DOC cancels Industrial Park expansion amid land dispute
Because of a legal challenge pending in court over a land title dispute, the Department of Commerce has cancelled the expansion project for the Daniel K. Inouye Industrial Park, which has more than $1 million in outstanding rent and lease payments owed to the government as of June 30 this year.
DOC’s fiscal year 2013 third quarter performance report - covering the period of Apr. 1 — Jun. 30, 2013 — states the i_Industrial Park expansion project funded by the U.S. Economic Development Administration (EDA) and Community Development Block Grant program is temporarily on hold, pending land issues regarding “Title” to the property.
To salvage the project, DOC is now working with the U.S. Housing and Urban Development (HUD) to obtain approval for the use of CDBG funds to develop one of the roads located “out of the contest area”, the report says and noted that a security fence is needed to secure Industrial Park after-hours.
Responding to Samoa News inquires for an update and more details on the contested area — and who is claiming “title” to the property, DOC director Keniseli Lafaele only said the expansion project has been canceled due to a court case in which a Fagaima family challenged ASG's title to the Tafuna Industrial Park.
“Although the local courts ruled in ASG's favor based on the statute of limitations, the plaintiff is appealing the ruling, which keeps the matter pending,” he said. “All three roads that were going to be graded and paved by this project are located within this case's contested area.”
“According to EDA, it will only provide funding for properties with marketable titles. Because the ownership of the land has been challenged, the land is not considered marketable,” said Lafaele.
While the project is cancelled at this time, he said, ASG will be permitted to resubmit an application to EDA for this project once the title issue has been resolved.
“We are hopeful that the court case will come to an end soon, at which time DOC will resubmit a new application which will include necessary drainage, sidewalks, utility lines, and other infrastructural support not included in the original application,” he added.
At the end of the third quarter, the report says the Industrial Park arrears stand at just over $1.24 million with 47 tenants — 29 of them in arrears well over 90-days.
The Attorney General’s Office is working on leases with arrears outstanding more than 120 days, according to the report, which also states the average receivable per month is about $43,759.
The Industrial Park’s FY 2014 budget documents show a forecast of $617,000 to be collected in rents and leases for the new fiscal year. FY 2013 estimates stand at $633,000 and this is based on “actual collections of $474,555 as of June 30, 2013,” with three months remaining in the current fiscal year.
The third quarter report revealed that a memorandum granting DOC “full authority to manage all aspects of the industrial park with the exception of collecting lease payments” was signed by the governor during this quarter.
DOC, along with Industrial Park staff has initiated a ‘standard of operating procedure (SOP) that serves as the guiding document to provide standards for administering all park affairs, the report says and noted that in the interim, staff continues to monitor park activities until the SOP review is finalized and is also the case with new applications for the Industrial Park.
During last week’s DOC budget hearing, the Fono joint budget committee requested a copy of the memorandum as well as the SOP for further review.