(1) Commercial lease is a leasehold interest in real property between the CLTC and a tenant (hereinafter referred to as “”Commercial Lessee””) for the commercial use of real property under the management of the CLTC.
(2) Commercial license is an agreement between a tenant (hereinafter referred to as the “”Commercial Licensee””) and the CLTC which permits certain activity to be conducted upon real property in the inventory of the CLTC, but does not confer upon the licensee any title or leasehold interest, and is terminable upon cessation of the approved activity. Pursuant to § 75107(c) of Chapter 75, Title 21 GCA, the Commission is authorized to grant licenses for terms not to exceed twenty-one (21) years in each case, to:

(A) public utility companies, or corporations as telephone lines, electric power and light lines, gas mains, and the like; or
(B) for lots within a village in which lands are leased under the provisions § 75107(a) of Chapter 75,
Title 21 Guam Code Ann., to:

(i) churches, hospitals, public schools, post offices, and other improvements for public purposes; or
(ii) theaters, garages, service stations, markets, stores, and other mercantile establishments (all of which shall be owned by the
§ 75107(a) lessees of the Commission or by organizations formed and controlled by said lessees).

(3) Commercial use means commercial agriculture, commercial aquaculture, and any permitted use or a conditional use expressly allowed on an “”A,”” “”R1,”” “”R2,”” “”C,”” “”P,”” “”S-1,”” or “”PF”” zoned property pursuant to §§ 61304, 61305, 61306, 61307,61308, 61312 and 61313 of Article 3, Chapter 61 of Title 21, Guam Code Ann.. Commercial use includes mineral extraction when specifically approved by the CLTC and I Liheslaturan Guåhan (the Guam Legislature). The appropriate regulatory clearances will be required for all commercial uses of CLTC lands.

(4) Tenant means an applicant who has been approved for either a commercial lease or license, and can also be referred to as a “”Commercial Lessee or Commercial Licensee”” in this Act.

(b) Designation of Available Land for Commercial Use.

(1) Notwithstanding § 75107(f) of Chapter 75 of Title
21, Guam Code Annotated, and Section 6.9 of Exhibit A of
Public Law 23-38, the CLTC may declare and designate that certain lands, not to exceed nine percent (9%) of the total remaining unassigned Chamorro Land Trust Commission land area inventory, “”are not required for § 75107 leases to native Chamorros for residential, subsistence agriculture, or subsistence aquaculture, and are
available for commercial leasing or licensing to the general
public pursuant to § 75105(d) of Chapter 75, Title 21
GCA.”” Said declaration shall be in the form of a Board
Resolution approved by the Commissioners at a duly scheduled meeting of the CLTC held after a CLTC public hearing on the specific lot and area of land to be designated. The approved CLTC resolution shall be transmitted to I Liheslaturan Guåhan within thirty (30) days from the date of passage of the resolution.(2) I Liheslaturan Guåhan shall have sixty (60) days to review the Resolution declaring the list of available lots identified in this Subsection, and may conduct public hearings on said lot list during this sixty (60)-day period.

(3) The lots identified in this Subsection may be leased or licensed by the CLTC to the general public pursuant to § 75105(d) of Chapter 75 of Title 21, Guam Code Ann., for commercial use and for a term not to exceed twenty-five (25) years; or licensed pursuant to § 75107(c) of Chapter 75, Title 21, Guam Code Annotated, for a term not to exceed twenty-one (21) years, unless
otherwise approved by I Liheslaturan Guåhan for a longer
term.

(4) The CLTC shall not initiate any solicitations for commercial leasing or licensing until at least sixty (60) days have elapsed from the date I Liheslaturan Guåhan received the transmittal of the CLTC Resolution and list in accordance with this Section.

(5) Notwithstanding § 75105(b) of Chapter 75 of Title 21, Guam Code Annotated, all income arising out of any lease or license of those properties declared in this Subsection shall be credited to and deposited in the Chamorro Land Trust Survey and Infrastructure Fund until
2020, and to the Chamorro Home Loan Fund thereafter.

(6) Any solicitation for interest or proposals, prior to the enactment of this Act, for commercial activity on CLTC land with the intent of entering into a commercial lease shall be null and void.

(c) Lease Agreement Stipulations. The execution of commercial lease agreements or licenses of the available properties identified pursuant to this Section shall be subject, at a minimum, to the following stipulations:

(1) Notice of Land Designated to be Available for Commercial Use. Solicitation for the leasing or licensing of land designated as available for commercial use shall be published at least thirty (30) days prior to the deadline for submittal of proposals from prospective lessees or licensees.Notice shall be posted on the websites of the CLTC and the Department of Land Management (DLM) continuously, and through any methods of electronic publication capable of providing notice to the general public, and at least once in a newspaper of general circulation.

