Sweeping changes in Industrial Park policy meant to foster local business development

Pago Pago, AMERICAN SAMOA — The American Samoa Department of Commerce has released a new policy to encourage economic development activity at the Tafuna Industrial Park (TIP). American Samoa’s economic and business development challenges include several issues, and to a large extent, and according to the agency are beyond their control.

These challenges further limit business development as venture capital and other foreign investments become even more difficult to secure. Such challenges include, but are not limited to — American Samoa’s remote geographical location; limited natural resources; limited available private land for business development; federal policies that don’t account for unique local conditions; high operating costs, and a limited seasoned workforce.

Despite the many challenges noted, there are emerging opportunities to support economic growth and new job creation. “It is imperative to revisit the resources we have from time to time to ensure we are leveraging them accordingly,” the release states.

 One such resource is the Tafuna Industrial Park (TIP). The 325 acres of land set aside for TIP was meant to not only provide the private sector with land to develop their business operations, but to also minimize start-up costs to the extent that ASG could by establishing rental rates and agreements that allow businesses to reinvest savings received from these ASG ‘subsidies’ so the new business can grow and mature.

POLICY AMENDMENTS FOR INDUSTRIAL PARK

The following policy amendments are to guide the leasing of all land within the legal confines of the Senator Daniel K. Inouye Industrial Park (TIP) and will become effective on October 1, 2020. Existing policies relating to the administration of the industrial park will remain.

“Subleasing”

There has been an existing inconsistency on the issue of “sublease” since some of the existing leases allowed “subleasing” and others are not accorded the same privilege. Accordingly, it is now the policy to allow subleasing to other parties (subject to Lessor review and approval).

“Rental Rate”

The rising rental cost has stifled the ability of current tenants to engage in economic development expansion programs or to attract foreign venture capital to grow their respective businesses. Accordingly, the rental rate set for all leases at the Senator Daniel K. Inouye Industrial Park is set at 25 cents per square foot with a five (5) year periodic review for rent escalation based on inflation and other relevant factors.

Existing leases with rental rates below the mandated amount of 25 cents will continue until expiration and then automatically be raised to 25 cents or whatever the prevailing rate is at the lease expiration date and when leases are renewed.

“Two-Year Moratorium on Monthly Rental Payment for New Tenants”

To assist prospective tenants, a two-year moratorium on the monthly rental payment is granted to give the new tenant sufficient time to setup their respective businesses.

Given the global economic impacts of the coronavirus pandemic, there is uncertainty to our local economy, and it is only reasonable to provide affordable access to the TIP for economic development opportunities.

These policies will remain in effect until amended depending on the economic conditions prevailing at the time would necessitate such a review and reconsideration.