Titling Pond A (South Road Properties)

AFTER the first sale at the South Road Properties (SRP), Cebu City Hall will now work on the titling of the remaining 60-hectare unfilled Pond A, but the area will not be reclaimed.

Mayor Tomas Osmeña is scheduled to meet with Department of Environment and Natural Resources (DENR) Secretary Lito Atienza on March 12 to discuss the titling and to secure a foreshore lease agreement for the entire waterfront area of the 302-hectare SRP.

City Administrator Francisco Fernandez said the City Government will be leasing the shores of the 10.6-hectare Pond F for Filinvest Land Inc. (FLI’s) beach front development project.



Old concept

“Mayor Tom will discuss all these things with Secretary Atienza. They said it can’t be titled because it’s all water but that’s an old concept. We want to develop that area to have villas on stilts, that’s the new concept, a trend in urban waterfront development so that will be our contention when we ask for it to be titled,” he told Sun.Star Cebu.

Fernandez said that Pond A will be used for a high-end development project, which will be patterned after structures of the man-made islands in Dubai, U.A.E. and the houses that stand on canals in Venice, Italy.

As for the beachfront development, FLI and the City intends to construct a promenade, baywalk and other structures along the shore of Pond F, which FLI will develop into a cluster of high-rise hotels and condominiums.

Lease agreement

Fernandez said it will be easier and faster if the City will be the one to secure the foreshore lease agreement and not FLI, which purchased the 10.6-hectare property.

“Pond A right now is all water but its titling should be allowed already because development concepts have changed.

Anyway, it’s already surrounded by land. The mayor will argue that when he talks to Secretary Atienza. He will also bring up the foreshore lease, whether it’s possible or not, that’s still subject for discussion,” he said.

In a phone interview yesterday, DENR 7 technical director for land management Diana Apistar said the regional office cannot decide if Pond A can be titled as it is, since it’s the central office that decides on such matters.

She said, however, that titling of unfilled properties may be done “on a case-to-case basis.”

“That would require a special patent and it’s the Manila office that decides on those things. Case-to-case basis kasi iyan,” Apistar said.

In September 2005, the City Government was able to secure the certificate of titles for 210 hectares of reclaimed land within the SRP.

The 60-hectare unfilled Pond A, the close to three-hectare portion claimed by the Ting family, and at least 20 hectares of roads and sidewalks are the only remaining untitled portions of the 302-hectare facility.

Also, City Hall has completed all but one of the requirements before FLI turns over on March 3 its P348-million down payment for the joint venture undertaking with the City.

Fernandez said they just have to secure the escrow agreement with the Land Bank of the Philippines (LBP), for the latter to take possession of the titles of all lots covered by the join venture activity. (LCR)

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Filinvest to pay city P338 million next week (South Road Properties)

CEBU, Philippines - Filinvest Land Inc. will turn over the P338-million first down payment check to the Cebu City government on Tuesday.

The P338 million is part of the payment for the 10.6-hectare lot at the beach front of the South Road Properties which FLI is buying as an outright purchase after a joint venture agreement signed by both parties last month.

The down payment is pursuant to the provisions of the contract for FLI to make the first payment 30 days after the signing.



Two titles will be turned over to FLI by the city in exchange for the down payment.

The other part of the contract includes the 40 hectares under joint venture assuring the city an income share from the number of units developed and sold by FLI.

The total cost of the FLI project is P25 billion in 25 years.

The city will also create another joint venture, this time for the water utility provider for the entire 302-hectare SRP.

Acting Mayor Michael Rama is set to compose the Joint Venture Selection Committee to tackle the unsolicited proposal of Pilipinas Water Resource Inc.

Water and electricity, city administrator Francisco Fernandez said, had to be finalized the soonest since FLI is set to develop the first phases of the two areas for the next six months.

FLI will construct a cluster of high-rise buildings on the seafront, medical and retirement facilities, commercial and residential buildings and office spaces.

It is the city’s first sale of the SRP in three years. — Ferliza C. Contratista/BRP (THE FREEMAN)

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Tomas to get back his job (South Road Properties)

CEBU City Mayor Tomas Osmeña will assume full power as mayor when he comes home for a three-week vacation on March 8.

Osmeña, 60, has been on medical leave since October last year for medical treatment.

