CEBU — Mall developer SM Prime Holdings, Inc. is looking at a 20-hectare lot within the South Road Properties for a planned shopping mall, hotel and two information technology (IT) buildings.
SM Prime President Hans T. Sy said they were in talks with the Cebu City government, which owns the properties, through the latter’s marketing arm, the Cebu Investment Promotions Center (CIPC).
"Negotiations are still going on... We’re still keeping our lines open," Mr. Sy said in an interview during the launch of the north wing of SM City Cebu.
SM Prime originally expressed interest to develop the entire 300-hectare reclaimed property.
But the local government wanted to sell the lots to several entities who will develop large chunks of the property into industrial, commercial, tourism-oriented and mixed-use blocks.
So far, Cebu City has received an unsolicited proposal from Filinvest Land, Inc. to develop about 50 hectares of the South Road Properties.
"What we wanted before was not okay. But it’s fine because we have this crisis now, although we’re not affected by the crisis," Mr. Sy said.
"We are very much on track and we are still continuing with our expansion program," he added.
He said SM would build a mall on the 20-hectare lot. The company plans to introduce a mixed-use development in the area.
"Definitely, [we will build] a mall and we’re looking at other developments. We’re always open for possibilities," he added.
CIPC Managing Director Joel Mari S. Yu said SM Prime officials had told him that the company would immediately build a mall, a hotel and two IT towers as soon it buys the lot.
"That mall will be the second biggest in the Philippines, next to the Mall of Asia. I asked them where this confidence is coming from and they assured me that they know what they’re doing," he said.
If things go as planned, SM Prime might submit its unsolicited proposal to the city government in the first quarter of 2009, he said.
The city government’s joint venture selection committee, created to evaluate unsolicited proposals to develop the South Road Properties, is now evaluating the Filinvest proposal.
Filinvest wants to buy a 13-hectare lot for about P2 billion and jointly develop it with the local government into a mixed-use commercial center that will include recreational facilities, residential condominium and IT buildings.
Mr. Yu said they hoped a bidding would be held before the end of the year to accommodate other developers who might offer a better deal.
The sale and development of the South Road Properties will allow the Cebu City to pay amortization and interest for a P5-billion loan from the Japan Bank for International Cooperation.
It obtained the loan to reclaim the property, which has since been registered as a special economic zone with the Philippine Economic Zone Authority.
Sunday, October 26, 2008
The Cebu City’s joint venture committee that studies the multi-billion proposal of Filinvest Land Inc. to purchase and develop a portion of the South Road Properties is scheduled to convene on Tuesday, a day after the proponent submits its complete business proposal on Monday.
Cebu City administrator Francisco Fernandez, who heads the committee, said the formal negotiation on the proposal will begin on Tuesday and they expect it done within 10 days.
The committee is tasked to evaluate the proposal of Filinvest and make a recommendation for approval of the mayor and the City Council.
Filinvest, one of the largest real estate companies in the Philippines, is offering an outright purchase of the 10-hectare hectare portion of the SRP worth P2 billion.
Aside from this, Filinvest also offers a joint venture with the city government to develop 50 hectares out of the 300-hectare property.
So far, Fernandez said that there has been no “feelers” or other developers expressing their intent to compete with Filinvest’s offer.
Once the committee’s recommendation is approved by the City Council and the mayor, it will be published in a newspaper of general circulation to give other developers a “competitive challenge.”
The publication of their approved recommendation is to give other developers the chance to challenge the offer of Filinvest and see if they could give a better deal than what is offered by the Filinvest, should there be any.
After publication, any developer has 30 days to challenge Filinvest’s proposal.
If the challenger offers a better deal, the committee will evaluate as to whether it has the capacity to compete or the capability to invest money and develop the proposed project.
The committee will also see to it that the bid of the challenger is more favorable for the city as compared to the offer of Filinvest.
Fernandez is optimistic that they will be able to close the deal with Filinvest before the end of the year.
Just recently, the National Power Corporation expressed its intention to purchase a 3,000 square meter lot at the SRP to use it for its new regional office. —Mitchelle L. Palaubsanon/WAB
Sun.Star Cebu
Tuesday, October 21, 2008
UNSUCCESSFUL with its planned takeover of the South Road Properties (SRP) last year, SM Prime Holdings Inc. now wants to buy a 20-hectare lot for a mix-use development project.
Aside from a hotel and a mall, SM also wants to build two information technology (IT) towers immediately, said Joel Mari Yu, managing director of the Cebu Investment and Promotion Center (CIPC).
