LE~SE AGPli.:EMENT
'
W\DE PURSUANT TO
THE COVENANT TO EST~BLISH A COMMONWEALTH OF THE
NORrHERN Ml\.RIANA. ISLANDS
IN POLITIC~L UNION WITH THE UNIT~D STATES OF ~MERICA

THIS LEl\SE AGREEMENT is made this
19

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f.k.

day of

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by and between the MARIANAS PUBLIC LAND CORPOR'I\.TION, a

corporation created under and existing pursuant to the
Constitution of the Northern Mariana Islands, the COMMONWEALTH
PORTS AUTHORITY, a public body organized and existing under and
pursuant to Public Law No. 2-48, and the COMMONWEALTH OF THE
NORTHERN MARIANA ISLANDS, hereinafter referred to respectively
as the "Corporation", the "Authority", and the "Commonwealth",
and collectively as the "Lessors", and the UNITED STATES OF
AMERICA., as lessee, hereinafter referred to as the "United
States".
WITNESSETH:

that

WHEREAS, the Marianas Political Status Commission, being
the duly appointed representative of the people of the Northern
Mariana Islands, and the Personal Representative of the
President of the United States for Micronesian Status
Negotiations entered into a Covenant to Establish a
Commonwealth of the Northern Mariana Islands in Political Union
with the United States of America (Public Law 94-241: 90

ST~T

263) on the 15th day of February 1975, in order to establish a
self-governing commonwealth for the Northern Mariana Islands
within the United States political system and to define the
future relationship between the Northern Mariana Islands and
the United States: and
WHEREAS, said Covenant became mutually binding when it was
respectively approved by the United States of America, the
Mariana Islands District Legislature, and the people of the
Northern Mariana Islands: and

 WHEREAS, Sections 802 and 803 of said Covenant provide that
certain property in the Northern Mariana Islands, as
hereinafter described, will be made available to the United
States by lease to enable it to carry out its defense
responsibilities: and
WHEREAS, noting that the extent of land required by the
United States had been determined and the precise boundaries
thereof agreed upon, and desiring that all basic arrangements
relative to land be reduced to a formal land agreement, the
parties to said Covenant also entered into a Technical
Agreement setting forth additional terms and conditions of the
lease to the United States: and
WHEREAS, said Sections 802 and 803 and said Technical
Agreement became effective on the 9th day of January 1978, in
accordance with Presidential Proclamation No. 4534 signed on
the 24th day of October 1977: and
WHEREAS, the Corporation is the legal land entity
established by the Constitution of the Northern Mariana Islands
to manage and dispose of surface public lands in the Northern
Mariana Islands, including those lands on Saipan, Tinian and
Farallon de Medinilla Islands as described in said Section 802:
and
WHEREAS, subject to the provisions of said Section 802 and
said Technical Agreement, the Authority is the fee title holder
of certain additional surface lands on Tinian Island,
hereinafter described: and
WHEREAS, the Commonwealth has been authorized by Public Law
No. -?,- ~0, to execute this Lease Agreement as it applies to the
waters immediately adjacent to the surface lands located on
Tinian and Farallon de Medinilla Islands described in said
Section 802: and

2

 WHEREAS, the United States has requested that said surface
lands and adjacent waters be made available at this time;
NOW, THEREFORE, for and in consideration of the Premises,
and the rent hereinafter reserved and of the covenants herein
contained on the part of the United States to be observed and
performed, it is hereby agreed as follows:
ARTICLE 1.
a.

GRANT OF PREMISES

Grant by Corporation.

The Corporation does hereby

grant, demise, and let unto the United States, subject to all
the terms, covenants and conditions hereinafter set forth, and
the United States does hereby accept and rent from the
Corporation the following real property located in the
Commonwealth of the Northern Mariana Islands:
(1)

On Tinian Island, approximately 17,089 acres

(6,916 hectares) of land, described as that land shown in
Exhibit A, attached hereto and made a part hereof, less the
land described below in Article l.b.;
(2)

On Saipan Island, approximately 177 acres (72

hectares) of land at Tanapag Harbor, as further described in
Exhibit B, attached hereto and made a part hereof; and
(3)

On Farallon de Medinilla Island, approximately

206 acres (83 hectares) of land encompassing the entire island,
as further described in Exhibit C, attached hereto and made a
part hereof.
b.

