Notes on the beat
MANILA, Philippines — After years of legal battles between state-run Bases Conversion and Development Authority (BCDA) and Camp John Hay Development Corp. (CJHDevCo) led by Robert Sobrepeña, Camp John Hay is entering a new era, with the government regaining control over the property located in the country’s summer capital.
As BCDA prepares to search for a new private sector partner to unlock the full potential of Camp John Hay, Manuel V. Pangilinan-led Landco Pacific Corp. has been tapped for the interim management of the camp’s legacy hotels.
Transitions are nothing new for this tourist destination known for its pine trees, scenic trails and breathtaking views, as its history has been marked by changes over the years.
Named after US president Theodore Roosevelt’s Secretary of State John Milton Hay, Camp John Hay was established in 1903 and initially served as a vacation and recreation area for American servicemen.
During World War II, Camp John Hay was occupied by the Japanese army and used as a military base.
After the war, it was converted into John Hay Air Base in 1955 and remained under the US until its turnover to the Philippine government in 1991.
With the enactment of Republic Act 7227 or the Bases Conversion and Development Act, Camp John Hay and other military facilities were placed under the stewardship of the BCDA, which is mandated to transform former US bases into productive use.
In 1994, the John Hay Special Economic Zone (JHSEZ) was established from a portion of land occupied by the former Camp John Hay reservation.
In 1996, the BCDA entered into a 25-year lease agreement with CJHDevCo, Fil-Estate Management Inc. and Penta Capital Investment Corp. for a 247-hectare portion of Camp John Hay.
Under the lease agreement, which was renewable for another 25 years, CJHDevCo was responsible for the development of the leased property. It was also authorized to lease the property to third parties.
At the end of the lease, CJHDevCo will have to turn over the ownership of the improvements to the BCDA.
The plan to turn Camp John Hay into a premier eco-tourism destination initially showed promise, with CJHDevCo investing in the development of hotels, luxury residences and a golf course in the area.
However, things took a turn as disputes emerged over the parties’ respective obligations under the lease agreement.
In 2012, BCDA terminated the lease, citing CJHDevCo’s failure to pay rental obligations.
CJHDevCo, however, claimed that BCDA’s failure to perform its obligation of setting up a fully functioning One-Stop Action Center to expedite the issuance of permits and licenses from government agencies, caused delays in its project implementation and affected its operations. It filed a complaint against the BCDA before the Philippine Dispute Resolution Center Inc. (PDRCI).
In 2015, the lease agreement was rescinded as the PDRCI found a mutual breach of parties’ obligations.
PDRCI ordered CJHDevCo to return the property and all improvements to BCDA, while the BCDA was directed to refund CJHDevCo rent that was paid amounting to P1.42 billion.
CJHDevCo filed a motion for the court to enforce the notice to vacate against them and not their sub-lessees. The sub-lessees also filed a petition, arguing that their inclusion in the notice to vacate was unfounded and violative of due process.
As the Court of Appeals nullified the notice to vacate, the BCDA filed a petition for review.
In April last year, the Supreme Court (SC) upheld the ruling ordering CJHDevCo to vacate the property it leased from the BCDA.
In a resolution in October last year, the SC denied with finality the motions for reconsideration filed by CJHDevCo and its third party respondents, clearing the way for BCDA to recover the 247-hectare property.
Last Jan. 6, the Baguio City Sheriff formally served the notice to vacate to CJHDevCo, marking the formal takeover.
This development led to the turnover of The Manor and Forest Lodge at Camp John Hay, including the CAP-John Hay Trade and Cultural Center to Landco, which will serve as interim operator for one year, extendable to two years.
As part of the selection process for the interim operations and management of the legacy hotels and CAP-John Hay Trade and Cultural Center, the BCDA spoke with several reputable hotel operators.
“Based on our market sounding, Landco has the most favorable terms for the government, with a revenue sharing scheme,” BCDA president and CEO Joshua Bingcang said.
This is not the first time that the BCDA is working with the MVP Group, having a long-standing relationship with Metro Pacific Tollways Corp., which serves as the concession partner for the operations and maintenance of the Subic-Clark-Tarlac Expressway.
“We are happy to assist the BCDA in this interim transition. Camp John Hay must realize its potential as a special economic zone. This is a significant first step,” Pangilinan said.
A new consortium consisting of Golfplus Management Inc., the team behind the driving ranges in premium estates Nuvali and Alviera, and DuckWorld PH, a sports management agency, has been formed to handle the operations and maintenance of the Camp John Hay golf course during an interim period.
The BCDA has also signed a deal with Stern Real Estate and Development Corp., the operator of Le Monet Hotel and the Filling Station, to continue operations.
In addition, agreements were signed with pizza chain Amare La Cucina and specialty cafe and restaurant Top Taste and Trading Inc. for the commercial lease of properties.
To unleash the full potential of Camp John Hay as a premier ecotourism destination, the BCDA is conducting a review of the comprehensive master plan of the JHSEZ.
Bingcang said the aim is to replicate the success in Bonifacio Global City and Clark by making Camp John Hay a new investment hub in Northern Luzon.
While the BCDA intends to develop around 70 hectares of untapped land inside the former US military base through a joint venture scheme with the private sector, as well as redevelop the Mile Hi Center to enhance retail and restaurant offerings in the ecozone, it also aims to protect forested areas and other open spaces.
To provide the public and tourists a safer and more comfortable experience at Camp John Hay, the BCDA plans to improve roads, jogging trails and pedestrian lanes, as well as install solar street lights.
It also plans to establish a smart transport system that will serve as a model for sustainability and be offered as a public-private partnership.
As the BCDA makes plans for Camp John Hay, it is also reaching out to existing establishments inside the camp to negotiate terms for a fresh contract.
“We understand that this situation may be difficult for those affected, and we want to emphasize that BCDA is here to assist. A notice has been published inviting all affected stakeholders to come forward and engage with us. We encourage those who are impacted to reach out to BCDA directly so we can discuss reasonable requests within the bounds of the law. We are committed to addressing concerns and offering support during this transition,” Bingcang said.
The BCDA considers the government’s recovery of Camp John Hay as a victory for the Filipino people, paving the way for new investments, projects and business opportunities that will create jobs and spur economic growth.
As BCDA ushers in a new era for Camp John Hay, only time will reveal how its plans will unfold.