Mon. Dec 9th, 2019

Aimeliik golf course project may get terminated

Aimeliik State Public Land Authority (AIMSPLA) is contemplating terminating the Palau Golf Incorporated (PGI) lease agreement according to sources within the Authority.

A source from Aimeliik State said that the AIMSPLA Board in number of meetings is nearly unanimous in their agreement to terminate PGI lease agreement for not meeting the terms of the contract.

In a phone interview with AIMPLA Director Junior Ueki, he said that the Board in its latest meeting with PGI director had decided not to take any further action on the PGI lease until the contract lapses in 2020.

“When the contract reaches its February 2020 deadline, the Board may entertain requests from PGI to renew the contract or any other party interested in the area,” reported Ueki.

Meanwhile, Alan Seid representing PGI says that the communication with Aimeliik State Public Land Authority is ongoing.  “Yes, there are issues but we believe that they can be resolved.  We’ve already gave them a proposal and we expect to meet next week and hopefully resolve the issues and allow the project to commence.”

Palau Golf Incorporated renewed its previous lease contract with Aimeliik State Public Land Authority in 2015 for a 2 million square meters of land for a term of 99 years commencing from the date of the first contract, April 24, 1989.  The renewed lease reinstated a previously terminated lease agreement and amended parts of it including extending its term to 99 years, increasing room royalty rates and adding a default clause which stated that if by February 2020, no hotel or villas have been constructed on site, the contract will be terminated.

Lease Agreement 3.2.1B states in part, “In the event that the Lessee has either not commenced construction activities on the Premises within (2) years of the receipt by the Lessee of all licenses and permits that may be required…..or not commenced construction of hotel facility on the Premises by February 6, 2020, Lessor may terminate this Lease by giving Lessee written notice of such termination.”

Sources say AIMSPLA seeks to terminate the contract with PGI and enter into contract with another company.

PGI has recently begun to make clearings in certain sections of the leased land along the Compact Road where they had planned to construct a 500 room hotel and villas.