Congressman Michael San Nicolas is warning GovGuam not to make the same mistake at Fadian it did at Ukudu. Such a mistake, the congressman surmises, could cost exponentially more than the $220 million on the line in a lawsuit GovGuam may lose to Core Tech International over land claims at Ukudu, Dededo.

At issue are similar stories of GovGuam using Naval land through lease for very expensive public infrastructure, and then GovGuam losing its interest in the land. At Ukudu, GovGuam built the Northern District Wastewater Treatment Plant on Lot 10184-7 under the authority of a general purpose lease in May 1980. That property interest was extinguished years later. GovGuam failed to properly dispose of the land. And for reasons discussed below, GovGuam now is on the hook to pay the private landowner of the property about $220 million in back rent and other damages.

Lot 10184-7 encompasses less than 10 acres of land.

Gov. Lou Leon Guerrero is set to repeat history, but this time with ten times the land area. According to documents and public statements by the governor, she is moving ahead with an attempt to lease from the Navy 102 acres of land it condemned from 18 private property owners in 1950. The lease will allow GovGuam to build and operate the governor’s envisioned billion-dollar medical campus.

General Purpose Lease was mistake

This mechanism is the same legal privilege GovGuam used in 1980 to build the NDWWTP.

“Decades ago GovGuam leased military land to build a water treatment plant up north,” Mr. San Nicolas warned in a statement. “Today GovGuam is being sued $220 million for the use of that plant by the now-property owner who purchased the land from someone who purchased it from an original landowner (sold to the second degree).”

“That $220 million lawsuit is for a 10-acre property,” the congressman continued. “GWA is already saying that this lawsuit if successful would force water rates to increase three times for all.”

The lawsuit stems from GovGuam and Guam Waterworks Authority’s 2018 complaint to the Superior Court of Guam against CTI. The complaint, which was filed unprovoked, was to change a 2010 certificate of title that indicated CTI owned the land, where GWA operates the NDWWTP.

Shortly after the lawsuit, GWA bulldozed CTI’s fenceline bordering the NDWWTP property, and CTI’s concrete batch plant land, then encroached several meters north into the batch plant property with a new fence. CTI responded by counterclaiming against GWA and GovGuam, and demanding about $220 million in inverse condemnation.

Rights extinguished

Among CTI’s counterclaims are that GWA has no right to occupy its property, Lot 10184-7. Among the legal reasons for such a position, is that the General Purpose Lease that gave GWA the right to occupy the land and operate the plant – the same type of lease Gov. Leon Guerrero wants to use to occupy Fadian and operate a new hospital – was extinguished, when the Navy returned the land to GovGuam.

“Amazingly, with this very lawsuit on its lap originating from a military lease to build civilian infrastructure, GovGuam is plowing headlong into the exact same type of transaction, this time for a +100 acre lease and a hospital facility exponentially more expensive than a water treatment plant,” Mr. San Nicolas said.

CTI’s legal reasoning was sustained by Judge Elyze Iriarte sustained CTI’s legal reasoning in a November 30, 2021 decision and order in the case. She ruled against GWA’s claim that it had a superior ownership interest to the land.

“[O]n May 23, 1980, the United States granted a license to Gov. Guam to use the property ‘for the construction, installation, maintenance, operation, repair and replacement of Wastewater Treatment Plant and sewer lines….” Ms. Iriarte wrote. “Gov. Guam later conveyed its interest in the license to GWA. As previously stated, the United States executed a Quitclaim Deed on July 26, 2002, which conveyed its right, title, and interest in the subject property to Gov. Guam. Upon that conveyance, the license that the United States granted GWA was extinguished. Accordingly, the Court does not find that the May 23, 1980 General Purpose Lease establishes that GWA has superior title to Core Tech.”

Issue of material fact remains

But the judge didn’t stop there. “Since [GWA has] not established that they have a right to use and occupy the Northern District Wastewater Treatment Plant on Lot 10184-7,” Ms. Iriarte wrote, “the Court finds that an issue of material fact remains as to whether a taking has occurred.”

These court findings and the facts of this case have led Mr. San Nicolas to question the reasoning driving Ms. Leon Guerrero’s push to lease Naval land at Fadian for an even more expensive construction project.

“Original landowners are already demanding the lands’ return,” the congressman wrote. “The willful blindness and hubris driving this hospital land lease in the face of clear and present danger is astonishing and difficult to comprehend,” the congressman continued. “Why go down the same road that led to a cliff when there are alternatives to doing what needs to be done?”