Garganera sues City Officials over South Road Properties Sale

The Freeman 03/27/2007

Mayor Tomas Osmeña and all elected city officials were sued yesterday before the Regional Trial Court by Tinago barangay captain Joel Garganera who asked that the defendants be prevented from selling and leasing the 295-hectare South Road Properties.

Garganera claimed the SRP is still considered owned by the national government even if President Gloria Arroyo has already issued Proclamation No. 843 on May 16, 2005 transferring the ownership of the reclamation project to the city.

Lawyers Lito Astillero and Noel Adlawan, who spoke on behalf of Garganera, explained that the Proclamation No. 843 issued by Arroyo was considered void in the beginning because she did it without congressional authority.

Garganera said there must be congressional authority empowering the president to transfer ownership of the SRP to the Cebu City government and a congressional authority allowing Cebu City to sell the properties to the public.

Garganera's lawyers cited a Supreme Court ruling in the case of Laurel vs. Garcia that concluded that a law is needed to convey any real property belonging to the government.

Garganera also said the SRP can be sold only to qualified Filipino citizens and never to private corporations or associations, and the area to be sold to any private individuals after a public bidding should not exceed 12 hectares.

While the private corporations are not allowed to buy the SRP, but the law authorizes private corporations or associations to lease a portion of the public property for a period of 25 years and maybe renewed and extended once for the same period.

Aside from Osmeña and the members of the Cebu City Council, the Cebu Investment Promotions Incorporated and the Registry of Deeds were also named defendants in the civil case.

Garganera asked the court to prohibit the City Council from granting any authority to Osmeña to sell or lease the SRP lots.

Osmeña said his lawyers are ready to answer all the arguments of Garganera, whose purpose, the mayor says, is to destroy the city.

"We are doing our best to build Cebu City, they are also doing their best to destroy it," Osmeña told the reporters.

But Garganera, who is identified with the opposition camp of former mayor Alvin Garcia, clarified that he is not anti-Cebu and what he is doing is protecting the city from possible suits by foreign investors in the future.

The reclamation of the South Road Properties was funded by a loan obtained by the government from Japan, through its international financing institution - formerly called Overseas Economic Cooperation Fund now Japan Bank for International Cooperation.

In the loan agreements between the OECF and Land Bank of the Philippines, the City of Cebu was designated as the project implementor. A sub-loan agreement was made between LBP and Cebu City government. - Rene U. Borromeo/BRP

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Tomas offers South Road Properties to Japanese Telecom Officials for investment

The Freeman 03/22/2007

Mayor Tomas Osmeña yesterday announced that he presented the South Road Properties for investment to Kyowa Exeo Corporation, which is deemed as the second largest telecommunications company in Japan.

The mayor said he is trying to market the SRP to telecom providers because the city needs such services.


Officials of Kyowa have been in Cebu for a local project with Innove Telecommunications, and yesterday, they visited the mayor’s office along with an officer of the Cebu Investment and Promotions Center, the marketing arm of SRP.

During the meeting, Osmeña said he took the opportunity to market the SRP to the Kyowa officials by giving them information about Cebu and the SRP.

Osmeña admitted however that Kyowa might be considered relatively "small" over the city’s needs for a company " "that is reliable with an international reputation."

The Japanese visitors told Osmeña that they were fascinated about the new data they learned about Cebu, which initially they thought was only good for its beautiful beaches.

After a meeting, Osmeña instructed the officers of CIPC to accompany the visitors for a tour of the SRP.

So far the companies that have already manifested interest to purchase properties at the SRP are SM Prime Holdings, Robinson’s Land, Filinvest and Bigfoot Global Solutions.

Osmeña said there "are rules to follow" and he could not still decide yet who, among them, the city would sell the SRP but he assured the public that any decision that the city government may come up later would be best for the city.

The city has already signed an agreement with Bigfoot, which plans to buy two hectares at the SRP and put up a studio and soundstage there. Bigfoot even paid the city over US$500 as five-year advance payment.

Osmeña has said several times before that he is "hungry" to sell the SRP because the city must meet its liquidity requirements within the next two to three years.

He added that the city only needs one "big" sale, after which it would be choosy in accepting investors to SRP. "Make a deal now because after that we will be picky," ran the mayor’s message to interested investors.

