Mariana House

Mariana House ©2011 D. Greenia 
February 8, 2011

Okay, I'll bite. Let's talk about the house that the CNMI government has let rot for two years in Washington, DC at 2121 R Street NW.

The house was purchased in 2003 after then CNMI Resident Representative Pete A. Tenorio convinced the CNMI government that it was better to purchase a house than to waste money renting one. Claiming that property would only appreciate in value over time, the CNMI legislature approved the expenditure.

CNMI House Joint Resolution 13-31 granted Tenorio the authority to use his office's housing expenses account, that was provided for in his budget, to purchase of a residence that he would occupy. The resolution also allowed the Tenorio to negotiate with a bank, lending or mortgage institution for the financing of the purchase of the residence or house.

It appears that there is no mortgage on the property. A June 2008 Saipan Tribune article stated that Tenorio was "closing the doors to the Mariana House" and was prepared to "turn over the deed to the DC office to the CNMI government."

There may not have been a mortgage, but the house certainly wasn't cost free. The CNMI allocated $34,000 for costs of the "official residence" in 2008. A May 2008 article said that the representative was asking the CNMI for funds to repair the building's roof.

In October 2008 Tenorio suggested to Fitial that the house be rented after he left office since the new CNMI Delegate would be given office space and a budget provided by the federal government:
“It's an historic place and, at the same time, it's going to require some expense to maintain it, so I've recommended that we should look at a rental,” he said. “I'm leaving the final decision up to the governor. Hopefully, he will discuss this with the Legislature.”

Tenorio added that the house is the only property the CNMI owns on the continental United States and it has served as the office of every resident representative in the Commonwealth's history. The income from renting it, he said, could benefit the local government even if it nets only a few thousand dollars each month.

“It's going to be a challenge to manage it and we have all kinds of other problems right now,” he said. “But even if we just get 3 or 4 thousand dollars a month from it, that would certainly add up to a good amount of money each year.”

Charles Reyes, the governor's spokesman, said several options for what to do with the house are already on the table, including the prospect of renting it to someone.

“The governor is open to any rational proposal that would have financial gains for the Commonwealth,” he said, noting that other options include selling the house or letting the new Washington delegate use it even though he will have a congressional office.

“There are several options and we're open to proposals,” he added.
After the 2008 election when former CNMI Resident Rep. Pete A. Tenorio was replaced by CNMI Delegate Gregorio (Kilili) Sablan, no action was taken on selling or renting the house. It is unbelievable that the prime property located in a nice neighborhood near Embassy Row has sat idle for two years.

When a house is unattended it deteriorates rapidly. All properties need to be routinely monitored and repaired. The house could develop mold if the electricity is off and there is no ventilation or air conditioning in summer months. Water pipes can burst if they freeze during winter months causing extensive damage.

The Saipan Tribune reported that a neighbor complained because of rats from the property. Infestation of rats in the building is not surprising; rodents often inhabit empty buildings gnawing through electrical wires and anything else they can find. There are strict regulations on pest control in Washington, DC and all US cities. Failure to correct the problem could result in fines.  The city could even put a lien on the property. Who knows what condition the place is actually in? It may now require major renovations before it can even pass inspection to be rented out.

CNMI Public Auditor Mike Pai claimed that the property should be rented because of an unfavorable real estate market in Washington, DC. Yet, of all large metropolitan areas, Washington, DC’s market is one of the most stable.

Every person who owns a house knows that it takes money for routine maintenance and insurance.

The Tribune quoted an CNMI official as saying that the property is exempt from taxes because it is used for government purposes.  Maybe it was used for government purposes, but it isn't now and the status would change if it is rented.

According to the DC Government Office of Tax and Revenue there is no tax exemption for property owned by state or territory governments (unless there is an exemption under some statute not clearly listed). “Applications for exemption for property owned by foreign governments must be made through the U.S. Department of State, Office of Foreign Missions.”

The DC tax records (below) lists the property as "E6- Foreign." According to a friend in DC, "The State Department should have a record of it, but as the CNMI is not a foreign government somebody may owe the DC Government some back taxes—this may be especially true if the CNMI Government is not in control of the property."




With the CNMI in such desperate financial state it is amazing that the house has not been sold or leased after it was vacated years ago. There are currently officials proposing renting the property, but renting a house requires money to hire a company to oversee the property and to make any repairs.  The CNMI has no funds.