Osmeña will have a busy schedule when he arrives, with several meetings and consultations with city councilors, barangay officials, City Hall department heads, police officials and the different commissions of the City Government.

City Administrator Francisco Fernandez said yesterday that the mayor will stay in Cebu for at least two weeks. He will then fly back to Houston, Texas for further treatment of his urinary bladder cancer.



“I will assume as mayor. I will need to use my staff and office facilities. I will also be hosting several activities and consultations. Department heads, councilors, barangay officials, police, commissions, etcetera, they will officially report to
me,” he said in a text message sent from the Bahamas, when asked if he would still be on sick leave while in Cebu.

Osmeña, 60, has just finished his chemotherapy to help cure his stage three urinary bladder cancer. He will have a three-week break from treatment before he proceeds with the surgery to remove his bladder.

After his chemotherapy, he decided to go on a cruise in the Bahamas with Margot and son Miguel.

The Osmeñas are expected to arrive on March 8, City Information Officer Nagiel Bañacia said.

Bañacia said that among the activities the mayor is expected to attend is the awarding ceremony for the top 75 business and real estate tax payers of the City on March 15.

He is also scheduled to meet with Environment Secretary Lito Atienza on March 12 to discuss matters involving the South Road Properties (SRP).

But in a phone interview last night, City Treasurer Rene Empaces said the awarding of the top taxpayers is still a proposal of her office, and will need the approval of the Cebu City Council and the Office of the Mayor.

The City Treasurer’s Office (CTO) has a list of the top 75 taxpayers, but Empaces said it will not be released until it is approved.

“We are fine-tuning the list but we cannot provide the details yet because the proposed activity has not even been approved by the Council. It’s still a proposal, as part of our activities and it will only become official once the council approves it,” Empaces said.

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Council to tackle South Road Properties power supply next week

CEBU, Philippines - The Cebu City Council has postponed the discussion on the proposed memorandum of agreement (MOA) between the Visayan Electric Company (VECO) and the Cebu City government for power distribution at the South Road Properties.

The MOA was supposed to be taken up yesterday but the council has decided to cancel yesterday’s regular session to give councilors time to have a break after the celebration of the city’s 72nd Charter Day on Tuesday.

City administrator Francisco Fernandez said the MOA was submitted by Cebu Investment and Promotion Center (CIPC) managing director Joel Mari Yu to him only last Friday and he immediately referred it to the council for approval.



Fernandez said the council may take it up and act on it immediately or refer it to the Bids and Awards Committee (BAC).

It was decided earlier by the city officials and mayor on-leave Tomas Osmeña to let the VECO supply power to the SRP considering that the facility still falls under the franchise area of the power firm.

Under the MOA, VECO will pay the city 20 centavos for every kilowatt-hour of electricity supplied to the locators of SRP.

Fernandez said that at present, the city has no choice but to tap VECO because they are not capacitated to connect directly to the National Power Corporation.

He said Napocor might set a minimum requirement which is hard to attain for now since there is no evident demand yet. The city is now fast-tracking the putting up of utilities because Filinvest Land Inc. is expected to start the development of the 50.6-hectare area in less than six months.

For the water supply, the city is also set to compose soon the Joint Venture Selection Committee that will look into the unsolicited proposal of Pilipinas Water Resources Inc. — Ferliza C. Contratista/WAB (THE FREEMAN)

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FLI to pay downpayment for South Road Properties lots this March 3

CEBU, Philippines - Filinvest Land Incorporated (FLI) will be paying the P348 million down payment to the city government on March 3 for the recently-awarded P25 billion project to develop a portion of the South Road Properties (SRP).

Tristan Las Marias, FLI vice president for the Visayas and Mindanao said, the expected down payment date is on March 3, or 30 days after the signing of the joint venture contract by both parties.

The P348 million down payment is for the outright purchase of 10.6 hectares worth P1.5 billion.

The balance will be paid in a span of three years.



Lawyers of FLI are in town to represent the company on discussions pertaining to actual surveys, titling, securing of foreshore rights and other administrative and government consents for the validity and enforceability of the outright purchase.

Assistant City Treasurer Emma Villarete said, they already have a Letter of Credit amounting to P250 million which will expire on March 4, 30 days after the February 3 signing.

“By that time we can already collect the initial down payment from the bank that issued the LC,” Villarete said.

FLI will then pay the balance to complete the P348 million down payment on the same day.

