Cebu Seeks Investors in 240-hectare South Road Properties (Sept 2006)

Cebu City (27 September) -- Sites for recreational park and retirement villages could be an ideal project in the 240-hectare South Road Properties (SRP), said Cebu City planning and development officer (CPDO) Nigel Paul Villarete....
But the city government, however, has not been able to close a deal yet with an investor who may be interested to buy or lease a portion of the SRP to put up retirement facilities, and the city also lacks a feasibility study on the viability of converting Pond A into a marine park, Villarete said.

Mayor Osmeña said he did not favor the established of a marina park at the SRP because this venture offered few jobs and added that he has already turned down a business proposal for a marina park. Instead he wants the SRP to cater to industries that would provide more jobs for Cebuanos.

Villarete said he believes a marina park in Pond A was feasible but that it would need the approval of Mayor Tomas Osmeña. “It is always feasible but whether or not it is desirable or it is the right option is another consideration. Our main consideration is whether or not it is investment-driven,” Villarete said.

Five Cebu City officials who recently traveled to the United Sates have asked the CPDO to study the feasibility of having retirement villages in the city.

In a travel report submitted to the council, the group led by Vice Mayor Michael Rama also wanted a study made the possibility of putting up a marina park in Pond A similar to one they saw in Nevada, USA.

The report said that the Nevada Marina Park was a favorite destination because it offered recreational fishing, man-made beaches and picnic areas.

Villarete, who has not seen a copy of the travel report yet, said he was willing to study the proposal and added that Mayor Osmeña sent out invitations to Japanese businessmen who may be interested to put up retirement villages at the SRP during a trip to Japan two years ago.

“The city has long planned to have a retirement village but we need investors to do that. The city can’t compete with the private sector and initiate that,” Villarete said.

The mayor, he said, is especially interested in having a Japanese and Korean retirement village at the SRP since they dominate tourists arrival in the country now.

“I’ve also had many inquiries on the matter but I don’t know if there have been negotiations. That is already the task of the Cebu Investment and Promotions Center (CIPC),” Villarete said.

He said there was a need to determine if converting Pond A into a Marina Park would help local tourism and blend with the use of neighboring properties.

The environmental impact if operating a Marina Park also has to be considered, he said.

The 2-meter to 2.5-meter deep Pond A May also be used for fish propagation, aqua culture, water sports, a runway for water planes and other tourism related uses. (PIA/gfg)

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Osmeña: Accelerating the completion of SRP (Sept 2006)

By Antonio V. Osmeña
Estatements

IN practice, the terms “subdividing” and “developing” are used interchangeably. Technically, however, the application of these terms differs significantly...
There are owners, operators and speculators, for instance, who are interested only in the less intricate business functions of acquiring tracts of land at wholesale and selling them already subdivided or at retail. Will the South Road Properties (SRP) be sold like this? Or will it be offered to those who are interested in going beyond the initial stage of urbanization, and assume business functions that involve the entire development of the area.

Literally interpreted, subdividing means the “breaking-up” of one or more large tracts of land into smaller plots, subject to community regulations, if any, governing the use of property.

Where subdividing is the owner’s intent, he need not incur any additional expense, other than those related to the purchase and survey of the land, to the placement of markers or stakes at intended plot boundaries and to submit a surveyor’s “plat” of the proposed subdivision for city or municipal officials’ approval.

The “plat,” as a rule, contains information concerning (1) the subdivision name; (2) block, lot, and street designations and dimensions; and (3) proposed easements, rights-of-way and land dedicated to public use. It should be noted that the process of subdividing does not require any physical change in the land per se.

The “paper” subdivision is usually bought in its entirety for urban o suburban development as originally proposed, or it may be held for prospective higher and better uses. In the latter case, the tract of land may be “re-platted” at any time such a change appears financially advantageous to the owner. The prime motive, of course, in any case, is to reap a financial reward from the undertaking.

The owner of the SRP are the taxpayers of the City of Cebu who are now bound to pay the loan used to construct the project.

Thus, for the owner of SRP to pay its loan obligation, developing the reclaimed land is a must.

Whenever land improvements are carried out in accordance with subdivision plans and expenditures are being made to provide essential site facilites, field actions are appropriately classified as land developing.

