Dragons are not real

In one of my out of town trips this week with my youthful corporate boss, whose initial is JFG, we talked about "Cebu, an island in the Pacific". This imaginative description given our island province was coined a little more than a decade ago ostensibly as a marketing strategy.

We came to that discussion in the light of the announcement that Cebu City finally got its titles to the South Reclamation Project. JFG believed that with this "piece of very expensive real property" available for all kinds of development, the city was poised to market itself, all the more, to bullish foreign and domestic investors.

To jump start the sales pitch, the Honorable Cebu City Mayor Tomas R. Osmeña said that by next year, the city would start selling portions of the project for one hundred million pesos per hectare or at a still lower amount of eighty million pesos per hectare. I could not believe what I heard as I assumed that the city would have put in place all needed facilities. JFG's words, from the real estate industry point of view, were more accurate but the city's proposal would not amount anything like SRP being an expensive property. Doubtless, the price quoted was fairly reasonable, if not low, that it would certainly attract a swarm of potential buyers.

With that price, the sales would be expectedly bullish and then the mayor would be able to pay off the huge debt of the city in no time at all. Indeed, we would easily wipe out our very burdensome loan obligation and march on to become an economic dragon in the region. Overnight!

On many issues of the past, I disagreed with the mayor. His posture on the price of the SRP however, is one thing I am in full accord with. It is easy to forecast that the moment the mayor accepts proposals for the acquisition by purchase of certain SRP lots, prudent businessmen will form a long cue, prepared to sink that kind of money in this land. At that price per hectare, it means that per square meter the South Reclamation Project costs ten thousand pesos. Wow, if my information is correct, that is about one third the per square meter price of a prime area of the Ayala Business Center and the Mandaue Reclamation Area. .

Our mayor keeps an ace in his marketing sleeve when he tells us that the SRP will sell at P 10,000 per square meter. Why he has not used the same sales pitch to make many owners of idle parts of the North Reclamation area unload their landholdings escapes me. To recall, the North Reclamation area was completed 40 years ago. Yet, it is not fully occupied. Most of these undeveloped patches of land have squatters. Had he initiated the idea of keeping the price of lots in the reclamation to reasonable levels, Mayor Osmeña would have sufficiently enticed investors to establish their businesses there.

The plan of the mayor to sell the SRP lots at such reasonably low price is a good policy. It is going to arrest the unjustified leap of prices of land in the city. For a long while, we have seen the skyrocketing of these land values. The availability of cheaper SRP lots will force developers and others who deal in land transfers to check their own prices. Eventually, the public will recognize that the prices of land deals will be more reasonable.

This marketing spiel of our honorable mayor is brilliant. With it, he can engage Ayala and the owners of the Mandaue reclamation to a healthy competition. Consider that there is so much land space in these concerns. With lower prices at SRP, real estate owners will be forced to scale down their own. In the end, real estate transactions will multiply and hopefully, other economic activities will be spurred.

Like many Cebuanos, I hope that Mayor Osmeña's hype can turn Cebu City into an economic dragon. If, however, God forbid, he does not achieve his bravado, we can always rely on the fact that dragons are not real.