Senate REDW presses Department of Public Lands on Marianas Beach Resort compliance, DPL cites staffing and process limits

Chair Senator Karina L. Magoffne convened the Senate standing committee on resources, economic development, and workforce to question the Department of Public Lands about the status of public‑land leases across the Commonwealth, focusing much of the hearing on Marianas Beach Resort (lease LA22‑001S) and its assignee.

The committee introduced DPL Secretary Sixto Igi Somer and requested updates after an August notice of default that cited failures under multiple lease provisions. Magoffne read DPL’s letter to the lessee, which identified (1) a failure to pay base rent under Article 5(a), (2) unpaid additional rent calculated as a percentage of gross receipts under Article 5(b), and (3) a failure to deposit the additional security required under Article 7(b).

Secretary Sixto Igi Somer told the committee that MB Capital subsequently “cleared the payments” related to the 2025 rent period and that the previously outstanding balance of $192,143.56 had been paid. “They’ve cleared it all,” Somer said. DPL also reported that the additional rent figure tied to gross receipts (inclusive of interest) for the cited period was $12,668.12 and that partial payments of $56,000 (Feb. 6, 2025) and $50,000 (July 2, 2025) were recorded prior to the cure.

Senators pressed the department on Article 7(b), which the committee described as requiring a security deposit equal to 5% of the project’s stated construction cost. Committee members cited a $45,000,000 renovation commitment in the lease and calculated the 5% security at $2,250,000. Senator Paul emphasized that the deposit should have been posted upon execution or at assignment and called the missing security “a serious violation” of the lease’s assurances. Secretary Somer said DPL is still negotiating with MB Capital about whether the deposit applies to the total construction cost or to phased work and that no payment toward the 5% construction security appears in DPL’s files.

On enforcement, Somer confirmed DPL issued a notice of default and is reviewing the file to determine next steps — which could include termination — but has not yet escalated the matter because of ongoing communications with the lessee. He described an internal flowchart that governs escalation from notice to termination and said the department is currently reviewing required engineering reports, development plans and bonding or percentage‑of‑construction evidence before moving to the next stage.

Multiple senators asked DPL to set firm deadlines. Senator Donald requested a 30‑day follow‑up; Somer declined to promise a specific date but agreed to prioritize the case and recommended reconvening the committee in 45–60 days so DPL could report more progress.

Throughout the hearing, Secretary Somer repeatedly described resource constraints at DPL. He said the accounting division has three staff members and that recent austerity measures and personnel transfers have left the department short on enforcement capacity. Somer urged patience while the department prioritizes several high‑profile leases, adding that MB Capital is a priority case but that the compliance division manages many outstanding matters across the portfolio.

The committee also reviewed other vacant or troubled leases. DPL reported the following status updates: the Marianas Resort & Spa (Marpi) matter remains subject to a court‑issued temporary restraining order and requires a joint legislative resolution review before DPL can proceed; Kanoa Resort received no responses to a recent RFP and DPL is accepting unsolicited proposals; Rota Resort was terminated after a selected respondent failed to provide a required appraisal; and Managaha Island (Managaha) was placed under a 10‑year temporary occupancy agreement (TOA) with SAI, with annual payments approximated at $300,000.

Committee members repeatedly urged DPL to provide clear timelines, documentary evidence of public‑benefit payments and security deposits, and to return to the committee with verifiable proof of compliance. The committee adjourned after setting expectations for continued oversight and an offer to consider legislative or budgetary assistance to strengthen DPL’s enforcement capacity.

What’s next: DPL acknowledged the committee’s requests and was asked to (1) verify whether the 5% construction security for Marianas Beach Resort has been deposited (total or phased), (2) provide documentary proof of any public‑benefit payments tied to the leases, and (3) prepare a targeted progress report for the committee within the next 45–60 days.