The American Samoa Department of Commerce has released a new policy to encourage economic development activity at the Tafuna Industrial Park (TIP).
Effective October 1st, subleasing by tenants of the Industrial Park to other parties (subject to Lessor review and approval) will be allowed.
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.
DOC states in a press release that 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 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.
To assist prospective tenants, a two (2) year moratorium on the monthly rental payment is granted to give the new tenant sufficient time to set up 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 Tafuna Industrial Park for economic development opportunities.
These policies will remain in effect until amended depending on the economic conditions prevailing at the time which necessitate such a review and reconsideration.
Existing policies relating to the administration of the Industrial Park will remain.
DOC provides this background: The 325 acres of land set aside for the Tafuna Industrial Park 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.