The SRP needs additional funding for the development of site facilities from the present “raw” land.

Developing the SRP, to be socially, politically and economically successful, Mayor Tomas Osmeña should now create the Cebu City SRP Authority, where only those who are well-informed in real estate business can be appointed.

Generally, these are people with substantial experience in the real estate profession or those who are guided by real estate analysts, civil engineers or consultants who have specialized in the highly complex field of land utilization.

The SRP would probably need an additional P2 to P3 billion to make the lots marketable. The development cost would require the owner to have a business-like organization, such as an authority.

Critics believe that the people who Mayor Tom had entrusted to plan and execute the completion of the SRP have not been effective.

SRP now needs the combined skills of urban planners, architects, civil engineers, real estate consultants and financiers, all cooperating to support and recommend appropriate strategies to Mayor Tom.

The people of Cebu are wary of political maneuvers to derail the project as what had happened to the north reclamation project of Cebu City.

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Build marina park in vacant SRP (Sept 2006)

Cebu Daily News
Last updated 10:38am (Mla time) 09/13/2006

The five Cebu City councilors who went to the United States for almost a month recommended that the unfilled portion of the South Road Properties (SRP) be converted into a marina park....
The recommendation was included in the travel report of Vice Mayor Michael Rama and Councilors Jocelyn Pesquera, Procopio Fernandez, Sylvan Jakosalem and Rodrigo Abellanosa, who traveled around the US in July and August.

The trip cost some P680,000.

The group attended the Sister Cities International 50th Anniversary Conference in Washington D.C., dance sport competitions in San Francisco and the Pista sa Nayon in Seattle.

Before they returned to the country on August 15, Rama and Councilors Pesquera and Fernandez dropped by the Sparks Marina Park in Nevada.

In their report, they said that the 50-hectare unreclaimed Pond A at the SRP can be patterned after the park in Nevada which is a man-made lake filled by 1 billion gallons of water. It has depths varying from 60 feet to 120 feet.

Pond A, which is just across the Inayawan Sanitary Landfill, is filled with murky water. It has the Mambaling River on its side.

The councilors said that Pond A can be like Nevada Marina Park and could host “fishing, man-made beaches, a sand volleyball court, numerous picnic tables, gazebos, a light trail system and an extensive landscape.”

The councilors also asked the City Planning and Development Officer (CPDO) to look into the possibility of putting up a senior citizen retirement village at the SRP.

“The City of Cebu should come up with a good senior (citizen) housing program so as to encourage expatriate(s) to live in the city,” the councilors' report read.

Citing a report by the US National Investment for Senior Living and the Long Term Industries, the demand for senior citizens housing is projected to increase from only 1.78 million units in 1996 to 3.7 million in 2030. /Reporter Doris C. Bongcac

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Osmeña to Reopen Coastal Road in December (Sept 2006)

By Doris C. Bongcac
Cebu Daily News
Last updated 11:10am (Mla time) 09/05/2006

Cebu City Mayor Tomas Osmeña will fully open the Cebu South Coastal Road to traffic during the holiday season to make the South Road Properties (SRP), formerly South Reclamation Project, more appealing to investors...

“We have to re-shift our strategy to create a situation by Christmas that a lot of people will go to the SRP. This will address one of the most important issues that buyers also ask about. Is it accessible? Is it desirable?,” he told reporters during a news conference on Monday.

The mayor said the move was to assure prospective investors that the SRP was accessible in order to disprove a report published in Cebu Daily News (CDN) that the lack of interior roads has been discouraging investors.

Osmeña was reacting to the statement of Joel Mari Yu, executive director of the Cebu Investment Promotions Center tasked to sell the SRP, who presented to CDN the real situation of the property that tied the city to a multi-billion peso loan up to 2025.

Yu had told CDN that most investors only wanted to lease the property on SRP but not buy lots. They also wanted to see interior roads branching out to the South Coastal Road as well as to fill up a crater of about eight hectares wide near the coastal road, which is already about one meter below sea level.

According to Yu, the city government had limited financial resources to build the roads and to fill up the gaping hole.

But Osmeña called the CDN report a “demolition job,” which made it harder for him to sell the SRP.

