CEBU, Philippines - The construction of a P1.4-billion Japanese retirement facility at the South Road Properties will no longer commence next year due to some delays approving the leasehold agreement with the Cebu City government.
The I Land Way Philippines Incorporated and Beta Aquila Primary Corporations, which submitted an unsolicited proposal to the city government, eyed the construction of a multi-storey retirement hub to start on the second quarter of 2015.
However, this will no longer push through since the city government and the Japanese investors have yet to draft the terms and conditions of the project, which is subject for the final deliberation on June 15.
In an executive session yesterday afternoon, the members of the City Council, majority are allies of Bando Osmeña Pundok Kauswagan (BOPK), scrutinized the final proposal of the Japanese investors, particularly the floor price and the lease term of the 12,500-square-meter SRP lot.
City Council majority floor leader Margarita Osmeña said the P32 per square meter lease rate has a huge difference from the city's proposed P100 per square meter. The Japanese investors, however, said that the base rent is higher than the prevailing rates of MEZ1 and MEZ2 in Mactan, which is P28 per square meter.
Likewise, Osmeña said the lease period of 75 years (50 years and additional 25 years lease period) proposed by the investors is somewhat impossible. "75 years is more than a lifetime. On that period, we will all be fertilizers," she pointed out.
On the contrary, lawyer Jose Daluz III, chairman of the City Bids and Awards Committee, said the lease period is "just right and sufficient".
"We are supporting the proposal of the Japanese. I appeal that we may follow their proposal for the benefits of our constituents," Daluz said.
Philippine Retirement Authority General Manager Veredigno Atienza affirmed that the proposed lease term is "reasonable enough".
"75 years is just right for project like this because baby boomers have at least 30-40 years," Atienza said, adding that the project will have a significant advantage in boosting Cebu's economy and tourism.
"The Japanese companies will surely bring in retirees, meaning revenue for the city. They look for stability, confidence in building measures and care much about profit. But they are willing to sacrifice profit for stability. This will make Cebu and Philippines successful," Atienza stressed.
President of I Land Way Philippines Kazuhito Matsuda cited Republic Act 7916 (Special Economic Zone Act of 1995), which allows foreign investors, registered with Philippine Economic Zone Authority (PEZA), to lease not exceeding fifty years and extendible once for a period not more than 25 years.
Moreover, Osmeña said the City Council does not want to bar any progress for the city, explaining that they are just trying to protect the welfare of the general public.
"We are not here to question and stop everything. We welcome very much the opportunity of being the first (retirement hub). We appreciate the confidence the investors have for Cebu. But, remember this is a long term investment and so we must protect our constituents by giving them the best," she said.
"So we must sit down and look at the list, the terms and conditions and the contract to ensure prosperity in Cebu," she added.
Lawyers of I Land Way Phils Inc., Beta Aquila Primary Corp, retirement facility ad hoc committee headed by Councilor Gerardo Carillo, City attorney, and lawyer Daluz are set to finalize and iron out the details of the leasehold agreement to properly incorporate "safety nets". (FREEMAN)