Disadvantageous to Mandaue government?: Lot leased out at P0.75 per sqm

CEBU, Philippines — Is Mandaue City’s decision to lease a 31,769 square-meter developed offshore property at 75 centavos per square meter disadvantageous to the city?

This is the question raised by a resident of the city who questioned the amount of the lease.

“I am interested to hear how Mayor Quisumbing will explain his act of signing a 25-year lease contract with San Miguel Corporation for a city-owned lot at seventy-five centavos per square meter,” reads the resident’s letter to The Freeman.

The resident did not want to be identified.

Documents obtained by The Freeman show that the property along the Mactan Channel was leased out to San Miguel Foods, Inc.

The foreshore lease agreement was signed by Mayor Luigi Quisumbing and San Miguel Foods, Inc. and was notarized on September 19, 2017.

“…the lessee (San Miguel Foods Inc.) shall pay the lessor (Mandaue City Government) rentals per annum payable to the City Treasurer of Mandaue in the amount of P285,921, computed at P0.75 centavos per square meter of the total leased area per month,” part of the four-page agreement reads.

On September 20, the day after the deal was notarized, Quisumbing, through a letter, asked Mandaue City Council to ratify the 25-year lease with an annual rental of over P285,000.

The council ratified the agreement during its session that day and gave Quisumbing the authority to sign the agreement.

During the signing on August 9, 2017, San Miguel Foods, Inc. was represented by its president, Rita Imelda Palabyab, and vice-chairman, Francisco Alejo III.

Under the agreement, the city government grants leasehold rights to San Miguel Foods Inc. in using the area to construct buildings or any improvement.

The private firm is also allowed to enter into a joint-venture agreement in developing the area.

“…provided, however, that in no manner shall the lessee alienate the area, or its right thereto, by sale, mortgage, sublease or any other mode of conveyance or cession, except to sublease the same in favor of the parent company, or any subsidiary or affiliate of the lessee, or any other company under the San Miguel Group,” the agreement reads.

The Mandaue resident said the query has nothing to do with politics.

“As much I want to disclose my name to render integrity to my claim, I do not want to be in the middle of this fierce and often unsavoury tug-of-war between political giants of Mandaue. I only seek the truth to come out, and perhaps in the process be made to understand through various discussions, and hopefully in the end be enlightened on whether this transaction between Mayor Quisumbing and San Miguel Corporation is not disadvantageous to the city,” the letter reads.

In the same letter, however, the sender said that Quisumbing is “projecting himself to be clean” when his administration questioned a decision of the city during the term of former Mayor Jonas Cortes to lease its property to Katumanan Hardware, Inc. at P12 per square meter.

The mayor’s chief of staff, Atty. Elaine Bathan, has said the worth of the area leased out should have been based on prevailing fair market value.

“Under the lease contract, it only said P12 per square meter… P12 is not the prevailing fair market value of that area given the developments. (Supposedly, it can) go as high as P1,500 to P2,000 per square meter at least in that area,” Bathan said earlier.

Bathan has said the city government is losing much from the previous contract or transaction.

In a statement sent to The Freeman last night, Bathan said the contract with Katumanan is entirely different from the city’s contract with San Miguel.

“Yes, Mandaue entered into a Foreshore Lease agreement with San Miguel Corporation that was witnessed by no less than Mr. Ramon S. Ang together with the entire city council. It is to develop and reclaim the land to build the biggest plant of San Miguel Foods outside Manila. Unlike the contract of lease with Katumanan, this foreshore lease involves a submerged land. Both are entirely different from each other. Whoever this person is, by hiding under an anonymous letter clearly shows an attempt to insinuate something malicious against a highly respected company and a top taxpayer of the city. He or they are doing a disservice to Mandaue. Maliciously dragging other people and parties to create a smokescreen to deflect and cover up their wrongdoings will only compound to their problem,” she said. (FREEMAN)