The mayor said he would open SRP by December but subject to some regulations to avoid vandals, which was the reason why he had closed down the Cebu South Coastal Road that leads to the 240-hectare reclaimed property.

But Osmeña was forced to reopen the coastal road up to 7 p.m. after he was ordered to do so by the court. Still, he required motorists to use a special SRP pass when using the access road in Barangay Mambaling.

Before he will open the road in December, Osmeña promised that facilities like water and power would be put in place.

While electric posts have been put up, these were not connected to the power distributor Visayan Electric Company. Water drawn in the vicinity of the Association of Barangay Councils (ABC) building on Kawit Island was not potable, he said.

Osmeña said he was negotiating with Philinvest to open a restaurant on Kawit Island, as he wanted to bring in economic activity to the SRP to entice investors. The city government has been putting up a man-made white sand beach in a portion of Pond F near Kawit.

Still, he said he wanted to remain selective in the type of industries that would be put up on his centerpiece project. Top priority would be companies that would generate more employment.

He pointed that a businessman wanted to open a water park at the SRP, but he turned it down. He was not also inclined to open a mall in the SRP that would compete with the existing malls.

Osmeña said he would prefer to accommodate manufacturing companies like those found at the Mactan Export Processing Zone. Another acceptable investment is a hospital that will cater to Balikbayans, he said.

The city may also decide to sell a portion of the reclaimed lot for its loan re-payment in the absence of a funding source. “We can sell four to five hectares at P5,000 per square meter on a fire sale. That will take care of a year's loan amortization,” he said.

Osmeña said the city could sell properties located along the main road like those properties along the Mambaling Access Road and the vicinity of Pond F. Interior properties may be up for lease, he said.

Almost a quarter of the city's annual budget goes to repaying the loan of about 12.3 billion yen or about P6.3 billion from the Japan Bank of International Cooperation.

Cebu City Administrator Francisco “Bimbo” Fernandez, for his part, said the main reason that hindered the sale of SRP lots to foreign investors was the provision in the constitution that bans foreigners from completely owning property in the country.

Fernandez said foreigners needed local partners because the constitution only allows them to own 40 percent of a property in the country. Foreign investors who wanted to buy lots in the SRP were still looking for local partners, he added. /with report from Correspondent Jhunnex Napallacan

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City Hall Eyeing New Strategy for SRP (Sept 2006)

The Freeman 09/05/2006

The city government will embark on a new strategy to make sure that the multi-billion South Road Properties will not remain idle in the near future...

This developed as Mayor Tomas Osmeña yesterday contended that the newspaper story, which portrayed the SRP as being difficult to sell, has affected the marketability of the project, thus, a new marketing strategy will have to be in place. 

"We have to offset the propaganda that the SRP is lousy... it's hard for me because the SRP is belittled by a smear in the headlines," an irked Osmeña told reporters. 

What the mayor has in mind is to make sure that the SRP, in a controlled basis, can be opened to the public for scrutiny before December, which means that the city will do its best to finish the 1.4 kilometer white sand beach walk near the Kawit Island. The city also intends to convert the 90-hectare Pond A into a sports park. 

After the basic amenities such as electricity and water are installed, the marketability of the SRP would allow employment of 150 people per shift for every hectare in the site, Osmeña said. 

Sustainability of income is also important, as the city government has until 2025 to pay the over P6 billion loan from the Japan Bank of International Cooperation for the construction of the project. To address this, Osmeña said he is willing to "dive on the price" to sell the land within the property. 

The city government may sell the SRP lot for as low as P5,000 per square meter, but the purchase will be limited to only five hectares per buyer. The earning, Osmeña said, may be enough to sustain the city's payment for the loan. 

Along with the strategy, he said, is to see to it that the city and the project will not go into bankruptcy, and ensure that the SRP will help the city's economy just as how it was envisioned many years ago. 

Osmeña admitted that it may be difficult to sell the inner portions of the SRP due to lack of roads, but what the city wanted is to sell the properties that are located along the main road. 

Two months ago, Osmeña announced that a group of prospective Japanese investors, whom he described as "creative entrepreneurs," expressed intention to visit Cebu to take a look at the SRP and observe the city's economic condition. 

The group is reportedly interested in putting up a hospital or a retirement or handicap home at the SRP. Osmeña said these investors owned 3,000 beds or equivalent to 20 medical facilities in Japan. 