Grant by Authority.

The Authority does hereby grant,

demise, and let unto the United States, subject to all the
terms, covenants, and conditions hereinafter set forth, and the
United States does hereby accept and rent from the Authority
approximately 709 acres (287 hectares) of land located on
Tinian Island, Commonwealth of the Northern Mariana Islands,
comprised of all that parcel of land described in Exhibit D,
attached hereto and made a part hereof, less that certain
portion of Lot 221 T 01 (44,409 square meters) as shown on
3

 Cadastral Plat No. 221 T 00, approximately 2 acres {1 hectare)
in size, located within the lands described in said Exhibit D.
c.

Grant by Commonwealth.

The Commonwealth does hereby

grant, demise, and let unto the United States, subject to all the
terms, covenants and conditions hereinafter set forth, and the
United States does hereby accept and rent from the Commonwealth
pursuant to Section 802 of the Covenant waters of the Commonwealth
immediately adjacent to the leased surface lands on Tinian and
Farallon de Medinilla Islands, Commonwealth of the Northern Mariana
Islands, hereinabove leased to the United States by the Corporation.
The United States shall have the right within the waters to
facilitate access and egress to the leased surface lands and to
construct reasonable port facilities; PROVIDED, that the United
States shall disturb to the minimum extent possible the seabed and
subsoil in exercising its right of construction.

The Commonwealth

retains the right, without undue interference to the rights of the
United States under this Lease Agreement to exploit the living and
non-living resources of the waters immediately adjacent to the
leased surface lands.
d.

Definition of Premises.

As used hereinafter, the term

"Premises" shall be construed to refer collectively to all of
the lands and waters hereinabove described in this Article.
ARTICLE 2.

TERM

To have and to hold the above described Premises unto the
United States, its successors and assigns, for a term of fifty {50)
years, commencing on the first day of January 1983, SUBJECT,
however, to:

{1)

the terms and conditions of the "Land Acquisition

and Deferred Payment Agreement" executed simultaneously with this
Lease Agreement; and {2)

the terms and conditions of a lease

covering a portion of the Premises, made as of the 11th day of June
1965, between the Government of the Trust Territory of the Pacific
Islands, as lessor, and the Micronesian Development Company,
Inc., as lessee, which lease shall be allowed to continue in
4

 accordance with the provisions of Article 6 of this Lease
Agreement.
ARTICLE 3.

OPTION TO EXTEND

The United States shall have the option of renewing this
Lease Agreement in whole or in part for an additional term of
fifty (50) years if it so desires at the end of the first term
hereof.

If the United States elects to exercise its option to

renew this Lease Agreement, the United States must provide
notice of its intent to renew during the period 1 January to
30 September 2032.
ARTICLE 4.

PURPOSE AND SCOPE

The Premises are leased and may be used for any purpose
required to carry out the defense responsibilities of the
United States.

Nothing herein shall derogate from the rights

of the parties provided under the Covenant.
ARTICLE 5.
a.

RENT

Rent Amounts.

The United States shall pay to the

Lessors in full settlement of this Lease Agreement, including
the second fifty (50) year term if exercised under the provisions
of Article 3 hereof, the total sum of $19,520,600, determined
as follows:
(1)

for the property on Tinian Island, $17,500,000;

(2)

for the property at Tanapag Harbor, Saipan

Island, $2,000,000; and
(3)

for Farallon de Medinilla Island, $20,600;

all of which above sums shall, in accordance with the terms of
said Covenant and Technical Agreement, be adjusted by a
percentage which is the same as the percentage change in the
United States Department of Commerce composite price index from
the date of signing of said Covenant to the effective date of
this Lease Agreement.

It is hereby agreed that the total

adjusted sum to be paid to the Lessors by the United States is
$33,000,000.
5

 b.

