CLTC preparing policy to oversee commercial leases - KUAM.com-KUAM News: On Air. Online. On Demand.

CLTC preparing policy to oversee commercial leases

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 by Ken Quintanilla

Guam - It's been 20 years in the making and now the Chamorro Land Trust Commission is in the process of formulating rules and regulations for commercial leases that could result in millions of dollars in revenue. While the Chamorro Land Trust Law has allowed for the CLTC to issue lands for both agricultural and residential use, it also can do the same for commercial purposes.

"The law also says you have to have rules and regulations in place to do this well there never has been rules and regulations even though there may have been commercial leases in the past, so you can't keep operating that way so we needed to get this out," explained Department of Land Management director and former CLTC chairman Michael Borja.

The CLTC recently completed its review and formulation internally of draft commercial rules and regulations now available for public feedback. "And it's important for us to issue out some of these commercial leases because it is the lifeblood of the commission, it's how it earns its money," he added.

Borja says the intent is to still issue out agricultural and residential leases but they want those properties to be surveyed and equipped with infrastructure, but it takes money to do so at least an estimated $25,000 per lot. He added, "And this was the means in which it was set up by the law, and the founders of this law back in 1994 for us to do this and that's what we're trying to get done."

So how much revenue is expected to be generated through these commercial leases? "The way it works is there will be an appraisal on the piece of property and there's a percentage of that appraisal value that will be charged as the annual rent, and if you look at places like the crown piece of land which is basically Oka Point and kind of guess in your mind what you think of the value of that property is and take a percentage anywhere from one to 10% of that value and that's what the annual rent could be," he explained.

The property was estimated to require an investment of $180 million. He adds while the CLTC has issued "a couple dozen" commercial leases in the past- within the last few years they have ceased to do so. "The commissioners and I have decided we're not going to be doing any commercial leases until these rules and regs are in place, so it's put a stop on quite a few things and for us to even begin talking about some of the stuff," he said.

But why has it taken two decades to do so? "I can't speak for what has happened in the past," said Borja. "It's just that it wasn't done and we had to get it done, so it's one of those things we believed we had to complete and so we're getting to it."

As for those commercial leases already issued, Borja says they will still be honored, but when they do expire, it will have to be reviewed through these new rules and regulations. You can view the draft commercial rules at land management or online at http://dlm.guam.gov. The public hearing meanwhile is set for November 20 at 1pm at the land management conference on the third floor of the ITC Building. 

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