Yu said that SM is negotiating for a combination of a lease and an outright purchase of interior lots and some portions along the South Coastal Road.
While they are inclined to enter into a sale and lease agreement, CIPC is not discounting the possibility of a joint venture, he said. CIPC is the marketing arm of the SRP.
“There is a formal offer already from SM and we are making a counter offer. I’m listening to their proposals and, so far, it’s going to be advantageous to the City.
Everything is still under negotiation but Mayor Tommy Osmeña told me to process it already,” he said in a phone interview last night.
Second biggest mall
If their plans push through, SM will build in the SRP the second biggest mall of the company in the country or next to the Mall of Asia in Manila.
At City Hall yesterday, the Joint Venture Selection Committee (JVSC) turned over to Acting Mayor Michael Rama its recommendation to accept, in principle, Filinvest Land Inc.’s (FLI) proposal for further negotiations.
Rama said he will decide on the matter after reading all the details of the unsolicited proposal and the committee’s recommendations.
“Offhand, it was something very attractive but I will have to look at other documents first before I will decide whether I will accept or reject it,” he told reporters.
FLI is proposing to buy 10 hectares of land and to develop 40 hectares under a joint venture agreement with the City. It plans to put up several condominiums, office buildings, a medical and retirement facility in the SRP.
As for SM’s proposal, Yu said that the mall developer had originally planned to buy a 50-hectare portion but found the price too high.
Its officials asked the City to reduce the price but Yu said they cannot do so because the minimum floor price for the three classifications of lots are fixed and was already approved by the Commission on Audit (COA).
In March last year, top executives of SM Prime Holdings Inc. submitted a financial proposal to CIPC on their plan to take full control over the entire 295-hectare facility.
SM’s multi-billion-peso offer included “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 that was used for the reclamation project. (LCR)
Monday, October 20, 2008
By Linette C. Ramos
Sun.Star Staff Reporter
AT the corner of one of the access roads in Cebu City’s South Road Properties (SRP) is a sign that welcomes visitors to the Hollywood of Asia.
But with the garbage dumpsite visible from the Bigfoot Entertainment complex and the overwhelming stench reaching its premises, it’s in stark contrast to the Hollywood in Los Angeles, California.
City officials are aware of the problem and have started to act on it, SRP Management Office head Nagiel Bañacia said.
This week, City Hall will make an emergency purchase of filling materials and aggregates that will be used to cover the garbage dumped in the Inayawan sanitary landfill, to eliminate the odor.
Tree-planting activities have also been initiated around the dump site to cover the mountains of garbage that accumulated there.
Worse when it rains
Bañacia admits the garbage facility is one of the negative factors affecting the marketability of the 302-hectare SRP.
Rodel Mancao, a security guard at the Bigfoot Entertainment complex, said they have gotten used to the stench, which worsens during heavy rains.
“Basta muuwan na gani, unya dad-on sa habagat diri ang baho, hastang baho-a gyud lagi. Sa kadugayan naanad na man lang mi, ambot lang kaha sa mga tag-iya diri na mga foreigner pero siguro ko nakabantay na sad na sila (When it rains and the winds carry the smell here, it really stinks. We are getting used to it, but I don’t know about the owners),” he told Sun.Star Cebu.
The Bigfoot complex is separated from the landfill by the General Services Office (GSO) maintenance compound. A wire fence separates the landfill from the GSO.
Bigfoot president and chief executive officer Michael Gleissner has so far paid P25 million for a 25-year lease agreement on a two-hectare lot there.
A barangay intelligence network (BIN) guard on duty at the GSO said they are lucky if the garbage is topped with aggregates, which does not happen every day these days because of a shortage in filling materials.
“Usahay matabunan, so mawala ra ang baho pero sunod adlaw mubaho na sad. Anad na mi anang bahoa diri, mura na lang ug wala, dili lang mi muangal pero ang mga mamalitay diri, mureklamo gyud sa kabaho (Sometimes they cover the garbage and on those days, it’s not so bad, but the next day, the stench returns. We no longer complain, but I’m sure the prospective buyers will),” Gaudencio Manresa said.
His colleague at the Sugbu Building in Kawit Island said the stench reaches the SRP administrative building, several kilometers away from the Bigfoot property beside Pond A.
Bañacia said that Bigfoot officials earlier raised the problem, and the City has since acted on it.
Once completed, the Bigfoot Entertainment property will have four 1,200-square meter soundstages like those in Hollywood in Los Angeles, production offices, Hollywood suites, a crafts and sets shop and a fabrication building.