The initial P250 million LC was then a placed as a guarantee fund for their unsolicited proposal covering 10 percent of the total project price.

Villarete said the down payment is already enough to cover the first semi annual payment of the P6 billion-loan of the city from Japan in 1994.

The first part of the agreement is for the 40-hectare joint venture development, which assures the city an income of 10 percent gross sales of built up units or a guaranteed premium, whichever amount is higher.

FLI is the first buyer of the SRP in three years since its completion.

The city is already finalizing the Memorandum of Agreement (MOA) for the electricity provider, Visayan Electric Company (VECO). A Joint Venture Selection Committee (JVSC) is also to be formed to evaluate the proposal of Pilipinas Water.

Utilities have to be in place since FLI is set to start development in six months. — Ferliza C. Contratista/NLQ (THE FREEMAN)

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Council okays South Road Properties lot donation to UP

CEBU, Philippines - The Cebu City Council has approved the committee report giving authority to acting Mayor Michael Rama to pursue donating a lot of the South Road Properties to the University of the Philippines.

This after the Committee on Laws headed by councilor Edgardo Labella, reviewed the resolution and recommended its approval.

The resolution authored by councilor Jose Daluz III which authorized Rama to execute and sign the Deed of Donation in favor of UP was referred to the said committee two weeks ago



According to Labella’s committee report, the proposed resolution is within the power of the city council to enact considering that a local government can grant loans or provide grants to educational institutions as part of its duties and functions.

Councilor Rodrigo Abellanosa, earlier called for the resolution’s deferment doubting the capacity of UP or the national government to start or sustain the project.

Abellanosa cited properties of UP Cebu which are in Lahug and also in Lawaan, Talisay City, which are now claimed and occupied by squatters.

He suggested other school options which can sufficiently support and start the project especially as the SRP is a prime lot.

Last Wednesday and prior to the approval of the committee report, Abellanosa then asked for specific plans of UP but Labella reasoned said it is already mention in the deed of donation.

Labella said UP is under condition to use the property as part of its flagship Centennial Project to offer programs in the fields of computational science, product design and packaging, communications design, management sciences, mathematics and the arts and humanities in the Visayan and ASEAN regions.

Labella also said the property will be taken back by the city should UP fail to construct the needed infrastructures in three years time.

With this Abellanosa agreed for the approval of the committee report.

The city intends to donate to UP, Lot 1-G-Part, situated in the SRP with an area of 51,372 square meters.

UP graduates are seen to boost manpower of locators soon to be established in SRP. — Ferliza C. Contratista/BRP (THE FREEMAN)

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Water, power deals for South Road Properties to be finished this month

CEBU, Philippines - The negotiations for the water and power utilities for the South Road Properties will be finalized before the end of the month.

Developments at the SRP are now fast-paced with the finalizations of negotiations for the water and electricity providers, according to Joel Mari Yu, head of the Cebu Investment and Promotions Center, the marketing arm of the SRP.

For water, Yu said he may submit on Monday his evaluation on the proposal of Pilipinas Water Resources Inc. to city administrator Francisco Fernandez who will submit this to acting Mayor Michael Rama.



Rama is part of the Joint Venture Selection Committee that will look over the water proposal and also come up with the provisions for the requirement of other entities interested to bid.

The treatment of the water proposal is like the processing of the Filinvest Land Inc. proposal which is under joint venture,

Once the terms of reference of the joint venture are in place, there will be a publication of notice for interested bidders, submission of bids and awarding of the project.

On the other hand, the city government has decided to let the Visayan Electric Company supply electricity to the 306-hectare area considering that the SRP is within the jurisdiction of the franchise.

Yu said the memorandum of agreement will be finalized next week followed by a resolution authorizing Rama to sign the document.

Both utilities will be charged with distribution fee per kilowatt-hour and per cubic meter considering that the SRP is operating as a special economic zone.

The FLI legal group will be in town next week for the legalities on the initial transfer of titles of the two hectares which were conditioned to be conveyed by the city government after the payment of the P330-million down payment.

FLI was awarded recently to develop 50.6-hectare area for residential and commercial spaces at a P25-billion investment. — Ferliza C. Contratista/BRP (THE FREEMAN

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City to give employees long held off allowances (South Road Properties)

CEBU, Philippines – As early as now, Cebu City Hall is experiencing part of the fruits of the first sale at the South Road Properties.