Osmeña further said the city is making sure that the projects to be put up in the SRP provide income to the city and employment opportunities to the Cebuanos. — Wenna A. Berondo/RAE

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Tomas Sets Guidelines for Sale of South Road Properties Lots

Sun.Star
Monday, March 12, 2007


MAYOR Tomas Osmeña told Cebu City barangay captains last Saturday that he intends for the South Road Properties to “create economic opportunities,” which is why he is not simply selling off the 295-hectare property.

He said he wanted to ensure that those who will buy SRP lots will put up businesses that will generate jobs.

“What are they going to do with it? Will it create jobs, or mosulod ra ang mga kanding diha kay maghulat sila kanus-a mosaka ang presyo?” the mayor said in explaining his parameter against which all offers will be measured.

He said Bigfoot Global Solutions, Filinvest, SM Prime Holdings Inc. and Robinson’s Land of the Gokongweis have all shown interest in the prime property.

He agreed for Bigfoot to lease two hectares for 25 years because owner Michael Gleissner was raring to set up an international studio, which Osmeña said provides an opportunity for local artists and skilled laborers to showcase their talents.

Bigfoot is also interested to buy 16 hectares of the SRP, especially the beachfront area where Gleissner plans to build a yacht club, at P12,000 per square meter or a total of P1.94 billion.

Filinvest also has a standing proposal to develop a portion of the SRP. Ayala Lands Inc. also expressed interest to undertake a development project there.

No monopoly

To make sure that malls and commercial developments will not dominate the SRP, the Cebu Investments Promotions Center (CIPC) has invited private investors to put up two standard factory buildings that can be leased.

CIPC is the marketing arm of the SRP.

Its director, Joel Yu, earlier said that since the mayor is not inclined to sell the entire 295-hectare property to SM Prime Holdings Inc., its representatives are now studying the possibility of purchasing certain portions only.

“I need you to understand because potential customers will also not understand my priorities,” Osmeña told 63 barangay captains gathered in the Association of Barangay Councils assembly last Saturday.

He said that he is selling portions of the SRP just so the City could have enough funds to pay its amortization for the next two to three years.

The SRP was built from a Japanese Government loan amounting to about P6.3 billion.

The mayor said Filinvest owners arrived in the city last Friday to inspect the SRP, as they are interested to buy 50 to 100 hectares. (RHM)

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Spurred by BID of SM: Gokongwei also keen on South Road Properties

By Wenna A. Berondo
The Freeman 03/09/2007

Cebu City's sprawling but controversial South Road Properties are not as dead in the water after all as some would like to believe.

It now appears that no less than two of the country's taipans of industry, with two of the country's biggest conglomerates behind them, are locked in a subtle war to gain control of the 295-hectare property.




Yesterday, Mayor Tomas Osmeña announced that John Gokongwei Jr., founder and chairman of JG Summit Holdings, called him up to express his interest in buying and developing a huge chunk of the property.

" I have good news. Yesterday, I had a phone call from Big J, " Osmeña told reporters, barely able to contain his excitement

He said Gokongwei told him he got interested in the property after reading in the news a few days ago that SM Prime Holdings of Henry Sy is also interested in a major acquisition at SRP.

Aside from other businesses, both Gokongwei and Sy are into retailing, mall operations and property development.

' I read in the newspapers that SM will buy SRP. I want to buy it also. I have money, " Osmeña quoted Gokongwei as saying.

But unlike SM, which reportedly plans to buy the entire property, Gokongwei only wants to buy 78 hectares and is sending a team of technical people to negotiate with the city government on how to work out the purchase.

The mayor did not give additional details concerning his conversation with Gokongwei but expressed excitement over the new development.

A source close to Gokongwei confirmed that the taipan, who built his fortune peddling goods on a bike around Cebu, confirmed the interest to buy into the SRP was real but that details were yet unavailable.

JG Summit is the parent company of a vast empire that includes airline, mall and hotel operations, banking, food manufacturing, telecommunications, petrochemicals, power generation, publishing, real estate and property development, and textiles.

Last week, it was Osmeña who also announced that SM is currently negotiating with the city government to buy the entire SRP and assume the outstanding debt obligations the city incurred in financing the project.

Osmeña said he has not yet decided on whether or not he would accept the proposal of SM for fear it would build a mall at the SRP. The mayor said a mall at SRP would eventually kill small department stores in the city.

In fact, he said, SM proposed two years ago to put up a mall at the SRP but that he turned it down because a mall is " a low low priority " business at the property.

SM is also among the country's biggest conglomerates, occupying a dominant position in most of its lines of business, namely, shopping malls, retail merchandising, banking and finance, and property development.

