Report / Guam
Guam’s population will increase by almost half in 2014 when the US military relocates to this tropical paradise from Japan’s Okinawa. It’s a milestone in the island’s history and a development boom is under way.
Wearing a blue tropical shirt, Zig Resiak draws deeply on a cigar while gazing at coconut palms hung with fairy lights around a turquoise swimming pool.
“Why am I moving out here with my family? This island is about to get a whole lot busier. There are some big changes in store. That’s why.”
Resiak, a senior associate at RW Armstrong, the American global construction consultancy, is one of many businessmen swapping grey suits for tans and flip-flops as they capitalise on the unique explosion of opportunities in far-flung Guam.
A volcanic speck in Micronesia, postcard-perfect Guam is 2,400 miles south of Japan and 5,600 miles west of Hawaii. But this is no quiet backwater. A mountain of immigration paperwork upon arrival and the super-sized food portions served in restaurants are reminders of Guam’s status as an American territory. A former Spanish colony, the island has been in American hands almost constantly since 1898. Today, US federal laws apply but Guam has its own established civilian government.
Dubbed the place where America’s day begins – it’s the westernmost territory – its shores and close proximity to Japan have ensured a healthy package tourism industry since the 1960s.
It has also been a US military base since the Second World War – there are currently around 6,200 US military personnel on the island. Now, Guam is on the brink of its most historic transformation: in 2014, a further 8,600 marines, 600 US military personnel and close to 10,000 dependents will be relocated to Guam from their bases in southern Japan’s Okinawa. Guam’s strategic importance is evident: the island’s location between Hawaii and the Philippines make it a dream American military gateway to Asia and the western Pacific.
Add to the mix recent tension with Japan over America’s controversial military presence on Okinawa, and the attractions of relocating thousands of its troops to an island governed by its own federal laws are obvious.
With the planned arrival of so many new inhabitants, the island is one of the rare places in the world right now where there is a construction boom. This year an estimated $16bn (€11.8bn) will be spent on upgrading the infrastructure of this 51km-long island.
Referred to ominously by islanders as “The Build Up”, the relocation will boost Guam’s 174,000-strong population by nearly 80,000 at its peak (in addition to the new military arrivals there will be waves of construction workers who will come and go).
“There is not an area physically or socially that will not be impacted by this,” says local Paul Shintaku, executive director of the Guam Buildup Office based at the colonial-style seafront government buildings in the capital Hagatña.
Gesturing to walls festooned in military maps and government reports, he adds: “2014 is D-Day and there’s a lot to do – housing, widening roads, port upgrades, airport extensions, recreational facilities, five new schools.” Most of the military facilities will be concentrated in one northern part of the island. But even the sleepy, wild beaches elsewhere will feel the difference.
An early pioneer is the Hawaii-based Watts Constructors, which opened Guam offices in 2004 – two years before the relocation was officially announced. Since then, the company has scooped a range of projects, from a soon-to-be completed military housing complex to a sharply lined white latticed Louis Vuitton store, which opened two years ago in Tumon – a tourist enclave on the island’s west coast.
“We heard what was coming before it was announced and set up an office as fast as possible,” says CEO Denny Watts, speaking on the phone from Hawaii. “Billions of dollars of construction need to take place on the island and this is a catalyst for businesses to flourish.”
And local businesses are also tapping into the pending boom. The three-tower residential development Emerald Oceanview Park and a new 18,000-bed military housing project are currently being built by Younex International, which has operated on Guam for 25 years.
Bounding up the stairs of one of the half-built towers to point out the uninterrupted sea views, Guam local and Younex senior vice president David Tydingco says, “We made significant land purchases several years ago. People thought we were crazy at the time and it was a risky move but we knew it would pay off.”
On the island’s less developed east coast, a haven of remote villages and wild seas, The Laguna project on Pago Bay is also selling 98 land lots from $250,000 (€185,000) to $750,000 (€550,000) on which owners can build eco-homes on this tiered ocean-facing development.
“Nowhere else in the world has the same guaranteed population growth as Guam, which makes it a very exciting place for real estate investment,” says Wendy Hortiz, principal broker, pointing out all the little red stickers on a map showing 47 sold lots.
Taking Monocle on a tour of the site, Stacie Gensic, the company’s 24-year-old administrator from Indianapolis, says, “I moved here last summer because my husband is in the military. I bawled my eyes out when I heard he was being sent here. No one in the military really wants to come to Guam. But I’m enjoying it now. I have a job, I scuba dive and the sun shines every day.”