It is also planning to purchase 16 hectares of land for their expansion projects, which will include an executive hotel, administration offices, specialty restaurants and cafe, a spa, swimming pool, nature park and a mini-zoo.
City Administrator Francisco Fernandez admitted that interested buyers of SRP lots have raised concern on the proximity of the landfill to the properties they want to buy.
“We’re getting complaints about it, we already got a complaint from Bigfoot and we don’t intend to hide it. The landfill is there and they’ve seen it but we assured them that we intend to eliminate the smell,” he said.
The problem on the stench had Mayor-on-leave Tomas Osmeña worrying over it even while he was in the hospital just hours before his surgery.
“That was his concern before and after his operation, so definitely we will address the issue. The heavy rains damaged the internal roads, that is why we couldn’t transport the soil cover to the area. But we will solve that this week,” Fernandez said yesterday.
He admitted, though, that these are only short-term solutions.
The City intends to get a private firm to manage the landfill, which will include measures to eliminate the stench.
Fernandez said they are now talking to three private firms, including those that are managing the dump sites in Payatas and Montalban in Metro Manila.
The long-term solution would be the proposed transfer of the landfill to Barangay Kalunasan, which is still being evaluated by City Hall and barangay officials, he added.
Friday, October 17, 2008
By Linette C. Ramos
Sun.Star Staff Reporter
ON the request of Filinvest Land Inc. (FLI), members of the Cebu City Government’s Joint Venture Selection Committee (JV-SC) will sign a confidentiality agreement to keep negotiations under wraps.
The nine-member JVSC formally received yesterday the detailed unsolicited proposal of FLI to develop a 50-hectare portion of the South Road Properties (SRP).
In a closed-door meeting with the committee members, City Administrator Francisco Fernandez said FLI officials asked them to sign a confidentiality agreement while they negotiate on the terms of the sale and the joint venture (JV).
Agreement
The members of the committee will sign the agreement during their first formal meeting on Saturday.
While they pledged to be transparent on all transactions involving the SRP, Fernandez said they find FLI’s request to be reasonable, since they also need to protect their proposal.
The confidentiality agreement covers all negotiations that will be made until the unsolicited proposal is approved for publication for bidding.
Fernandez, the chairman of the JVSC, said details of the agreement will be divulged to the public once it is approved for publication, which is also the time when FLI will pay the City P300 million in surety bond.
“During the negotiations, everything will have to remain confidential, including the terms and conditions of the agreement, the design and cost of their project, the share of the City in the joint venture, and their market. That’s what the confidentiality agreement covers. If we reject their offer, the details remain confidential,” Fernandez told Sun. Star Cebu.
If there are no challengers to the FLI proposal, the JVSC expects to award the contract to FLI by Dec. 15, 2008.
FLI and Mayor-on-leave Tomas Osmeña already divulged some general information on their plans during the ceremonial turnover of the executive summary of the firm’s
unsolicited proposal during a press conference at the Casino Español de Cebu last month.
But in the meeting and negotiations with the JVSC, FLI will be submitting documents containing the details and specifications of their project, which they intend to keep confidential.
Open
“But once it is published, I assure you that everything will be open to the public. I think their request is reasonable because their only concern is that if this is divulged while the negotiations are ongoing, other challengers might copy their proposal and designs, and it’s very bad business ethics if we reveal it,” Fernandez explained.
Earlier, FLI announced that their unsolicited proposal includes an outright purchase of a 10-hectare lot amounting to P2 billion and the development of 40 hectares under a JV agreement with the City.
Some P80 billion will be invested by FLI to put up several high-rise and medium-rise condominiums, a commercial center, a medical and retirement facility and office buildings in the SRP.
From the JVSC, the unsolicited proposal will be presented to the mayor for preliminary acceptance or rejection.
Documents
If the proposal is accepted in principle, formal negotiations between the JVSC and FLI will start once the latter submits all the documents, including their engineering designs.
“After Saturday, we can already make a recommendation to the mayor to accept the proposal in principle or to reject it. If he accepts, we are given 10 days to finish the negotiations and after that, we go back to him to present our agreement. If he finds it acceptable, then we will publish it for the Swiss challenge,” Fernandez said.
The proposal will be published twice. After the second publication, challengers will be given 30 days to submit their proposals.
Fernandez said that if there are no challengers in the bidding, a contract with FLI will be submitted to the City Council for approval and if approved, the mayor will sign the contract with FLI.
Other voting members of the JVSC are the city attorney, former city administrator Juan Saul Montecillo and the city treasurer.
A representative of the Commission on Audit, the Department of Interior and Local Government, the Philippine Institute of Certified Public Accountants and the Chamber of Real Estate and Builders Associations Inc. also sit in the committee as non-voting members and observers.