In the same press conference, the mayor also showed reporters the project plan of Bigfoot Global Solutions which is planning to buy the 16-hectare Pond F of the SRP.

The city government has already signed an agreement with Bigfoot, which plans to build a studio and soundstage in a two-hectare portions of the lot it will buy. In fact, it has already paid the city government over US$500 as a five-year advance payment.

Osmeña admitted to being hungry to sell SRP because the city government is ominously facing a problem on liquidity over the next two to three years.

Earlier, the mayor said the city government only needs one sale and after that it would become more selective in choosing the investors it would allow at the SRP. "Make a deal now because after that we will be picky."

He said the city is also making sure projects put up at the SRP would not only provide income but also employment opportunities for the Cebuanos.

Osmeña admitted the city is currently enjoying a fallback situation but is optimistic that it can sell five to 10 hectares of SRP and pay its debt obligations.

The city government still needs to pay a balance of P6.3 billion from its loan with the Japan Bank for International Cooperation as part of the 12.292 billion yen it borrowed from the bank to build the SRP, payable in 20 years. ( Wenna A. Berondo/JST )

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Gokongwei-led Land Firm Tells Mayor it wants Properties at South Road Properties

Sun.Star
Friday, March 09, 2007


ROBINSON’S Land joined other commercial center developers in showing interest in the South Road Properties (SRP) and has told the mayor it wants to buy lots there.

Cebu City Mayor Tomas Osmeña said he is expecting the company’s technical team to visit the SRP anytime to check what development plans they can undertake in the area.

“Mr. John Gokongwei called me last night and said he read in the papers that SM is planning to buy the SRP. Then he said ‘I want to buy it also’,” the mayor told reporters yesterday.



Bigfoot

Since Osmeña is not inclined to sell the entire 295-hectare facility to SM Prime Holdings Inc., its representatives are now studying the possibility of purchasing certain portions only, said Joel Mari Yu, director of the Cebu Investments Promotions Center (CIPC), the marketing arm of the SRP. Yu said they have not closed their doors to SM but they also cannot sell the whole SRP to only one entity, especially since Bigfoot Global Solutions is already leasing a two-hectare lot there.

Bigfoot also wants to buy the 16-hectare Pond F at P12,000 per square meter or a total of P1.94 billion. Yu said Bigfoot is their priority buyer at this time.

“We’re still talking to SM. They know the mayor is not inclined to give them the entire SRP but they’re still interested so we told them to go back to the original proposal where they can buy as much land as they want, but not the whole area,” Yu told Sun.Star Cebu.

He further said that the SRP will be opened to as many investors as possible, and not just to SM and Bigfoot.

Malls

Filinvest also has a standing proposal to develop a portion of the SRP, and Ayala also expressed interest to undertake a development project there.

To make sure that malls and commercial developments will not dominate the SRP, the CIPC have invited private investors to put up two standard factory buildings that can be leased out in the future.

Yu said the setup will be similar to the factories at the Mactan Export Zones.

In his news conference yesterday, Osmeña showed reporters the design of the movie production complex that Bigfoot will construct on the two-hectare lot beside Pond A.

The complex will have four state-of-the-art soundstages, a hotel with boutiques and a building that will serve as assembly point for props.

Apart from being a new industry in Cebu, Osmeña is prioritizing Bigfoot as an investor because of the jobs it will create and the international market it will attract.

Bigfoot also plans to build an international yacht club for mega-yachts at the Pond F, which will bring in foreign tourists, the mayor added. (LCR)

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Osmeña: South Road Properties Master Plan Designed to be Flexible

By Doris C. Bongcac
Cebu Daily News
Last updated 12:00nn (Mla time) 03/07/2007


The South Road Properties (SRP) does have a master plan, said Cebu City Mayor Tomas Osmeña, but it’s “flexible” to fit the needs of any investor who is opening a business at the 300-hectare reclamation project.

“It always has to be flexible because our customers are developers not individuals. Our master plan can always give them a general idea or concept of what we allow there (in a specific portion of the SRP),” Osmeña said.


“We can't (also) sell the SRP to the Japanese (for funding) without a master plan,” he added.

Osmeña denied accusations by former mayor Alvin Garcia that the city's lack of a master plan is causing the delays in the disposal of parcels of land at the SRP.

Based on the city's master plan, Pond F that is considered as a “prime area” is designated for “high end” developments like Bigfoot's plan to put up a yacht club.

