Pacific Star Resort and Spa in Tumon is set to be sold to Eastern Contractors Corp., a construction company based in Suwanee, Georgia, for $33 million, though the sale still requires court approval. The District Court of Guam is currently reviewing a motion filed by Marianas Properties on February 17, requesting authority to sell the hotel to cover debts, including a multimillion-dollar loan from the Bank of Guam.

Sale Driven by Financial Pressures

According to court documents, Marianas Properties has been struggling with outstanding debts since the Bank of Guam declared the company in default of a 2016 loan. The loan balance stood at $29.5 million as of August 2023. To avoid a foreclosure auction, Marianas Properties filed for bankruptcy in September 2023, freezing the scheduled mortgage auction.

As part of the bankruptcy proceedings, Marianas Properties is requesting the sale of Pacific Star to resolve its financial obligations. The $33 million sale price aligns with appraisals for the hotel, which is located on a 6.5-acre property along Tumon Bay. The hotel’s insurance claim for Typhoon Mawar damages, estimated at over $25 million, will remain with Marianas Properties, according to the submitted documents.

Construction Firm’s Interest and Background

Eastern Contractors, which specializes in industrial general contracting in North America, has committed to purchasing the hotel. The firm is particularly involved in electric vehicle manufacturing plant systems, but it is expanding its interests into the hospitality sector. Ajay Pothen, president of Marianas Properties, noted that the asset purchase agreement for Pacific Star was signed on February 7, 2024, in response to a deadline given by the Bank of Guam.

“The proposed Sale Transaction is in the best interests of the Debtor, its estate, and its creditors,” Pothen stated in the court filing, emphasizing that the sale is a necessary step in resolving the company’s debts and moving forward.

Other Interested Parties and Negotiations

While Goodwind Development Corp., the owner of Micronesia Mall, also expressed interest in purchasing the property, they ultimately could not agree on the sale terms. Goodwind offered $33.5 million but was unable to finalize the deal due to unresolved issues. The company backed out of negotiations on February 16, 2024, leaving Eastern Contractors as the sole bidder for the property.

Court filings also indicate that Goodwind was given a chance to be the backup purchaser, but their inability to reach a solid agreement ended the discussions.

History of Pacific Star Resort and Spa

The Pacific Star Resort and Spa has undergone several ownership changes over the years, with previous owners defaulting on multimillion-dollar loans. Before Marianas Properties, the hotel was operated as Marriott Resort and Spa until 2014, when the Marriott brand exited Guam.

Prior to that, UFB Guam Hotel Corp. owned the property and operated it as Pacific Star until it filed for Chapter 11 bankruptcy in 2009. In the early 2000s, Republic of Nauru Guam Inc. owned the hotel before selling it following foreclosures on two loans, totaling over $21 million.

Projected Impact and Community Concerns

If approved by the court, the sale to Eastern Contractors will mark the third ownership change for the property in recent years. The hotel’s new owners will likely face challenges as they restore the property, which has suffered from operational disruptions, including a stint as a quarantine hotel during the COVID-19 pandemic and major damage from Typhoon Mawar in 2023.

The sale approval hearing is scheduled for March 12, 2024, in the District Court of Guam, with Chief Judge Frances Tydingco-Gatewood presiding over the proceedings. If the sale is finalized, it will end a long period of financial instability for Marianas Properties and potentially bring new investment into the hotel, impacting the local economy in Tumon and the broader region.

Originally reported by Joe Taitano in Pacific Daily News.