Manner of Payment.

It is agreed by the parties hereto

that the United States shall discharge its responsibilities
under this Article by paying to the Corporation all monies due
hereunder in accordance with the terms and conditions of the
"Land Acquisition and Deferred Payment Agreement" executed by
the United States, the Commonwealth, and the Corporation
simultaneously with this Lease Agreement.
ARl'ICLE 6.

LEASE TO MICRONESIAN DEVELOPMENT COMPANY, INC.

As noted in Article 2 of this Lease Agreement, a portion of
the Premises is encumbered by a lease dated the 11th day of
June 1965, to the Micronesian Development Company, Inc.,
hereinafter referred to as "MDC", which lease shall be allowed
to continue in accordance with its terms.

The United States

and the Corporation will consult and cooperate on specific
actions by either party that may affect or involve possible
adjustments or termination of the MDC lease.

Each party will

render full assistance to the other in order to achieve
specific needs with respect to the MDC lease, to include either
compliance with the terms of the lease, amendments to the
lease, or actions to terminate the lease.

In no event will

either party impede the action of the other with respect to the
MDC lease.

The United States will be responsible for damages

resulting from a breach or early termination of the MDC lease
resulting solely from United States initiatives.

The

Corporation will be responsible for damages resulting from a
breach or early termination resulting solely from Corporation
initiatives.

Both the United States and the Corporation will

hold the other harmless from all claims arising by reason of
any such breach or termination.
ARl'ICLE 7.

COVENANT OF SUFFICIENT INTERESTS: REMOVAL OF
ENCUMBRANCES: AND INDEMNIFICATION BY LESSORS

Subject to fulfillment of the provisions of said "Land
Acquisition and Deferred Payment Agreement", the Lessors hereby

6

 covenant with the United States that they have the right to
make this Lease Agreement for the aforesaid term.

If the

United States shall perform all of the covenants and provisions
of this Lease Agreement to be performed by the United States,
the United States shall, during the term hereof, freely,
peacefully, and quietly occupy and enjoy the full possession of
the Premises without molestation or hindrance, lawful or
unlawful, of any person whomsoever with the exception of said
MDC; and that if, at any time during the term hereby granted,
the title of the Lessors shall fail or be discovered not to
enable the Lessors to grant the term hereby demised, the
Lessors shall take whatever actions are necessary to
expeditiously restore possession of the affected portions of
the Premises to the United States.

The Lessors shall indemnify

and save and hold harmless the United States, its officers,
agents and employees for and from any and all liability or
claims for loss or damage which may arise from the failure of
the Lessors title to the Premises or its ability to grant the
term hereby demised.
ARTICLE 8.

LI~BILITY

OF UNITED STATES

The United States shall hold the Lessors harmless from any
and all claims for damage or injury caused by or resulting from
any act or omission of the United States in connection with the
United States' use of the Premises to the extent permitted
under the Federal Tort Claims Act (62 STAT 869-982,
28

u.s.c.

ARTICLE 9.
a.

2671-2680).
IMPROVEMENTS;

Improvements.

RESTO~TION

The United States shall during the term

of this Lease Agreement have the right, at its own expense, to
construct, place, erect, or install such buildings, structures,
equipment and facilities as may be necessary for the United
States' use of the Premises pursuant to this Lease Agreement;

7

 provided that at the expiration of this Lease Agreement, or its
prior termination in whole or in part, the United States shall
have the option of either removing such buildings, structures,
equipment and facilities as it may elect, or abandoning the
same in place.

At least ninety (90) days prior to the

expiration or earlier termination of this Lease Agreement, the
United States shall give notice to the Lessors of those
buildings and structures or other improvements the United
States intends to remove from the Premises.

Upon the

expiration or earlier termination of this Lease Agreement, all
buildings and structures or other improvements not included in
said listing shall be deemed to have been abandoned by the
United States and shall become the property of the appropriate
lessor.

Unless otherwise agreed to in writing by the parties

hereto, the buildings and structures or other improvements
included in said listing shall be removed by the United States
within six (6) months of the expiration or earlier termination
of this Lease Agreement.
b. Restoration.