This as the City Hall employees will receive their Additional Compensation Allowance and Personnel Emergency Relief Allowance which was supposed to be released in 2006 yet.

Acting mayor Michael Rama yesterday announced during the weekly flag-raising ceremony that the over 4,000 city government employees may receive the 2006 ACA and PERA allowances in time for the 72nd Charter Day celebration.



A supplemental budget will be crafted by council committee on budget and finance which will legalize the release.

City administrator Francisco Fernandez said the giving of ACA and PERA started in 2006 but the city at that time could not afford it yet because of the payments for the SRP.

Now with a surplus of over P250 million from 2008 and with the recent closure of the first bulk sale of the SRP, the city can now extend the long-delayed allowances to the employees.

PERA and ACA was already raised to P1,000 each in 2007.

The city made its first sale recently with Filinvest Land Inc. for the development of 50.6 hectares for modern commercial and housing center.

The total contract is P25 billion, which entitled the city a down payment of P250 million. — Ferliza C. Contratista/BRP (THE FREEMAN)

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Body to study proposed water source at South Road Properties

CEBU – Following the recent signing of the joint venture agreement between the city government and the Filinvest Land Inc., the city will form another committee that will choose the company that will supply water to the South Road Properties.

Cebu City administrator Francisco Fernandez said acting mayor Michael Rama is expected to issue a memorandum soon to form a new committee to tackle the unsolicited proposal of Pilipinas Water Resources Inc.

“It may be the same composition as with the JVSC that tackled the Filinvest proposal or other persons may be appointed. It’s the mayor’s discretion,” Fernandez said.

However, there are reports that the new committee may be composed of the same persons that earlier studied the FLI’s proposal.



Joel Mari Yu, managing director of the Cebu Investment Promotions Center, the marketing arm of the SRP, said utilities such as water and electricity should already be finalized now that FLI is expected to start developing the portion covered by the deal in the next six months.

FLI will first develop the 10.6 hectares that is covered by the outright purchase for the high-end residential and commercial spaces as well as the first phase for the 40-hectare lot that is under joint venture with the city.

Yu admitted that before Mayor Tomas Osmeña left for Houston, Texas, to seek treatment of the cancer in his urinary bladder in October, the mayor had instructed him and SRP manager Nagiel Bañacia to award the contract for the water provider under a joint venture.

The city has already chosen to get electricity from the Visayan Electric Company because SRP is still under its franchise area.

Yu said all utilities will have to pay distribution fee to the city government considering that SRP is a special economic zone.

Presently, a desalination plant with a capacity to produce 800 cubic meters of potable water per day is already operational at the SRP that supplies the water needs of the Bigfoot Entertainment complex and construction activities in the next two years.

In the event the city awards the contract to PWRI, a consortium of Mactan Rock Industries Inc. and the Lhuillier Group, the city will ask it also to operate the desalination plant at the SRP and to provide all necessary water infrastructures inclusive of the pumping stations, reservoirs and pipes.

Once the new committee is formed, it will post a notice inviting other private entities to submit a challenge against the proposal of PWRI. — Ferliza C. Contratista/WAB (THE FREEMAN)

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2 has. turned over to FLI in March (South Road Properties)

                    Blessing of South Road Properties' Sr. Sto Niño Last  01/23/2009

CEBU City Hall has started the legwork for the joint venture project with Filinvest Land Inc. (FLI), and has asked the Bureau of Lands and the Registry of Deeds to break up the titles of the 302-hectare South Road Properties (SRP).

Titles of the mortgaged SRP lots that the Land Bank of the Philippines (LBP) will release to the City Government anytime will have to be broken into several titles so the City can turn over a two-hectare portion to FLI next month.

City Administrator Francisco Fernandez said that a team of lawyers and technical experts has been formed to assist the SRP Management Office (SRP-MO) in seeing to it that both the City and the FLI meet their obligations on time.



This, as the City Council passed a resolution amending the joint venture agreement between the City and FLI, less than 24 hours after the contract was signed.

Acting Mayor Michael Rama wrote the council yesterday to inform the body that he has inserted a provision in the contract, which he believes “would best serve and protect the interest of both our city and FLI.”