(2) Award of Lease through Competitive Bid. The lease or license for the commercial use of CLTC land designated as available for commercial activity shall be awarded through a competitive bid process to entities determined to be responsible and responsive, as defined in Guam’s procurement law, to the requirements stipulated by the CLTC. However, in the event that a designated available land has an existing commercial activity by virtue of a previous authorization, this Act shall not be interpreted to invalidate existing commercial leases or licenses where lessee or licensee has not defaulted during the entire term of the lease or license, and lessee or licensee has complied with the laws of Guam. At the expiration of a lease or license, and all options to renew that lease or license, the CLTC shall reconsider its designation as available land and comply with all other provisions of this Act.

(3) Unsolicited Proposals. The CLTC may also accept unsolicited proposals for the development and commercialization of CLTC land designated as available for commercial use, but must subsequently place such proposals to competitive solicitation.

(4) Posting of Awards. Awards of leases and licenses shall be posted, within five (5) working days from the date of award, on the CLTC and DLM websites for the term of the lease.

(5) Minimum Annual Rent. Annual rent shall be no less than ten percent (10%) of the current appraisal of fair market value of the land that is to be leased. Rent shall escalate at a minimum of five (5) year intervals based at a minimum upon current appraisal of fair market value of the land being leased, but in no event shall rent be lower than the rent charged during the previous five (5) year period. The rent to be charged on any request to exercise an optionto renew an existing lease shall also be based on the current appraisal of the fair market value of the land at the time the option to renew is exercised.

(6) Participation Rent.

(A) Definition. The tenant pays to the CLTC a mutually agreed upon percentage of the revenues generated above a mutually agreed upon revenue threshold.

(B) Applicability. Participation rent shall be applicable from the fifth (5th) anniversary date to the last day of the lease. The annual participation rent shall be made in four (4) equal quarterly installments.

(7) Advance Rental Payment. CLTC may require accelerated or advanced rental payments as a condition of the lease.

(8) Rent Amendments and Payment Schedules. Tenants may submit written requests for temporary reductions in rent. Tenants shall submit audited financial statements covering the previous three (3) year period as supporting documents. CLTC shall consider the current financial position of the tenant and the prospect for improvements in the tenant’s financial position, market conditions, the benefit to the Trust in temporarily reducing the rent, and such other information as may be required in considering tenant’s request for rent reductions. Any rent reductions authorized by CLTC shall not exceed one (1) year but may, upon written application by the tenant, be extended by the Commission if such extension would be beneficial for the Trust. As temporary rent reductions are intended to assist tenants over a short period of time, tenants must agree in writing that such temporary reductions shall in no way affect the annual amounts due or the schedule of rent escalations for future option terms identified in the lease agreement. Requests for rent reductions shall be subject to Commission approval. The CLTC shall not allow the exercise of options for additional terms unless all past

due rent is paid. All amendments of rent and payment schedules shall be fully documented.

(9) Payment Plans. Requests to develop a payment plan for back rent shall be submitted in writing with the reasons for the request. In addition, tenants shall submit a copy of its audited financial statements covering the previous three (3) year period. Payment plans must include a provision for payment of interest on the unpaid balance. In addition, payment plans must contain the requirement that late fees using the industry standard be paid, in the event the lessee does not make payments as scheduled, and if the lessee is not deemed to be in breach of the lease. Financial institutions must be provided with copies of approved payment plans if estoppel, mortgage or other such agreements require such notification. To the extent possible, payment plans for outstanding rent must be paid off within the fiscal year to avoid budgetary problems within CLTC.

(10) Taxes and Assessments. Tenants shall pay all taxes and assessments lawfully levied against the leased premises and against any business conducted thereon or in connection therewith. Tenant shall also pay all charges for utility services furnished or provided to the leased premises.

(11) Interest for Late Payment. All rent in arrears shall bear interest at a rate of four percent (4%) per annum in excess of the prime rate, calculated daily and compounded monthly, without demand, from the date it should have been paid to CLTC, until actual payment to CLTC.