Reportedly two individuals wanted to purchase the property in 2008 for $2 million. Perhaps officials thought they didn't need the money. Now they are working to identify a property management company. Some have suggested that Knight, Seimer or Willens will have a role in the sale or rental. That too would not be surprising.

What is amazing is the neglect of valuable property and the loss of income. How can the CNMI officials continue to ask Uncle Sam for money when they repeatedly demonstrate waste and neglect with their assets and finances?

14 comments:

Anonymous said...

Why the speculation on if some DC pals of Fitial are lurking around the house? The neighbor spotted rats.

Anonymous said...

Every day deeper in the hole and more reasons we didn't need to be are revealed

Anonymous said...

If the CNMI gvt. got out of paying taxes because the house-office was being used for government purposes, then it should have to pay taxes when it is not. If vacant, it was not being used for government purposes. Great. Now we have another bill.

Anonymous said...

Hi. One small comment. I am pretty certain the Marianas House was purchased by the CNMI Govt. long before 2003 (back in the early 80s in fact),as stated in your blog. Donna J. Cruz

Wendy said...

Hi Donna

The oldest article I see Is this May 2003 Saipan Tribune article that says: "The House of Representatives sees the practicality in the CNMI owning a residence for its Representative in Washington D.C., as opposed to merely renting a place like what the Commonwealth has been doing.

By adopting House Joint Resolution 13-31 Monday, legislators agreed to the request made by Washington Rep. Pete A. Tenorio to allow his office to purchase a residence using the funds earmarked for the Resident Rep.'s housing expenses.

House members acknowledged that for the last 25 years, the Commonwealth has expended over $800,000 for the housing needs of its Washington representatives."

Anonymous said...

Wendy
Donna Cruz is correct. The Marianas House was purchased in the 80's when Ed Pangelinan was the CNMI's Washington Representative (later renamed Resident Representative to the United States.) It was purchased for use as an office not as a residence for the Washington Representatives or the Resident Representatives. The 1983 transaction was the purchase of a house to be used as a residence.Prior to that, the persons who represented the CNMI received a housing allowance.

It should prove to be a great investment(even in this depressed market) , provided some money is spent for repairs and it is managed properly. It should not end up like the Lighthouse on Navy Hill, La Fiesta and so many other government owned eyesore

Anonymous said...

If the house was purchased in 1983 then the JHR must have been to purchase a residence in 2003? Is it a different place or building? Very confusing.

Wendy, it looks like the Tribune reporter read your blog and then interviewed people on the tax issue. Today there is an article on the tax issue you wrote about here: http://www.saipantribune.com/newsstory.aspx?cat=1&newsID=106846

Wendy said...

Anonymous 12:23

Or more likely the reporter had the same investigatory questions in her mind as I do. Anyone looking at this story would investigate the cost of the taxes. Building are not free, regardless of whether or not they are occupied. The owner always has at least tax and insurance costs.

I am also confused about what property the 2003 Saipan Tribune articles are talking about, if this property was actually purchased in 1983. Another article stated that this was the only property that the CNMI owned in the mainland. Can someone please explain this?

David said...

The date in my Anonymous' 2/9/2011 11:12 pm posting is incorrect. The date in the second sentence should be "2003" not "1983". Sorry for the confusion. To avoid any confusion, the earlier purchase was for office space and the 2003 purchase was for a home.

Wendy said...

Thanks David

Where is the other building/house that was purchased in 2003. Was it sold?

Anonymous said...

Wendy: I believe the residence Pete A. Tenorio proposed to purchase never went through. I am relatively certain the CNMI never purchased a residence for our Wash. Rep. They always rented places (paid by the CNMI I believe). Donna J. Cruz

David said...

Wendy

I have no knowledge of a residence ever being purchased. Perhaps a purchase was authorized , but never materialized due to the high cost of housing in the Washington, DC area. The people who were elected to represent us in the US and their staff who were recruited from the CNMI received some type of housing allowance. Perhaps someone with first hand knowledge would shed some light on this matter.

David

Wendy said...

Thanks so much Donna, I get it!

Anonymous said...

Wendy: One more bit. I read an article in today's Tribune which said former Wash. Rep. and Diego Benavente thought the Marianas House original purchase price was about $200,000. The the best of my recollection, the house was purchsed for between $300,000-350,000. Donna J. Cruz