DOC creates new rates for Industrial Park tenants
The Commerce Department has created a standard annual rental rate for tenants wanting to occupy space at the Daniel K. Inouye Industrial Park in Tafuna and the new rates will apply to future tenants, while the status of current tenants are under review, says DOC director Keniseli Lafaele.
The standard rate issue was first revealed in the DOC’s fiscal year 2013, fourth quarter performance report, which states in part that with the assistance and expertise of Dr. J. Sreeni, the DOC— which oversees the industrial park— has been able to create a standard annual rent for all tenants of the park.
According to the report, the annual rent is based on considering the median annual rate with inflation adjustments.
Responding to Samoa News inquiries, Lafaele said DOC is “updating rates based on the inflation index” and the reason for this move is that “some of these rates have not been adjusted to inflation for several years.”
So “we’ve come up with a range of $0.25 to a $0.90” per square foot and the “rate given to a business entity depends on the employment the business generates, original investment, the type of business, long term potential, and other factors — hence rates will not be the same for everyone,” Lafaele said from Cairns, Australia where he is part of the territory’s delegation attending the 10th Meeting of the Western and Central Pacific Fisheries Commission.
He said the current rental rates vary, depending on the effective year of the lease, adding there are some rentals with 10 to 20 cents per square foot. He also said the new annual rental rate is in effect for new leases but DOC has yet to decide on current tenants.
“Again, the current rate adjustment is based on the inflation index and part of the overall effort to manage the industrial park more efficiently than in the past,” he said. ”We're working on improving the park and attracting more businesses to be located in the park.”
Since the beginning of the year, the issue of rental rates at the industrial park has been raised by lawmakers, some calling on the government to look at a readjustment of rates, as rates have not been changed for a long time.
The report says that average receivables per month from park tenants are about $43,759.
LEGAL ISSUES AFFECTING THE INDUSTRIAL PARK
Also in the 4th quarter report, DOC said industrial park staff continues to work with the Attorney General’s Office to secure Lot 58, previously occupied by Pacific Products and later awarded by ANZ Bank to Tutuila Inc.
It says the first option in trying to resolve this case is ASG proposing to swap other available lots within the park — comparable to Lot 58 for Tutuila Inc. — in order for the company to operate.
The second option is for ASG to condemn this lot and compensate Tutuila the fair market value of the buildings and land. Either way, said DOC, ASG is securing the services of a local consultant to conduct an appraisal so that ASG will have a better understanding of the value of the lot to make an informed decision.
Industrial park staff is also in the process of obtaining additional information regarding existing tenants with regard to the number of employees presently working; and whether the businesses have insurance coverage as required by the terms of their lease.
And finally, at the end of the 4th quarter, DOC said industrial park arrears stood at $1.27 million for 47 tenants and the Attorney General’s Office is working on leases, which have been in arrears for more than 120 days.