Medical Association maintained that the hospital site should logically stay in Tamuning, where most doctors’ clinics are located. “We need a practical new hospital, not a joint public health complex along with physicians’ offices,” GMA said in a letter to legislative leaders.


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The 99-year lease between Leon Guerrero and the Navy was delivered to the governor’s office on March 15.


A companion measure, Bill 13-37, which was also vetoed by the governor, sought to require the inclusion of representatives from the legislature in the 21st Century Healthcare Center Committee tasked with the procurement of contractors for the medical complex.


“The public has a right to know what they are being committed to for potentially 99 years or more, that in the end when bearing the burden of the costs, the people of Guam are satisfied with the product,” Terlaje said.


The typical bickering between the executive branch and the legislature escalated into an exchange of fiery statements, with the governor accusing senators of being “paranoid.”


“These obstructionist politicians are frustrated with the fact that they cannot direct or control the executive branch's efforts to establish the new hospital," the governor said in her veto message for Bill 12-37. "Their intense thirst for power has driven these politicians to mislead and manipulate our people to support their political ends."


Who talks like that? Republican Sen. Joanne Brown asked.


“I don’t know who’s doing the writing for them. I don’t know how the governor even allows those things to be put on the paper that she signs,” Brown said during a March 29 emergency session. “I’m beginning to wonder who’s really paranoid.”

If elected leaders are to make decisions on behalf of the people of Guam, “we need to make them in the light of day,” Brown said, noting that anomalous deals are usually cut in the dark.


Terlaje maintained that the legislature’s demand for lease scrutiny was not intended to block the project but simply to avoid the recurrence of previous deals that thrust the government of Guam into legal tussles and indebtedness, such as the “YTK or Max Havoc type of deal.”


The Max Havoc cautionary tale involved the Guam Economic Development Authority’s decision to grant an $800,000 loan to the producer of an obscure movie “Max Havoc: Curse of the Dragon,” a box-office flop that was filmed on Guam in 2004. After a long court battle resulting from GEDA's lawsuit to collect delinquent payments from the movie producer, the government eventually agreed to a $350,000 settlement.


But what might be more relevant to Terlaje’s argument for legislative approval was the infamous YTK case. In 2016, an arbitration panel ruled in favor of YTK Corp. and awarded $14 million in damages resulting from a dispute with the Port Authority of Guam on a lease for the government-owned Hotel Wharf.


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While reversing the panel’s award to YTK in 2019, the Supreme Court held that the Guam legislature had plenary authority over the transfer of land owned by the government of Guam. “Accordingly, where government-owned land is purportedly transferred to, or possessed by, a third-party without the legislature’s consent, that purported transfer or possession is unlawful,” the court said.


Because the legislature never approved such a transfer, enforcing the terms of the lease would have caused the parties to engage in the illegal transfer or possession of government-owned land without the legislature’s consent.


The governor maintained that the lease transparency bills would only “mire the project in politics and bureaucracy while derailing the coordinated and careful planning by subject-matter experts from executive branch agencies.”


Why the haste on the lease, Sen. Tom Fisher asked. “I don’t think anybody in this chamber created the urgency or lit the candle. No one in this chamber created the fuse,” Fisher said.


“This happened elsewhere. This lease was not sketched out on the back of a cocktail napkin between the admiral and the governor one night. This lease has been percolating, moving forward in the dark, probably, I guess, at least two years. Was anyone invited to participate in this discussion? It was enshrouded in fog and mystery.”




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