The atmosphere in the boardroom of the Guam Chamber of Commerce is one of restrained anticipation as David Leddy, the president, forecasts a surge in overseas businesses providing off-duty services to follow the construction boom. “It is quite easy setting up a business in Guam,” he says. “Many businesses are already positioning themselves. We’ve recently had queries from China, Japan and Turkey as well as overseas Guam citizens thinking about coming home.”
Sun, sea, sand and soldiers is perhaps a less appealing formula for tourism: currently the nation’s number one job provider (followed closely by the military) tourism accounts for $1.2bn (€885m) of the island’s $3bn (€2.2bn) GDP, according to the Guam Visitors Bureau.
In the airy confines of the nearby Sheraton Hotel, Japanese businessman Hayato Yoshino – known locally by his adopted Guam name “Jack” – sees the expected influx as a potential bonus for the tourism industry. He is president of PHR Ken Asset Management, a Guam subsidiary of Japan’s Ken Corporation, which has acquired the island’s top hotels including Hyatt, Hilton and Sheraton over the past five years.
“Competition is fierce from other beach destinations so we must target a higher-end market and diversify to attract people from different places. And ultimately, we must make sure that the military and tourism can co-exist in harmony,” he says.
Works are already racing ahead at the island’s AB Won Pat International Airport. Here, $150m (€110m) worth of capital improvement projects have been launched since the build-up announcement, including the creation of gleaming new cargo facilities, a parallel taxi runway, a water distribution system and an on-going runway extension project.
As he takes Monocle on a drive across runways to highlight construction, Carlos Salas, the airport authority’s executive manager, says, “The airport is elevating its efforts to sustain Guam’s position as a hub for the region. “With our runway extension, we are aiming to achieve our goal of long-haul trans-Pacific flights. We are also targeting China and Russia and hoping for flights from Tokyo’s Haneda from October.”
On an early morning visit to the island’s port, located on a western peninsula, there are further signs of construction, with work beginning days earlier on a new $4.8m (€3.5m) sea wall. Port officials have earmarked the site for further major development and are seeking $100m (€73m) of federal funding to expand the port to double its 25-acre site.
“Around 95 per cent of all imports come via the port,” says Monte Mesa, chairman of the Port Authority of Guam, which also plans to set up a cruise terminal. For the local community, however, one of the biggest concerns is not commercial but social: there are fears that the indigenous Chamorro community will be diluted by the new arrivals and its culture put under threat.
One Guam local determined to defend his culture is TV chef Peter Duenas, who last year opened Meskla, a popular bistro-style restaurant serving “Chamorro fusion” cuisine using local ingredients – from coconut Thermidor to fried eggplant Caesar salad.
“The beauty of serving food that focuses on our Chamorro heritage is that it unites everyone on the island – tourists, the military and the locals,” says Duenas. “And in the light of everything going on, that’s now more important than ever for Guam.”
Seven airlines fly into Guam, including Delta, JAL and Continental Micronesia (see page 151). Jin Air, the low-cost Korean airline, is also due to start flights from Seoul in April. Once in Guam, car hire is essential but even though it’s easy to get around, traffic congestion is common during rush hour.
Five key facts
Guam is the largest island in Micronesia.
Indigenous Chamorro account for 37 per cent of the population.
85 per cent of the population is Catholic.
Eighty per cent of tourists visiting Guam are Japanese.
The build up is forecast to increase Guam’s GDP by as much as $1bn (€737m).
Five MONOCLE fixes
Expand visa waiver
US federal government should adopt tourist chiefs’ proposals of visa waiver for countries such as China and Russia to bolster high-end tourism.
American steakhouse chains and pizza restaurants dominate the food scene: more local cuisine Meskla-style would be welcome.
Get rid of litter on beaches and streets, particularly in tourist enclave Tumon.
The build-up will worsen congestion on the roads, which are currently earmarked for upgrading as opposed to creating new routes.
Replace the old massage parlours and strip bars of Tumon with cafés and independent small businesses and boutiques.
Who’s in charge?
A former Spanish colony, the tropical island has been in American hands almost constantly since 1898, apart from two-and-a-half turbulent years of Japanese wartime occupation. Today, Guam is defined as an “organised, unincorporated territory of the US”. Roughly translated this means that US federal laws apply but the island has its own established civilian government: it is able to elect a governor, a 15-member legislature and one non-voting delegate to the US House of Representatives.