The added provision states that if the City is the innocent party in any incident that will keep the joint venture activity from progressing, “it should have the right to continue with the agreement…or alternatively, withdraw from or cancel the
agreement with full right of compensation against (FLI)…”

Rama told a news conference that he will ask for a timetable and a list of all the City’s and FLI’s obligations in the contract, so he can monitor the compliance to make sure there are no delays in the project.

“We have certain responsibilities in the contract, so I want to have a checklist because there are things that need to be addressed, including the sewage treatment and other related utilities, the payments and who will be monitoring these things.

I will check it from time to time so I can easily give an answer when I am asked about it,” he said.

Deal

Rama and FLI vice chairman Andrew Gotia-nun Jr. signed Tuesday afternoon the agreement for the joint venture development of the 40-hectare area of the SRP and the outright sale of the 10.6-hectare Pond F.

FLI committed to invest P25 billion to build high-rise condominiums, office buildings and a hotel in the 10.6-hectare area, and a cluster of five-story residential buildings in the 40-hectare area.

The deal is the first sale at the SRP, which came four years after the City started paying for its multi-billion loan used to undertake the reclamation project.

In an interview yesterday, Fernandez said the SRP-MO was tasked to work on the setting up of the water and power supply, sewage treatment and other utilities, as well as the re-titling of the properties.

It will be assisted by other lawyers and technical experts who will make sure that everything is implemented on time.

“The SRP-MO will be mobilized now so it can work with (FLI), but they will be augmented. The team will review the contract and check what needs to be done by the City,” he told Sun.Star Cebu.

As of yesterday, the Bureau of Lands has already approved the technical description of the 10.6-hectare portion purchased by FLI, which will be forwarded to the Registry of Deeds so the titles can be broken into five separate titles, with two hectares each.

The title of a two-hectare portion will be turned over to FLI as soon as it pays the P348 million down payment next month, while the other titles will be released after the payment of some P250 million every year for the next three years.

The title for the 40-hectare joint development properties will also be broken down so the City can have four titles covering 10 hectares each, which will also be turned over to FLI as soon as it can pay for the properties over a 20-year period.

Since the SRP titles are still mortgaged with the Land Bank of the Philippines, the conduit bank for the SRP loan,
Fernandez said the titles will continue to be in the custody of the bank. (LCR)

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No harm in donating South Road Properties lot to UP - Yu

Sugbu Buillding during Christmas Season

Updated February 05, 2009 12:00 AM

CEBU - The Cebu Investment and Promotion Center, the marketing arm of the South Road Properties, is confident that the city will not be at a loss if it donates a parcel of land at the SRP to the University of the Philippines.

CIPC head Joel Mari Yu explained that there are sufficient safeguards and guarantees placed within the contract for the donation, one of which is the provision that the city can recover the property if UP fails to start a project or fail to put up the agreed number of structures therein within three years.



“If within three years, the UP administration failed to start the project, or failed to put up the minimum number of structures, then Cebu City gets back the property,” Yu said.

Mayor-on-leave Tomas Osmeña has wanted UP to offer masters degree programs at a separate campus at the SRP. Osmeña specifically wanted the university to offer a master’s degree on accountancy to those that would be employed by locators at the SRP.

“It is the Mayor’s vision to have a portion of SRP as the center for Information Technology,” Yu said.

Councilor Rodrigo Abellanosa earlier has asked to defer the approval of the resolution covering the Deed of Donation, saying the move involves a very high risk, one of which is the capacity of the national government to allocate sufficient funds to start and sustain a new project for the university.

UP itself has failed to recover its properties in barangay Lahug and a big chunk of land in barangay Lawaan in Talisay City, which are now being occupied by illegal settlers.

Abellanosa then proposed to open the donation to other universities like Ateneo and La Salle before the city arrives at a decision. — Ferliza C. Contratista/JMO (THE FREEMAN)

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Water, electricity in South Road Properties in six months – exec

By Jully Venus Cuizon, Correspondent

THE Cebu City government is confident of accomplishing its part of the deal with Filinvest Land Inc. to develop the 50.6 hectare of South Road Properties (SRP).
Francisco Fernandez, chairman of the Joint Venture Selection Committee (JVSC) , said yesterday that the city will comply with the conditions of the joint venture contract worth P25 billion, not P250 million as reported yesterday.
This means that the water and electricity systems will be in place at the SRP within six months.