It is understood that the activities of

the United States in connection with carrying out its defense
responsibilities may result in damage to the Premises.

In that

event, upon the expiration or earlier termination of this Lease
Agreement in whole or in part, the parties shall consult in
good faith to determine and agree upon the extent of the
damage, taking into account conditions at the time, including
potential uses of the Premises.

With respect to the islands of

Saipan and Tinian, the United States will correct the damage,
including removal of unexploded ordnance and exploded ordnance
fragments introduced or uncovered by the United States during
the term of this Lease Agreement.

With respect to the island

of Farallon de Medinilla, upon identification by the Lessors of
a project for use of a specific area and notification to the

8

 United States of such intended use, the United States shall, to
the extent practicable, remove all unexploded ordnance and
exploded ordnance fragments from that area.
ARI'ICLE 10.
a.

LEASEMCKS: SUBLEASES AND ASSIGNMENTS:
REASSIGNMENTS: AND DISPOSALS

Required Leasebacks.

In accordance with Sections

803(d) and (e) of said Covenant and Part !.5. of said Technical
Agreement, the United States shall, by separate agreements,
lease back to the appropriate lessor certain portions of the
Premises located on Saipan and Tinian Islands.

Until such time

as said required leaseback agreements are consummated, all
leases, licenses or permits issued by the Lessors authorizing
use of any portion of the Premises covered by the required
leaseback agreements may continue in force and effect.

At such

time as said required leaseback agreements are effective, new
agreements permitting continued use may be issued to the using
party by the appropriate lessor recognizing the restrictions
imposed by the leaseback agreement.
b.

Other Leasebacks.

Pursuant to Part !.S.c. of said

Technical Agreement, the United States shall lease back to the
Corporation, in accordance with the provisions of Part
r.S.A.(l) and (4) of said Technical Agreement, the area shown
in Exhibit E, attached hereto and made a part hereof, excluding
the areas referred to in paragraph a. of this Article.

Until

such time as the leaseback agreement is consummated, all
leases, licenses or permits issued by the Lessors authorizing
use of any portion of the Premises covered by this leaseback
may continue in force and effect.

At such time as the

leaseback agreement becomes effective, new agreements
permitting continued use may be issued to the using party by
the Corporation recognizing the restrictions imposed by the
leaseback agreement.

9

 c.

Additional Leasebacks.

The United States may from time

to time lease back to the appropriate lessor, in accordance
with applicable laws and regulations, additional portions of
the Premises which are temporarily in excess of the needs of
the United States.

All requests made for use of the Premises

which are unrelated to the needs or the discharge of the
responsibilities of the United States shall be processed in
accordance with the leaseback procedures of this paragraph.
d.

Subleases and Assignments by United States.

The United

States may sublease the Premises or any portion thereof as
required for the needs or the discharge of the responsibilities
of the United States.

The United States may also assign the

Premises or any portion thereof as required for the needs or
the discharge of the responsibilities of the United States,
with the prior written consent of the appropriate lessor.
e.

Reassignments.

It is understood that the United States

agency having control over the Premises is the Department of
Defense.

The United States may, however, consistent with the

purpose of this Lease Agreement, reassign use of all or
portions of the Premises to other United States Federal
agencies in accordance with applicable United States law.
f.

Disposals.

Should any portion of the Premises not be

required for the needs or the discharge of the responsibilities
of the United States, or otherwise become surplus property
under United States law, the Lessors will be given the first
opportunity to acquire the interest of the United States in
such property in accordance with United States law.
ARTICLE 11.

JOINT USE

Should the United States exercise joint control of San Jose
Harbor pursuant to Part II.l. of said Technical Agreement
requiring the Commonwealth to upgrade wharf space or reimburse
the United States for having such service performed, the United

10

 States will offset the value of any improvements to San Jose
Harbor made by the Commonwealth subsequent to the signing of
said Covenant.
ARTICLE 12.
a.

NON-UNITED STATES ACCESS TO PREMISES

Authorized Access.

