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March 29, 2025
10/09/2025 - The Department of Public Lands has issued a sweeping notice of default against MB Capital Corp., the leaseholder of the former Hyatt Regency Saipan property, citing multiple violations ranging from unpaid rent to failure to submit required development plans and public benefit contributions.
MB Capital has temporarily named the landmark Garapan hotel property Marianas Beach Resort, pending the completion of its franchise agreement with Asia Pacific for Marriott International to turn it into a Sheraton brand hotel.
In a letter dated Aug. 18, 2025, to MB Capital authorized representative David C. Hood, DPL's Compliance Division informed MB Capital that it is in default of Lease Agreement LA22-001S for failing to comply with at least eight provisions of its 40-year lease, signed in January 2022.
Among the most significant breaches, MB Capital allegedly failed to:
Pay the full base rent due for 2025, leaving a balance of $192,143.56 despite partial payments of $56,000 in February and $50,000 in July.
Pay $12,668.12 in "Additional Rent" tied to the percentage of gross receipts between October 2024 and May 2025.
Deposit an additional security deposit equal to 5% of the $45 million renovation cost, or provide proof of deposit into a Saipan-based bank.
Submit conceptual drawings and specifications for its proposed redevelopment of the iconic hotel site.
Provide 2024 financial statements audited by a CNMI-licensed certified public accountant.
Fulfill public benefit obligations, including $5,000 annual scholarships for Northern Marianas Descent students from 2022-2024, and other contributions totaling $1.5 million ($500,000 each to fund homestead infrastructure and the Garapan Revitalization project, and $300,000 distributed equally to the Department of Community Cultural Affairs, Indigenous Affairs Office, and Carolinian Affairs Office).
Obtain written consent before subleasing commercial space to Pizza Express LLC.
File its annual capital expenditure (CAPEX) budget report to show compliance with international brand standards.
DPL said it has already drawn down $204,831.68 from MB Capital's $250,000 security deposit to cover unpaid rent, but warned that the lessee must replenish the deposit within 30 days and cure the other violations or risk termination of the lease.
“If Lessee fails to cure these breaches within thirty (30) days, Lessee shall be in default of the lease and all Lessee's rights under the Lease are terminated pursuant to Article 27 (Default), including, but not necessarily limited to, Lessee's right to use the Premises. Pursuant to Article 28 (Remedies), upon termination, DPL may, upon fifteen (15) days’ written notice, enter into the Premises and take possession of all buildings, fixtures, and improvements and evict Lessee without liability of trespass. It is hoped that this will not be necessary as a last resort in addressing this matter,” wrote Compliance Division director Gregory P. Deleon Guerrero.
As of press time, Marianas Press has reached out to MB Capital for comment and for the status of the hotel project.
DPL Secretary Sixto K. Igisomar told Marianas Press that MB Capital was scheduled to meet with them this week, but has since rescheduled the meeting for next week.
Report by Mark Rabago
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