The joint venture contract was signed on Wednesday by Cebu City Mayor Michael Rama and Filinvest vice chairman Andrew Gotianon Jr.
The signing seals the JV deal between the city and Filinvest.
Under the contract, the Filinvest is given six months to get the necessary permits and start developing the 40 hectares at the SRP in August.
The signing of the contract also means that Filinvest will pay the city within 30 days the P348 million in downpayment for the outright sale of another 10.6 hectares, which was part of the JV deal.
On the part of the city, the JV contract stipulates that the city government should ensure that power and the water system has been installed before Filinvest will start to operate.
But there are such utilities yet in SRP yet.
Fernandez said there is existing wiring for power connection to the Visayan Electric Company but the city government is still negotiating with Veco to supply the electricity at the SRP.
The negotiations were done with Veco because the firm is the franchisee of power for the SRP and all parts of Cebu, said Joel Mari Yu, managing director of Cebu City Investment and Promotions Center (CIPC), which is the marketing arm of SRP.
Yu said Veco, however, will have to pay the city concession if the negotiations will prosper.
Veco will have to pay SRP a concession fee per kilowatt hour because the SRP is a special economic zone, he added.
Yu cited an amount between 20 centavos and 25 centavos per kilowatt hour as power concession fee.
But he said that this figures had yet to be approved by the Energy Regulatory Commission (ERC).
It's a different story for the water utility.
The city government is considering an unsolicited proposal for a joint venture deal for a total concession for water operations within the SRP.
“Total Concession means that they do everything themselves. They will operate, maintain, build, collect, repair and install the pipes at no cost for the city,” Yu said.
He said that the water concessioner will have to pay for everything because they are the ones selling the water in SRP.
They will also be required to pay the concession fee for every cubic meter of water sold at the SRP.
Yu, however, said that the water deal will have to be bidded out unlike the Veco negotiations.
Fernandez said that the city government is evaluating the unsolicited proposal of Mactan Rock Industries Inc. to provide the water operations in SRP.
Fernandez said another investor interested in supplying water at the SRP is Pilipinas water.
The proposals, however, had yet to be discussed and reviewed by the JVSC. If it accepts the proposal, then it will go to the City Council.
Meanwhile, the Cebu City Council said donating a 51,000-square meter lot in the SRP to the University of the Philippines will not be a disadvantage to the city.
City Councilors earlier questioned the UP's financial capability to build a school in the lot.
Councilor Rodrigo Abellanosa opposed the motion to authorize Rama to sign the deed of donation to UP on Jan. 28.
Abellanosa, who owns Asian College of Technology, cited a lot in Talisay City that was donated to UP but has remained unused.
But Yu said that UP is obliged to put up a school building in three years after the deed of the donation is signed or else the property will be taken back by the city government.
Yu said the arrangement which is within the contract between the city and the university is still pending at the City Council's committee on laws and education.
Abellanosa earlier suggested to donate the property to Ateneo University or De La Salle University, which has the capacity to develop the lot.
But Yu said that UP was the choice of Cebu City Mayor Tomas Osmeña because of the school's track record for Information Technology (IT) graduates.
Yu said UP is considered has the best IT training in the country.
Yu said the presence of the university in the SRP increases the marketability of the property.

With a report from Reporter Marian Z. Codilla

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Contract signed at last: Filinvest, city ink South Road Properties venture deal

 Cebu City acting mayor Michael Rama (left) shakes hands with Filinvest Land Incorporated president Andrew Gotianun Jr. after the signing of the joint venture agreement. ALDO NELBERT BANAYNAL

                                  

By Ferliza C. Contratista Updated February 04, 2009 12:00 AM

CEBU - Finally a sale!

The Cebu City Government and Filinvest Land Inc. (FLI) yesterday signed a joint venture agreement for the development of 50.6 hectares in the South Road Properties (SRP).

“Finally, the long route of wanting to seal this agreement has come, after all the hard work, we thank everybody and the Sto. Niño for protecting the SRP,” said Acting Cebu City Mayor Michael Rama.

Rama, after having been given authority by the City Council, signed the contract with Andrew Gotianun, president of FLI with the city councilors and members of the Joint Venture Selection Committee (JVSC) as witnesses.



Rama made special mention and requested a warm round of applause to Cebu City Mayor on Leave Tomas Osmeña for being responsible in building the dream and realizing the SRP project.

Osmeña expressed his thanks and happiness in a text message sent to Rama over yesterday’s momentous development.