(12) Environmental Site Assessment (ESA). Prospective tenants shall be required to prepare at their own expense, a Phase I Environmental Site Assessment (ESA) of the leased property to serve as a baseline of conditions at the site prior to the start of the lease. The comprehensiveness of the assessment shall be determined by CLTC in collaboration with the Guam Environmental Protection Agency. The Phase I ESA shall be referenced in any lease or license agreement for the property. Prior to the issuance of any agreement, tenants or prospective tenants must conduct a Phase I ESA of the site at tenant’s expense.(13) Condition of Land After Use Period. At the end of the lease or license period, or upon termination, tenant shall restore the land to baseline levels established at the start of their lease or license, or better/higher environmental levels agreed upon in the lease or license, and shall bear all expenses relating to such restoration and Phase I and Phase II evaluations. However, in the case where mineral extraction or the extraction of natural resources at the site was authorized initially in the lease or license agreement, the site shall be returned to the CLTC in the better/higher environmental end-state that was agreed upon at the beginning of the lease or license. CLTC shall require that a performance bond be provided to ensure that the property is returned in an acceptable end-state, but that said bond shall not relieve the lessee of the responsibility of returning the land to the required baseline state.

(14) Tenant Requirements. All lease and license agreements shall require tenants and subtenants to have business liability insurance that indemnifies and holds CLTC harmless, and shall require the tenant to respond to CLTC requests for information on a timely basis.

(15) Improvements to CLTC Property. All lease and license agreements shall require that any improvements made to or upon the real property shall belong in title to the CLTC upon termination or expiration of the lease or license, and that any removal required by the CLTC of improvements or items remaining on the property shall be the responsibility of the tenant at no cost to the CLTC.

(16) Processing Fees. Tenants shall pay for those expenses associated with the processing of leases, amendments, assignments, estoppels, consents or other such documents, including, but not limited to, attorneys’ fees, appraisal fees, title report fees, survey fees, credit report fees, recording fees, and documentation fees, but not including CLTC staff time. Payment of fees shall be made prior to document recordation or pick up.

(17) Business License. Applicants must be licensed to do business in Guam prior to the execution of a lease orlicense, and all tenants must maintain a valid license to do business in Guam during the term of their lease or license.

(18) Compliance with Environmental Laws. All activities on leased or licensed available real property shall be in compliance and maintained in accordance with existing environmental laws. Failure to comply with environmental laws shall be a material default by tenant.

(19) Events of Default; Termination. In any of the following events (each an “”Event of Default””):

(A) if rent or any part thereof shall not be paid on any day when such payment is due, CLTC may, at any time thereafter, give notice of such failure to the lessee, and if the failure is not remedied by the lessee within five (5) days after the giving of such notice; or

(B) if the lessee shall fail or neglect to perform or comply with any of the terms, covenants or conditions contained in the lease (other than the covenants to pay rent) on the part of the lessee to be performed or observed, CLTC may, at any time thereafter, give notice of such failure or neglect to the lessee and the lessee:

(i) if the matter complained of in such notice is capable of being remedied by the payment of money, has not corrected the matter complained of within a period of five (5) days after the giving of such notice; or

(ii) if the matter complained of in such notice is not capable of being remedied by the payment of money has not corrected the matter complained of within a period of twenty (20) days after the giving of such notice, or if a period of more than such twenty (20) days is reasonably required to remedy, with reasonable diligence, the matters complained of in such notice, has not forthwith commenced to remedy the same and diligently prosecute the remedying of the same to completion;(iii) if an event of insolvency shall have occurred with respect to the lessee, or

(iv) a breach of an obligation by the lessee which has resulted in cancellation of insurance coverage where the lessee has not prior to or concurrent with such cancellation replaced such coverage with comparable coverage or breach of an obligation where there has been a notice of cancellation of insurance coverage which has not been cured and where the lessee has not, within the period of time set out in such notice (or within ten (10) days where no period is set out therein) replaced such coverage with comparable coverage or which is otherwise a breach of the obligations respecting insurance; or

(v) abandonment of the project by the lessee; or then the CLTC, at its option, may terminate the lease by notice to the lessee, in which event such termination shall be effective immediately upon the delivery of such notice and may enter upon the property with or without process of law and take possession thereof.

(20) Right to Cure Defaults. Without limiting any other remedies the CLTC may have arising out of a lease or at law in respect of any default in the performance of the lessee’s obligations under a lease, the CLTC shall have the right, in the case of any default and without any re-entry or termination of a lease, to enter upon the property and cure or attempt to cure such default (but this shall not obligate the CLTC to cure or attempt to cure any such default or, after having commenced to cure or attempt to cure such default, prevent the lessor from ceasing to do so) and the lessee shall promptly reimburse to the CLTC any expense incurred by the CLTC in so doing and the same shall be recoverable as rent.

SOURCE: Added by P.L. 33-095:2 (Nov. 9, 2015).