A member of the group has reportedly visited Cebu a month ago and had expressed interest in brining his business in the city. 

In March, the city paid its P250 million amortization of the SRP and subsequently secured the official title for the project. - Joeberth M. Ocao/LPM

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South Reclamation Properties Hard to Sell (Sept. 2006)

Lack of interior roads discourages investors

By Wilfredo Rodolfo III
Cebu Daily News
Last updated 07:48am (Mla time) 09/04/2006

Joel Mari Yu was walking around his office while talking over his mobile phone to an investor - a representative of a Middle Eastern company interested in getting 20 hectares from the South Reclamation Properties (SRP) and develop it into an amusement park...

"They only want to lease? The mayor might have some hesitations. But if they're going to buy, I could make it a lot easier for them," said the executive director of the Cebu Investments Promotions Center (CIPC).

When he put down the phone, Yu explained to Cebu Daily News (CDN) the situation at the 240-hectare SRP, which has tied down the city to a multi-billion debt up to 2025.

Most investors only want to lease the properties on the SRP, which means less money for the city compared to directly selling the lots. Investors also want interior roads branching out to the South Coastal Road.

Yu, who has been tasked to sell SRP abroad, said many potential investors also want the city to fill up the crater of about eight hectares wide near the coastal road, which is already about one meter below sea level.

But the problem is that the city government has limited financial resources to build the roads and to fill up the gaping hole.

"The city needs the cash now," Yu said.

Five years after the SRP was completed in 2001, not a single development has been put up by an investor.

So far, only two buildings have been erected at the reclamation project - an unoccupied Association of Barangay Councils building and an administration building.

It also has a fort-like wall and a stage - huge selling points when the national government promised to bring the main office of the Department of Tourism to the SRP, which, up to now, has yet to materialize.

In the meantime, almost a quarter of the city's annual budget goes to repayment of the loan of about 12.3 billion yen (about P6.3 billion) from the Japan Bank of International Cooperation (JBIC).

In 2006 and 2007, the city is expected to shell out close to P1 billion in loan amortizations. The Land Bank of the Philippines had estimated earlier that the city would shell out P10 billion more in the next 15 years until the loan was fully paid.

But Yu explained that the SRP is not short of interested locators - from development companies wanting 100 hectares to commercial establishments asking for a few hundred square meters.

"The problem is how to put them all together," he said.

Cebu City Mayor Tomas Osmeña explained that there are plans to build the interior roads that will not further burden the city government financially.

"We have no plans of just building roads. We will build it according to specific needs of the investors," he said.

The mayor's plan is to use sandbags as the main carriageway of the four-lane roads.

Osmeña explained that the two outer lanes would be made up of sandbags, while the two inner lanes would have sandbags with asphalt poured over them.

"We will test this for one year and see what will happen," he said.

While the city prefers property buyers, the mayor said he is not shutting his doors on lessors, especially those that will bring in more employment.

"We will only lease to companies that would be employing many people," he told CDN.

If leased, each square meter at the SRP will be priced at P45 per year. This means that for every hectare, about P450,000 will go to the city's coffers every year.

But if a piece of SRP property is sold at Mayor Osmeña's "fire sale" price of P10,000 per square meter, a hectare of land will easily snatch up P100 million. A fire sale is defined as a sale of assets at reduced prices in order to raise money quickly.

If the city can sell the entire 240 hectares, it will easily bring in P24 billion.

In order to consolidate the buyers and the lessors, Yu keeps track of all the feelers, plots their land size requirements and fits them into the rectangular SRP map like a jigsaw puzzle.

"When they are all consolidated maybe we can lease the land and raise the cash to build the roads," Yu said.

Conceived as early as the 1970s, the SRP was envisioned to draw in billions of investments and create 100,000 jobs for Cebuanos. On its beachfronts, condominiums and hotels were supposed to rise.

But 11 years after the first truck dropped dirt into the sea off the coast of Barangay Mambaling, the promise has yet to be fulfilled.

Still, Osmeña, who fought tooth and nail to secure the foreign loan to build the project, remains very optimistic about the project.

With the sandbag roads in place, he said the first construction equipment from a locator might come in by first quarter of 2007, Osmeña said.

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