Osmeña eyes rebidding of 45.5-ha SRP lot sale

CEBU, Philippines — Saying the sale of the 45-hectare lot at the South Road Property (SRP) was illegal, outgoing Cebu City Mayor Tomas Osmeña plans to push before the City Council the rebidding of the property.

Osmeña revealed this during his farewell speech during the flag raising ceremony yesterday at City Hall grounds.

“So, we will simply ask for a rebid so that instead of getting P15 billion, we can get as much as P50 billion. That belongs to you. That belongs to the future generation of Cebu,” he said.

Osmeña has been vocal against the sale of the 45.5-hectare lot in 2015 by the administration of then mayor Michael Rama. During that time, the consortium of Ayala Land, Cebu Holdings Inc. and SM Prime Holdings bought 26.3-hectare property at P10.009 billion, while Filinvest Land Inc. bought 19.2-hectare property at P6.7 billion. The whole 45.5-hectare lot was sold at P16.7 billion.

Osmeña said the “real valuation” of SRP lots as offered by Federal Land, in an unsolicited proposal to buy a three-hectare lot, is at P115,000 per square meter. If the city will rebid the property, it can get as much as P50 billion.

Osmeña’s allies at the council had been pushing for the nullification of the 45.5-hectare lot sale. They are also preventing the use of the money paid by the giant developers. The developers made 50-percent down payment in August 2015 amounting to P8.35 billion.

In 2016, the city got P3 billion which was the first installment from the developers but Osmeña ordered not to utilize the money since he planned to rescind the contract. Some P4 billion of the total P11 billion received by the city government has been used to fund the appropriation in 2016 which means there are only P7 billion left in the city’s coffers.

Osmeña said one major defect in the transaction is the lack of approval from the Commission on Audit. Mayor-elect Edgardo Labella has already said that he would allow the buyers to proceed with the development, saying that there is no legal impediment to prevent them from doing so.

Labella said the Court of Appeals already ruled that the sale was legal and valid.

Meanwhile, Osmeña said the 45.5-hectare lot transaction is far from the P18 billion Kawit Island development by the Universal Hotels and Resorts Inc. Osmeña explained that leasing the property is better than selling it, stressing that the city government will get more if the company increases their sales.

In the approved Joint Venture Agreement between the city and UHRI, the city will receive shares from revenues such as; 10 percent of the gross real estate rental revenues to be generated from the retail lease of spaces in the commercial/shopping center and the parking lots; 10 percent of gross real estate rental revenues from the wholesale lease of the gross bare-shell spaces in the integrated resort; 15 percent of gross real estate rental revenues from the wholesale lease in the casino facility; and 10 percent of the gross real estate rental revenues from the wholesale lease of spaces in hotels if the hotels are leased to a hotel operator but if the giant firm will operate it, the city will get two percent from its gross rental in the hotel’s gross room and food and beverage revenues.

Osmeña said the remittance of the city’s share will start in the ninth year or after the eight-year grace period.

However, the city will get P1 million per month starting the first year of construction period or two to four years prior to the operations in lieu of its revenue share during the eight-year grace period.

“When everything’s all and done, the city still owns the property and it will be worth so much more that those six-seven hectares alone will pay for the college education of all the Cebuanos 50 years from now. Why will we sell it?” Osmeña said.

Once the development on Kawit Island at SRP will be completed, the mayor said the valuation of the properties in the area will immensely increase. But Labella said he is also planning to renegotiate with UHRI on the project. (FREEMAN)