February 16, 2006

By Jessica Chapman
The Kaselehlie Press

A state legislative hearing Feb. 8 considered a bill proposing to extend the terms of private leases of land in Pohnpei beyond 25 years. The change would accommodate the interests of the U.S. embassy in its pursuit of land on which to situate new facilities.

L.B. No. 329-05, introduced in December, would permit a public or private lease agreement of 55 years for the embassy and a right to renew for an additional 55 years. State government officials consider passage of the bill likely.

The state constitution imposes a general limitation on leases, public or private, to 25 years. However, exceptions have been granted, with the approval of the Pohnpei Public Lands Trust, for certain public lands. For example, the Tuna Commission holds a 55 year lease for the public land its new office building rests upon, with the option to renew for an additional 55 years. An extension of private lease terms would be precedent-setting.

A related bill, introduced two months earlier by Gov. Johnny David, expresses explicit difference of opinion on how the embassy's lease and choice of land should be handled. L.B. No. 304-05 seeks a lease of 100 years for the embassy, indicates the eligibility of public land only for the purpose, and, notably, contains a provision requiring $1 billion in rent, "payable upon signing of such agreement."

"It's part of our economic planning process," Pohnpei State Attorney General Edwel Santos said of the large sum. Based on his understanding of the governor's intent, he said, the $1 billion payment would allow the state to be "economically sufficient in no time." Santos, whose office drafted the governor's bill, also said he understood the amount to be negotiable.

The more recent bill, introduced by Sen. Fernando Scaliem, makes no reference to financial terms. Gov. David was unavailable for comment. "We saw it as an unusual bill," remarked U.S. Ambassador Suzanne Hale of the governor's bill. "I'm optimistic that the government will pass legislation that will enable us to build a new embassy," she said.

The U.S. government prefers to purchase land outright for its embassies said Stephen Druzak, the embassy's deputy chief of mission. However, it is prohibited from doing so in Pohnpei as the state constitution prohibits foreign ownership of land.

An extension of lease terms would offer some measure of reassurance to the embassy as it prepares to build a new facility. Hale reasoned financial investment in a new embassy as well as the need to comply with enhanced security requirements passed by the United States after the 1998 embassy bombings in Kenya and Tanzania justify a longer-term lease.

For example, according to Druzak, the U.S. government prefers sites of at least six acres for its embassies as a security measure. The current building in Kolonia rests on a parcel of land he estimates as significantly less than this.

The legislation was left pending before the Joint Committee on Judiciary and Governmental Operations and Land. However, the embassy has already expressed formal interest in two private parcels of land in Kolonia. A communique from President Urusemal to Gov. David dated Dec. 29, 2005 identifies them as "Etscheit property" and "Varner property."

The legislature will take up the issue when it reconvenes in May, or in an earlier special session.The U.S. Department of State's FY06 budget for its 245 embassies and consulates worldwide is approximately $1.5 billion.