JVSC Chairman and City Administrator Francisco Fernandez along with Cebu Investment Promotion Center head Joel Mari Yu were all smiles after going through a tough negotiation for the best interest of Cebu City in the said deal.

“All’s well that ends well,” Fernandez said.

Fernandez said he is thankful that everything turned out positive for Cebu City despite certain hitches along the way, which were considered as “sweet challenges” for the forging of the agreement with FLI.

JVSC proceeded with the awarding of the P25 billion project last week after no other qualified interested party submitted its intent to challenge FLI’s unsolicited proposal.

The Provincial Government attempted to qualify, but was not able to qualify to submit a competitive challenge.

In the next 30 days, FLI will already make a down payment of P348 million, from the first part of the contract, which is the outright purchase of 10.6 hectares amounting to P1.592 billion. The balance will be payable in the next three years.

The said amount is enough to cover the first semi annual payment of the P6 billion-loan of the city.

Yu, who acted as the main negotiator of the city government panel said there will be four payments in three years, first the down payment of P348 million, followed by another payment prior to the end of the 2009, the second will be on 2010 and finally in 2011.

On the other hand, the second part of the contract covers 40 hectares to be developed under a joint venture.

He said the city is assured of an income from 10 percent gross sales of built up units or a guaranteed premium, whichever amount is higher.

After the signing, Yu said, the next step is the finalization of the putting up of utilities such as water and electricity.

It has to be done, Yu said, since FLI is expected to start constructing in the next six months.

On the other hand, Yu said, they are entertaining the unsolicited proposal of Mactan Rock International, for the provision of water in the entire SRP area, under a joint venture.

Just like FLI, the same process will be observed with Mactan Rock as it will face competitive challenges from private entities.

Since the SRP was opened for sale, lease or joint venture in 2007, the city has only leased out a three-hectare portion to Bigfoot Global Solutions.

On behalf of Gotianun, Tristan Las Marias, FLI VP for Visayas and Mindanao, said that the hard work is not over as it is yet to start.

He said they will start developing as soon as their master development plan will be finalized.

Other than the FLI offer, Yu said they are also negotiating with SM Prime Holdings Inc., Ayala Land and Pueblo de Oro for the sale of other portions of the SRP. –/NLQ (THE FREEMAN)

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Cebu City soon to get P348-M for South Road Properties land

Cebu City will soon receive P348 million from the Filinvest Land Inc. as down payment for the outright purchase of a 10.6-hectare lot at the South Road Properties (SRP).

The City Council yesterday authorized the mayor to sign the contract after the Cebu City committee on laws determined that the Joint Venture (JV) contract between the Cebu City government and the Filinvest was legal.

But acting Cebu City Mayor Michael Rama said that he would have to study the contract first before signing.

Cebu City Administrator Francisco Fernandez, who is also the chairman of the Joint Venture Selection Committee (JVSC), said the Council only authorized the mayor to sign the contract and does not mandate Rama to sign it.



But he said he hoped that Rama would agree with the provisions in the contract.

Rama assured his review would not take long as he would be the last person to stop the project.

Tristan Las Marias, Filinvest vice president for the Visayas and Mindanao, asked the city to transfer the title of the two hectares of the 10.6-hectare property covered in the outright purchase to Filinvest once they hand over the down payment.

Upon the signing of the contract, FLI will pay the city P348 million as down payment for the 10.6 hectares which is an “integrated and indivisible” part of the JV contract.

Fernandez said the city will release the titles after receiving payment of Filinvest.

The real estate developer will directly give their installment to the Land Bank of the Philippines being the escrow agent. The LBP will release the titles to the company.

Aside from the outright purchase of the 10.6 hectares, FLI will also develop a 40- hectare property under a profit sharing agreement.

Las Marias said they wanted to lump the two components to make sure that they can give the city P1.5 billion in three years time because it is one of the conditions of the project.

Filinvest will compensate the 10.6-hectare property of the city by annual installment of about P250 million plus 10 percent of the revenues of the developed areas, according to Joel Mari Yu, Cebu Investment Promotions Center managing director and the negotiator of the development.

But Tinago barangay councilor and opposition leader Joel Garganera questioned the realization of this assurance.

“It is not clear if the city can get P1.5 billion in three years because how can there be a gross sale. Can they construct a building within three years,” Garganera asked in Cebuano.

