BY WAYNE CHARGUALAF
The building that once housed Radhi’s — a fabric store in Hagåtña that opened in 1950 and has since become a landmark — has been unused since the passing of its founders Puranchad and Radhi Hemlani in 2004 and 2013, respectively. Although the Guam Chamber of Commerce has explored using its parking space for its own purposes, the building itself remains vacant.
Unutilized commercial spaces would seem to be a waste of economic potential. Perhaps ironically, Guam’s ongoing H-2B shortage has the potential to revive these properties as the island finds ways to adapt to the labor shortage and its ripple effects throughout the island economy.
Siska S. Hutapea, president of Cornerstone Valuation Inc., said she suspects that, with the H-2B shortage well into its fourth year, many Guam businesses will likely look toward purchasing and renovating existing properties, since it’s cheaper than brand new construction. If so, properties that have stood vacant for years may again start generating revenue.
“If you start from scratch, it’s going to take longer and there’s not enough labor,” she said. “Also, if you’re renovating, the permitting process is shorter than with a new building. So I see more and more abandoned buildings being put to use.”
The question of how much revenue on Guam is lost when commercial spaces aren’t put to their best use is an interesting one, but no government agency or private organization keeps a list of how many lots zoned for commercial activity stand vacant.
What is known with some certainty is why such properties tend to remain empty. Most viable commercial properties have a line of businesses waiting to scoop up a recently vacated commercial space. According to Hutapea, a common reason why a viable commercial space will remain vacant will be due to issues of ownership. One example is if the owner lives off-island and dies and their will is in probate. Ownerships can become more complicated if a property has multiple owners, for instance if the land is owned by one person, but a building on the land is owned by someone else.
“Typically, if we know a very prominent building that remains abandoned, it’s tied up in ownership issues,” Hutapea said.
Another issue that may arise is the value of the building and property will often affect which businesses are available to move in. The former Ben Franklin building stood vacant for years because the cost of leasing and renovating the property was too expensive for most local businesses. A major retail chain was rumored to be interested but is said to have decided against leasing the property because the property’s footprint did not make it worth their while. Eventually, property owner MV Pangelinan Enterprises took charge to renovate the building under the interest of Docomo Pacific Inc., which would eventually allow the company to lease, move in and reintroduce the building to the island as its Guam headquarters and flagship store in 2018.
Although some may argue that it’s in the government’s interest to become more involved with reestablishing businesses on vacant commercial lots for economic reasons, the government’s hands-off policy ultimately comes down to the fact that even lots zoned for commercial use are private property. As long as the owner pays property taxes, abides by all appropriate laws and there is no public health hazard — from a chemical leak, for instance — then there is little the government can do, or is interested in doing. As far as the government is concerned, as long as no laws are violated, what happens on private property is a private matter.
According to Angel R. Sablan, executive director for the Mayor’s Council of Guam, there is no island-wide policy among village mayors to list or otherwise keep track of the state of vacant private property, commercial or otherwise. Even if a mayor wanted to become directly involved with a property, they would have to go through at least one of three government of Guam agencies: the Department of Public Works, the Department of Land Management and the Department of Revenue and Taxation.
As with the island’s mayors, government of Guam agencies only get involved with private property if they must address an issue pertinent to their respective responsibilities. Public Works will get involved if the owner plans to do any type of renovation or new construction on the property, Land Management if the owner wants to rezone the property and Rev and Tax if the owner fails to pay their property taxes.
According to Sablan, as long as private citizens retain the right to do as they please with their property — within the limits of the law, of course — putting private property to its highest and best use ultimately falls on the private sector.
“As long as they pay their taxes, who are we to get involved in someone’s private property?” he said. mbj