The property can also be used for the establishment of a private school there, the mayor said.

Osmeña said the SRP is so flexible that can be sub-divided into six development areas. The city government can later open access roads in between these properties.

A portion of the SRP located near Pond A was already set aside for Bigfoot's use.

The mayor recently entered into a 25-year lease contract with Bigfoot where the city government is expected to earn a lease of at least $.40 per square meter.

Bigfoot is putting up a sound stage that will be used as sets for international films that will compete with those that are found in Hollywood in a two-hectare property in Pond A.

“Do you know what impact this will bring to Cebu if all the actors like Tom Cruise and James Bond movies are shot here? Patay gyud ang Manila ana,” the mayor said.

Bigfoot’s architects were scheduled to visit the SRP yesterday to assess the area where they plan to put up the their sound stage.

Osmeña said Bigfoot is also interested to buy 16-hectares at the Pond F for P12, 000 per square meter to open a yacht club.

Other investors like Philinvest and SM Prime Holdings are also interested to get a share of the reclamation project.

Both have proposed a joint venture with the city government wherein they will help the city pay off its P6-billion loan for the reclamation project, said Osmeña.

The SRP will be used as the city's equity that will be converted to shares in a corporation that will be created to manage the joint venture.

“It's a good offer but they are not clear as to what they are going to put in there and how soon,” said Osmeña.

Osmeña is apprehensive that SM will take custody of the SRP to prevent any competitor from opening a business there.

He also wanted to wait for the completion of the South Coastal Road tunnel that will further enhance the project's marketability and will lead to an increase in the market value of the reclamation project.

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SM wants takeover of P6.3 Billion Debt- South Road Properties

By Gingging A. Campaña Of Sun.Star Cebu

TOP executives of SM Prime Holdings Inc. yesterday submitted their financial proposal to the marketing arm of the South Road Properties (SRP) on their plan to take full control over the entire 295-hectare facility.

Among other things, SM’s multi-billion-peso offer includes “taking over the full obligation of paying” for the balance of Cebu City Hall’s P6.3-billion loan with the Japan Bank for International Cooperation (JBIC), said Joel Mari Yu, managing director of the Cebu Investment Promotions Center (CIPC).


If the agreement pushes through, City Hall need not wait for 20 years to settle the 12.292 billion yen it borrowed from JBIC to build the SRP.

“Wa na tay utang kon mahinayon na (That deal will wipe out our debt),” Yu told Sun.Star Cebu yesterday.

Yu, who met with top executives of SM yesterday morning at the CIPC office in the Waterfront Cebu City Hotel, was on his way to the office of Mayor Tomas Osmeña to report what transpired when Sun.Star called up.

Yu said that the mayor opted not to be at the meeting as he tasked CIPC to take up technical matters with prospective SRP investors.

“I am just the technical guy. My job is to evaluate and make recommendations to the mayor. It will be the mayor and the City Council that will decide on the proposals. I will report to him what we have discussed and we will discuss our counter-conditions to SM’s proposal. I’m trying to get this moving as fast as possible,” Yu said.

Yu begged off from revealing the details of the offer, as it will be the mayor who will discuss it in public.

He hinted, though, that SM initially offered to enter into a joint venture with the City Government, like the one between the Cebu Provincial Government and the Cebu Property Ventures and Development Corp. (CPVDC).

CPVDC, a subsidiary of Ayala Land Holdings Inc., developed a Province-owned lot into the information technology park now known as the Asia Town IT Park in Barangay Apas, Cebu City.

Yu said that with SM’s plan to develop the entire SRP, the company will have to ask the City Government to abort negotiations with Bigfoot Global Solutions, Inc., who plans to buy the 16-hectare Pond F of the SRP.

Lease

Pond F is the 1.4-kilometer beachfront of the SRP, which Bigfoot wants to develop into a yacht club.

SM, however, reportedly told Yu that they will honor the City’s existing lease agreement with Bigfoot on a two-hectare portion of the SRP, which is now being developed into a studio and soundstage.

Bigfoot will occupy the two-hectare site in the next 25 years at a lease of P5 million a year.

It already paid the City Government over half a million dollars as a five-year advance.

“But since SM wants to buy the SRP altogether, ilang gusto nga apil pod ang Pond F. Lisod man kung wala ang kinanin-dotan nga lugar (They’re also interested in Pond F. They can hardly ignore the best part of the property),” he said.

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