Fernandez, however, said that the first deal for the SRP is the most integral part of the development of the entire SRP.

“The first deal is very important. It does not matter how much money we are going to make,” he said.

“Despite the international crisis, we are very happy that Filinvest is pursuing this. This is not just legally acceptable, it is also economically wise for the city of Cebu,” Fernandez said.

The first development will spur more developments in the 302-hectare reclamation property.

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LBP sets release of South Road Properties lot titles; CH to meet an obligation in JV

THE Land Bank of the Philippines (LBP) issued last week a certification for the release of the titles covering a 12-hectare area of the mortgaged South Road Properties (SRP) which they will turn over to the Cebu City Government anytime it asks for it.

Titles for another eight hectares could also be released after the City Government pays its P357-million amortization this month, a high-ranking official of the LBP said.
The release of the titles will allow the City to meet one of its obligations in the proposed joint venture contract with Filinvest Land Inc. (FLI) if Acting Mayor Michael Rama is authorized by the City Council to sign the agreement.

As conduit bank for the City’s 12.315-million yen loan with the Japan International Cooperation Agency (Jica), the LBP has the titles of some 240 hectares of reclaimed properties within the 302-hectare SRP.

12 hectares

According to records of the City Treasurer’s Office, as of August 2008 when the last loan payment was made, the City has paid P1.473 billion to Jica for the principal and interest, and is entitled to get titles of a land area equivalent to the payments made, the LBP source said.

“That is why we have already given them a certification that we will release the titles of 12 hectares anytime they need it. When they pay this month, we can give them titles for another eight hectares,” said the source who is privy to the SRP loan transaction and who requested anonymity.



As stated in the proposed Joint Venture contract between FLI and the City, the City is supposed to turn over titles for a 12-hectare portion before they start developing the property.

“Mr. Fernandez asked for the certification before they issued the notice of award to Filinvest but actually, the certification is no longer needed because it’s part of the loan agreement that the City will be entitled to get titles of properties that have been paid for,” the source said.

No turnover

In a phone interview yesterday, City Administrator Francisco Fernandez said he just came back from a leave of absence and has not received a copy of the certification.

He clarified that the City Government will not be turning over titles of any portion of the SRP to FLI unless it pays the City an amount equivalent to the value of the land.

“As a down payment, they will give us some P350 million and for that, we will release the titles of a two-hectare portion. When another payment is made, then we release other titles. We will have to review the contract and make sure that we will give them the titles only after payments are made,” said Fernandez.

The contract also requires FLI to remit payments for the outright purchase of a 10.6-hectare waterfront area directly to LBP. This would be considered as advance payment, the source from the bank said.

FLI is required to pay some P250 million a year for six years for the purchase of the land.

“This means the amount due for the City’s payment of the loan principal and the interest will decrease because the computation of the interest is based on the loan balance, it is diminishing,” said the source.

Since the JBIC and the National Government do not allow any pre-payment of loans by LBP, the latter will have to bear the interest payments to JBIC, as well as the risk of any change in the foreign exchange by the time the loan payments are due. (LCR)

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Special council session set for South Road Properties dev’t pact

By Jully Venus Cuizon, Correspondent


A special session will be held tomorrow by the Cebu City Council to deliberate on the fine print in the joint venture agreement between the city and Filinvest Land Inc. for development of the 50.6 hectares of the South Road Properties (SRP).

This was decided after yesterday’s teleconference between Cebu City Mayor Tomas Osmeña, who is in Houston, Texas for medical treatment, and some councilors concerning the details of the P25 billion joint venture contract with Filinvest.



It was an “informal conversation” with Osmeña who wanted to be updated on the negotiations with Filinvest said acting Mayor Michael Rama.

It was a back-and-forth exchange of “question and answer” as Osmeña sought clarifications on the contract said Councilor Gerardo Carilo.

The Joint Venture Selection Committee (JVSC) is seeking the council's approval to authorize Rama to sign the contract between Filinvest and the city government.

Acting Vice Mayor Hilario Davide said the committee on laws will submit its report and recommendations on the contract to the council.

After Rama signs the contract, the city will receive P338 million from Filinvest as initial payment for the outright purchase of 10.6 hectares of prime reclaimed property in SRP.

Filinvest was virtually guaranteed the contract after Rama denied with finality the motion of appeal filed by the Cebu provincial government challenging the developer's proposal to the city.

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