Senate endorses ASPA leases for 30 and 50 years, respectively
The Senate has endorsed two separate leases of government land in Tafuna for the American Samoa Power Authority, with one a lease to be extended for 30-years and the other with a 50-year extension.
The two leases now go to the House for their endorsement. The House has their own version of the leases.
“ASPA is and continues to be a long term partner with ASG in the development and improvement of [utility] services to the Territory,” Gov. Lolo Matalasi Moliga said in a letter to Fono leaders, who were urged to give their endorsement of the two leases.
Local law requires any lease of any government land for ten years or more be subject to Fono review and endorsement. Friday morning, the Senate Power, Electric and Water Committee held a hearing on the two leases with ASPA's chief operation officer, Reno Vivao answering questions.
The 30-year lease — Parcel B — was originally for less than 10-years (it was nine years and eleven months) and expired 2019. An option in the lease gave ASPA an extension of 30 years, and the authority is now exercising this option valid from Sept. 28, 2009 to Sept. 27, 2039, according to the lease for the 8.89 acres of real estate.
ASPA executive director Utu Abe Malae told Samoa News earlier this week that this property is the southern half of the ASPA Tafuna compound where the Wastewater Office and metal recycling yard are located; it is also the spot for the proposed Operations Office Building currently under design.
During the Senate hearing, Vivao informed senators this parcel also houses several important projects funded with federal funds such as the sewer lines and the linemen training program.
The lease agreement states that the rental rate is 30-cents per square foot per year or $116,140.90. The rental rate is subject to adjustment for inflation at a rate of 5% beginning on Sept. 28, 2014 and thereafter remains in place for the remainder of the lease agreement.
For the 50 year lease — Lot AA, aka Parcel C — ASPA is exercising an option from the original lease of less than ten years that commenced Aug. 1, 2010 and was set to expire June 2020. The new lease is valid for 50-years from Aug. 1, 2010 until July 1, 2060.
This property is between ASPA and Industrial Gases to the south and that area is being cleared for the new solar PV installation, Utu told Samoa News, when asked for an explanation.
During the Senate hearing, Vivao explained that this project, once completed, will provide 1.065 megawatts and the ASPA board is supportive of this important project. He also says the contractor for this project is expected to arrive the middle of next month and the project — once it begins — will be for six months.
Vivao shared that the PV (photo voltaic) project is one of the ongoing projects by ASPA to reduce the cost of electricity and this has been mandated by the governor and therefore important to Utu and the board.
Additionally, Utu wants to pass on to customers any savings from this project and this is also his goal for any current operational projects, Vivao said.
According to the lease agreement, this property is 3.445 acres, with a rental rate of 30-cents per square foot, per year, for the first 10-years starting from 2010 (or $48,019.20 per year); the following 10-years from 2020 has an increase of three cents (or $49,521.12 per year); and another three- cent hike (or $54,023.04 a year) for the next 10-years beginning in 2030.
The rate then increases by four cents (or $60,025.60 annually) for the next ten years starting in 2040; and another four cent hike (or $66,028.16 per year) for the last ten years of the lease.
And should ASPA exercise the authority to sublease to a contractor - pursuant to terms of the lease agreement - then ASG shall be entitled to and shall receive from ASPA fifty-percent of all rent collected on that sublease in excess of the regular rent charged to ASPA, according to a provision of the lease.