It is hereby agreed that execution

of the joint use agreements and implementation of the other
arrangements contemplated by said Technical Agreement shall be
held in abeyance until such time as a need therefor is
established.

In the interim and consistent with the provisions

of said Technical Agreement, the Lessors shall have
unrestricted use of the West Field area and San Jose Harbor on
Tinian Island for civilian aviation and port related
activities, respectively: provided, however, that any expansion
of existing facilities or construction of additional facilities
shall be subject to prior written approval of the United
States.

In addition to the access rights provided for

hereinabove and Articles 6 and 10 of this Lease Agreement, the
general public shall have access to the remaining portions of
the Premises on Saipan and Tinian Islands consistent with the
laws of the Commonwealth of the Northern Mariana Islands for
recreational, hunting, and fishing purposes until such time as
said remaining portions of the Premises are required for the
needs or the discharge of the responsibilities of the United
States.
b.

Restriction of Public Access.

Notwithstanding the

provisions of paragraph a. of this Article, during times of
military maneuvers, operations, or related activity, the
granted right of public access may be restricted by the United
States.

Closure for such purposes, however, will be kept to a

minimum consistent with military requirements and in the
interest of safety and security.

Additionally, all shoreline

areas in and around the portions of the Premises located on or

11

 immediately adjacent to Tinian Island, shall remain open to
fishermen at all possible times except for those limited areas
that must be closed to comply with United States safety and
security requirements.

The United States shall provide

adequate public notice of seven (7) days prior to restricting
public access, except in times of emergency.
c.

Farallon de Medinilla.

Public access to Farallon de

Medinilla Island and the waters of the Commonwealth immediately
adjacent thereto shall be permanently restricted for safety
reasons.
ARTICLE 13.

OFFICIALS NOT TO BENEFIT

No member of or Delegate to Congress, or elected or
appointed official of the Commonwealth, or Resident Commissioner
shall be admitted to any share or part of this Lease Agreement,
or to any benefit that may arise therefrom; but this provision
shall not be construed to extend to this Lease Agreement if
made with a corporation for its general benefit.
ARTICLE 14.

GRATUITIES

The United States may, by written notice to the Lessors,
terminate the rights of the Lessors under this Lease Agreement
if it is found, after notice and hearing by the Secretary of
the Navy or his duly authorized representative, that gratuities
(in the form of entertainment, gifts, or otherwise) were
offered or given by the Lessors, or any agent or representative
of the Lessors, to any officer or employee of the United States
with a view toward securing a lease or securing favorable
treatment with respect to the awarding or amendment, or the
making of any determination with respect to the performing of
such lease; provided, that the existence of the facts upon
which the Secretary or his duly authorized representative makes
such findings shall be in issue and may be reviewed in any

12

 competent court.

In the event this Lease Agreement is so

terminated, the United States shall be entitled (1) to pursue
the same remedies against the Lessors as it could pursue in the
event of a breach of the contract by the Lessors, and (2) as a
penalty in addition to any other damages to which it may be
entitled by law, to exemplary damages in an amount (as
determined by the Secretary or his duly authorized
representative) which shall be not less than three nor more
than ten times the cost incurred by the Lessors in providing
such gratuities to any such officer or employee.

The rights

and remedies of the United States provided in this clause shall
not be exclusive and are in addition to any other rights and
remedies provided by law or under this Lease Agreement.
ARI'ICLE 15.

COVENANT AGAINST CONTINGENT FEES

The Lessors warrant that no person or selling agency has
been employed or retained to solicit or secure this Lease
Agreement upon an agreement or understanding for a commission,
percentage, brokerage, or contingent fee, excepting bona fide
employees or bona fide established commercial or selling
agencies maintained by the Lessors for the purpose of securing
business.

For breach or violation of this warranty the United

States shall have the right to annul this Lease Agreement
without liability or, in its discretion, to deduct from the
rental price or consideration or otherwise recover the full
amount of such commission, percentage, brokerage, or contingent
fee.

