LOWER BASE Saipan — The Northern Mariana Islands’ administration is speaking with three companies regarding a plan to construct a six-story building that will house all public offices through a turnkey arrangement. The arrangement will allow the contractor to build the facility and have government agencies move in.

The move is aimed at saving $3 million annually in rent and doing away with such line-item expenditures in future fiscal year budget appropriations. The plan would not obligate the government to spend any upfront capital for the facility’s construction.

Anthony Pellegrino project consultant and owner and president of Saipan Sea Ventures told the Journal “We are talking to three different groups right now. We’re still talking. We know what we want.” He said the government is speaking with the Korea-based World Construction Co. Ltd. parent company of World Resort Saipan.

According to Pelligrino once the building is completed and occupied the government intends to pay a mortgage of $1.5 million annually for 25 years. He said this would entail $37.5 million in savings compared to what the government would spend in rent over the same period — $75 million.

The facility will be built in Susupe where the Gov. Pedro P. Tenorio Multipurpose Center and the old courthouse are allocated it will will cost approximately $22 million to construct. Paying it back at $1.5 million a year in about 25 years would give the construction and financing company $15.5 million in investment returns — which amounts to 4.5% annual interest rate. The government will own the building after full payment. Pellegrino said this is a “fair deal.”

“The government will own it (afterward). Right now the government doesn’t own anything (to house all public offices) ” he said.

The source a top official of one of the biggest construction companies in the region explained that a $22-million investment could fetch higher returns of up to 6%.

Pellegrino said the government wouldn’t have to source new funds for the annual payment as the mortgage is the budget already appropriated for rent.

The company will be allowed to hold the public land where the building would be situated and the building itself as collateral and may lock the government out if it fails to pay during the mortgage period Pellegrino said. He said that the government cannot use the facility as loan collateral or lease it to private offices for the duration of the payment period.

Pellegrino told the Journal he is working with Brian P. Reyes owner and president of RPCF Inc. a general construction firm who in turn will be working with the company that will do the project.

Charles P. Reyes Jr. the governor’s press secretary said Pellegrino and Reyes are “involved in the initiation of the project.” He said the project would go through proper procurement procedures.

“Because it is such a large project we have to conduct research and determine what we want before proceeding. We cannot just open the doors to a public bidding without knowing the specifications and the likely costs involved or consulting with experts. In fact it is probably to the CNMI’s interest to consult with as many companies as possible and then open the doors to a competitive bid ” Reyes told the Journal.

By law the companies that have become privy to the specifics of the government’s plan through the ongoing discussions are not allowed to bid.

Reyes said the project would accomplish three things. “First it would conveniently locate all government offices in one location so consumers of government services can have their needs addressed at one convenient location. Second it would result in significant cost savings. Third it would allow the CNMI government to use its valuable Capitol Hill property more profitably for private developments ” he said.

Reyes said the government wants to reserve the Garapan Fishing Base area in front of Kristo Rai Church for private development because it is considered prime public real estate. He said the government is “Taking the same approach for Capitol Hill where many government offices are currently located. “The idea is to strategically use our public real estate for maximum economic benefits.”

According to Pellegrino the new facility which will be named the “CNMI Capitol Building ” and will occupy a total land space of 250 000 square feet. On the first floor will be all frontline agencies that issue permits — Coastal Resource Management Office Division of Environmental Quality; Historic Preservation Office; and the Division of Revenue and Taxation among others.

The first floor will also house an amphitheater with a seating capacity of 1 500 people. This will replace the multipurpose center which will be leveled to the ground along with the old courthouse prior to construction of the new building Pellegrino said.

On the second floor will be the Legislature. The Capitol Hill building currently housing the Legislature was built in 1955.

On the third fourth and fifth floors will be all other agencies; and on the sixth will be the governor’s office the lieutenant governor’s office and the attorney general’s office.

The new facility which would accommodate up to 2 000 government employees is scheduled to break ground between October and December said Pellegrino. He said agencies occupying the old courthouse would have to move out before then.

Pellegrino said 10 months would be allotted for the construction period and another two months for finishing touches. He said the ribbon cutting is scheduled for Jan. 9 2008. According to Pelligrino a survey of all government agencies is currently underway to determine the office space they would need.

Pellegrino said the idea to build a centralized government building came up during a dinner he had with NMI Gov. Benigno R. Fitial at Aqua Resort Club early this year. MBJ