VIDEO: Adelup Refutes Any Suggestion Any Member of Calvo Administration Will Benefit From Tiyan Purchase Agreement

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Guam –  Governor Calvo’s Communications Director Troy Torres refutes any suggestion that any member of  the Calvo Administration would benefit from the agreement to purchase 3 lots in Tiyan from Core Tech.

Torres acknowledged that the family of  Chief of Staff Frank Arriola was one of the original Tiyan land owners, and they got a portion of the old Naval Air Station. That portion was sold to Core Tech for $11-million dollars in 2008.

Some critics have suggested that the Arriola family would some how benefit from the current proposal to buy it back at a far higher price, but Torres called that suggestion “an absolute lie. Neither Frank nor his family have anything to do with CoreTech” he said. [read Torres’ full statement below].

“There is no benefit to the Arriola family or to any family here at Adelup because they sold the property years ago,” said Torres.

Now, the cost to buy the property back has risen to $98 million dollars in tax credits, if t hat is all paid in 2014.

Or, the cost could rise to $254 million in tax credits if  GovGuam drags out the payments for another 10 years until 2024.   

OPTIONS:

* Continue current lease until expiration in 2024 >>> $318 million in tax credits, no ownership rights

* Buy it in 2014 >>> $98M in tax credits.

* Buy over the next 10 years >>> $254 million in tax credits

Developer Al Ysrael has urged the Governor to extend the lease for only 2 more years to allow time for a new school to be built some where else, on GovGuam land, at a cost of $30-million.

Administration Spokesman Phil Leon Guerrero made it clear to PNC News in an interview last Tuesday that that was not an option and Torres today again reiterated  that GovGuam can not get out of the current lease it has for the properties because the lease agreement does not have a termination clause. And he said the lease requires that a decision or buying the property must be made by next Tuesday, or GovGuam will be locked into leasing it for another 10 years at an even higher cost than leasing it. 

READ PNC’s Tuesday December 24th report on Ysrael’s proposal HERE

“Since January 2012, public documents and media reports revealed the December 31, 2013 deadline,” said Torres in his statement to PNC. “None of this is new. None of this was hidden.”

The lease agreement was drawn up under the previous administration, but Torres acknowledged that the termination clause was omitted in an amendment introduced by the Calvo Administration.

“If you can recall, we had terminated the lease agreement with Core Tech, we exercised the 120 day termination clause and that was because JFK had vacated” the Core Tech campus that it had been temporarily occupying while the new JFK was being built. 

READ the June 2011 PNC report on the Calvo Administration’s Lease Termination notice to Core Tech HERE

“What we did not know,” said Torres, “was that JFK took the collateral equipment to the new campus … and that  equipment didn’t belong to the Government of Guam, it belonged to Core Tech.”  At the same time, Untalan needed a place to go to while its building was under going repairs, and they needed collateral equipment too.

READ the amended lease with Core Tech for the Tiyan property HERE

As a result, instead of moving forward with the lease termination, the Administration sought to re-negotiate the lease to cover the cost of Core Tech’s “collateral equipment” which had been taken to JFK and to cover the cost of new collateral equipment to support Untalan’s move into the Tiyan campus.

“In order for them to go and get the financing .. to buy the collateral equipment they needed to be able to tell the bank that the money will come in and the Government of Guam can not terminate this agreement before this time.”  The termination clause was eliminated, and the Attorney General approved the revised lease arraignment.

READ the January 2012 PNC report on the AG’s approval of the revised Tiyan Lease agreement HERE 

Torres also acknowledged that it is a “bitter irony” that GovGuam now has to buy back land that the Navy gave back in 1995, at no cost, when Naval Air Station was closed.

But Torres points out that it was the Legislature, in 2002, which decided to return the land to the original landowners by passing Bill #295, which eventually put what was public land, back into private hands. .

READ P.L. 26-100,  introduced as Bill #295 HERE

While it was “a good thing” for the land to be returned to their original owners, Torres says the consequence of that is that GovGuam now has to buy it back, not just for a new central high school and DOE Administrative Offices, but GovGuam is now also forced to buy back many of the old Naval housing units and lots to make way for the Tiyan Parkway. 

Timeline:

* OCTOBER 10, 2000- The Navy conveys to GovGuam certain improved real property known as Tiyan, formerly Naval Air Station,  pursuant to quitclaim deed recorded on October 10, 2000 at the Department of Land Management Government of Guam, as Instrument No. 628091 (“Quitclaim Deed).

* MAY 24, 2002- Senators Mark Forbes, Tony Unpingco and Ben Pangelinan introduced Bill #295. It takes jurisdiction of the Tiayn properties returned by the Navy away from GEDA and turns it over to a taskforce which was required to:

*identify “specifically what Tiyan properties under the control of GIAA are required for strictly airport-related operation”

* find alternative means of compensation for the original owners of properties strictly needed for airport-related operations, either through leases with original landowners, outright purchases, or value-for-value land exchanges.

* Any Tiyan properties not specifically associated with GIAA operations “shall be deemed excess to the needs of GIAA, and shall be conveyed to GALC for return to original landowners, pursuant to the fast-track methodology.”

* JUNE 6, 2002- Bill #295 lapses into P.L. 26-100 without then Governor Carl Gutierrez’s signature. 

READ the statement from the Governor’s Communications Director Troy Torres below:

That would be an absolute lie. Neither Frank nor his family have anything to do with CoreTech.

To be frank, I think the administration is caught in a war between companies. There’s millions of tax credits and the reputation of appraisal companies at stake here. I think it’s pretty obvious that some corporate eyes want their piece. This is the same song and dance that happens when a company loses a bid to another company. The proper time for that battle should have been back in 2009, when the RFP/IFB went out and the best bidder won the lease to house the interim JFK campus. From that time to today, everyone in the private sector, the development community AND the media have had time to study and scrutinize the use of these facilities. Since January 2012, public documents and media reports revealed the December 31, 2013 deadline to enter the option to purchase or pay more in lease payments. None of this is new. None of this was hidden.

What is new is this:
– a $30 million offer to build a central high school two weeks before the Tiyan deadline
– no knowledge as to how much the land underneath that  building will cost, or where this land will be (considering GovGuam doesn’t own land big enough in the central area for a high school)
– no knowledge as to whether this building includes a gym and athletic fields
– no knowledge as to how the government will pay this with cash, or financed through tax credits
– if financed through tax credits, no knowledge as to the interest rate and what the final all-in cost will be
– no commitment from the offerer that his consortia of companies will pay off the government’s liability to CoreTech to pay the lease until 2024 if GovGuam doesn’t exercise the Dec. 31 option to purchase

What the government is pursuing right now has been available for public scrutiny for two years now. We announced our intention to pursue the purchase option this past summer. It is 50% cheaper than the JFK deal per square foot WITH land (a feature neither JFK nor Okkodo or Southern had). The developer offering the $30M deal said commercial buildings are developed for $300 to $400 per square foot. First, does that include the cost of the land factored in? And second, does that factor in the extra expense of retrofitting buildings for school use, to include technology wiring, air conditioning, etc.?
Frank is not benefiting from this. His family is not benefiting from this. No one in the administration is benefiting from this, unless their child or grandchild is attending either the charter school of George Washington High School.

This is the kind of time, when leaders put their money where their mouths are and, even against big money corporate pressure, put education first. That is what everybody talks about. That is what everyone campaigns on. That is the biggest promise the media holds elected officials to. Now is one of those times to see who actually comes through on this promise.