(Licensed real estate agents or brokers having listings

on property for rent, in accordance with general business
practice, and who have not obtained such licenses for the sole
purpose of effecting this Lease Agreement may be considered as
bona fide employees or agencies within the exception contained
in this Article.)

13

 ARTICLE 16.

SUCCESSORS AND ASSIGNS

The terms "Corporation", "Authority", "Commonwealth", and "United
States" wherever used herein shall be held to mean and include,
respectively, the Corporation, the Authority, the Commonwealth, and
the United States, their successors and assigns.

This instrument

shall be binding upon and inure to the benefit of the parties
hereto and their said respective successors and assigns.
ARTICLE 17.

NOTICES

No notice, order, direction, determination, requirement,
consent, or approval under this Lease Agreement shall be of
any effect unless in writing.

All notices required under this

Lease Agreement shall be addressed to the Corporation or to
the United States, as may be appropriate, at the following
addresses or at such other addresses as may from time to time
be agreed upon by the parties hereto:
FOR THE LESSORS:

DUPLICATE COPY TO:

Chairman, Board of Directors
Marianas Public Land Corporation
P. 0. Box 380
Saipan, CM 96950

Governor
Commonwealth of the Northern
Mariana Islands
Saipan, CM 96950

FOR THE UNITED STATES:

DUPLICATE COPY TO:

Commander, Pacific Division
Naval Facilities Engineering
Command (Code 24)
Pearl Harbor, Hawaii 96860

Commander, U. S. Naval Forces
Marianas (Code N4)
Box 6A
FPO San Francisco 96630

ARTICLE 18.

DISPUTES

The parties will use their best efforts to resolve
between themselves any question or dispute relating to the
interpretation or operation of this Lease Agreement and the
Land Acquisition and Deferred Payment Agreement.
ARTICLE 19.
a.

ADMINISTRATION

The Lessors' representative specified in Article 17

hereof shall have complete charge of the administration of
this Lease Agreement, and shall exercise full supervision and
general direction insofar as the interests of the Lessors are
affected.
14

 b.

The United States' representative specified in

Article 17 hereof shall, under the direction of the Commander,
Naval Facilities Engineering Command, have complete charge of
the administration of this Lease .A greement, and shall exercise
full supervision and general direction thereof insofar as the
interests of the United States are affected.
IN WITNESS WHEREOF, the parties hereto have caused this
Lease Agreement to be executed as of the date first above
written.

FOR THE COMMONWEA.LTH OF THE NORI'HERN MA.RIANA
ISLANDS

FOR THE MA.RIANAS PUBLIC LAND CORPO R1

By:

FOR THE COMMONWEALTH PORTS AUTHORITY

By:
of Di rectors
APPROVED

AS TO FORM:

15

~tl-llnse!=?f?-../~
Comronnwealth Ports Authority

 TATES OF AMERICl\.

By:

Secretary of the
Territorial and
ional Affairs

y of
Defense, Inter
ional
Security l\.ffairs

Commander, u. s. Naval
Forces Marianas

•

16

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Exhibit

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 EXHIBIT D

All that certain tract or parcel of real property located on
the island of Tinian, Commonwealth of the Northern Mariana
Islands, more particularly bounded and described as follows:
Beginning at a point, designated as Corner 1,
which is North 101,101.06 meters by East
126,861.5 7 meters on the- Mariana·· Is lands Plane
Coordinate System~
Thence S 69° 26' 06" E, a distance of 1,523.82
feet to Corner 2~
Thence S 82° 58' 41" E, a distance of 3,415.41
feet to Corner 3~
Thence N 79° 07' 03" E·, a distance of 3,700.00
feet to Corner 4~
Thence S 76° 22' 57" E, a distance of 1,680.13
feet to Corner 5;
Thence N 05° 12' 00" E, a distance of 4,107.49
feet to Corner 6~
Thence S 79° 07' 03" W, a distance of 10,916.72
feet to Corner 7~
Thence S 10° 52' 57" E, a distanc~ of 1,405.00
feet to the place of beginning~
containing an area of 30,971,295.00 square feet (2,877,327.40
square meters), more or less.