The Freeman
Friday, October 17, 2008
With two proposals worth close to P3 billion already on the line, the City of Cebu is now ready to tackle the offer of SM Properties to buy 50 hectares of the South Road Properties.
Joel Mari Yu, managing director of the Cebu Investment Promotions Center (CIPC), which is the marketing arm of the SRP, said that although the offer sounds very good, the matter of pricing will have to be addressed.
Yu said that SM plans to use half of the property it is planning to buy to build into a two-storey mall while the remaining 25 hectares will be for future expansion.
While a mall at the SRP would really help boost the area, the offer of SM Properties is not high enough to meet the authorized selling price set by the Commission on Audit.
More so, Yu said that if the city accepts SM’s offer, this will not be fair to Filinvest land Inc. and the consortium of Rockwealth Venture Development Inc. and Pueblo de Oro Development Corporation.
Filinvest Land offers to buy 10 hectares of the SRP for P2 billion and has a proposal for a joint development with the city of another 40 hectares.
The Rockwealth and Pueblo de Oro is proposing to buy 10 hectares at P900 million to built a medical tourism facility.
COA has mandated that the lots at SRP be sold at P8,000, P11,000 and P15,000 per square meter depending on the location.
Yu said that the mall at SRP is a very strategic investment that would enhance the value of the entire property, but he said the city government cannot sell the lot below than what is authorized by COA.
“SM is a prime client. Pero dili mi makabaligya ug presyo ubos pa sa ge-authorize sa COA. We even suggested that they should be the one to write COA on this matter,” Yu said.
The proposed medical tourism facility will be bid out next week while the proposal of Filinvest is still being evaluated before any recommendation can be made.
Once that recommendation is made, it will have to be approved by the members of the city council and the mayor before this will be published in newspaper of general circulation for a competitive challenge or competitive bidding.—Mitchelle L. Palaubsanon/NLQ
Sun Star Online
Wednesday, October 15, 2008
CEBU City Hall is preparing to hold an open bidding for a 10-hectare portion of the South Road Properties (SRP) possibly next week, after a buyer presented an offer to buy a lot for a medical tourism facility.
Cebu Investment and Promotion Center (CIPC) managing director Joel Mari Yu said the Manila-based developer intends to put up a big and high-end hospital that will cater to foreigners, tourists and expatriates.
The 10-hectare lot will earn for the City at least P900 million, with a minimum floor price of P11,000 per square meter for the lots beside the road and P8,000 per square meter for the interior portion.
Yu said that one-third of the property, worth P370 million, is beside the road and the remaining two-thirds, worth some P540 million, are interior lots.
“The buyer wants to purchase 10 hectares of land right away for a high-end medical tourism facility. So we will just declare it for sale then put it up for open bidding, meaning it’s an outright sale and anyone who is interested can bid,” he told Sun.Star Cebu.
The winning bidder, though, will have to follow certain restrictions on what they can use the property for.
Yu said the restrictions will be included in the bid of restrictions, which will be part of the bidding documents, and will specify what the buyer can and cannot do with the lot.
“We are currently surveying the property and we expect to finish the survey at the end of the week. If the city administrator can get all the documents together, we can publish the bidding announcement next week,” he continued.
City Administrator Francisco Fernandez said the details of the bidding and the sale will be discussed during a press conference today.
Yu of CIPC, the marketing arm of the SRP, said the survey being conducted will delineate the property and set the boundaries of the 10-hectare portion, which is near the 50-hectare property that Filinvest Land Inc. wants to develop.
The CIPC and Mayor-on-leave Tomas Osmeña have been negotiating with the buyer for a year already.
If the interested buyer wins in the bidding and constructs the hospital, Yu said that no other developer will be allowed to put up a similar facility.
“We made sure that the developers will complement and not compete with each other...In the bid of restrictions, we will make it very clear that only certain activities will be allowed in the area. No motels and used car dealership will be allowed, and they can’t subdivide and resell the lots,” he added. (LCR)
AS long as the proposal of Filinvest Land Inc. (FLI) is above board and good for Cebu City, City Hall won’t have to worry about any “economic sabotage” by former Sen. John Henry “Sonny” Osmeña and Tinago Barangay Councilor Joel Garganera.
Sonny assured his cousin, Mayor-on-leave Tomas Osmeña, that he wants the FLI project to push through and “for the SRP to finally make money,” saying the people have already paid a high price for it and basic services have suffered because of the project.
He does not intend to file any case to stop any transaction at the SRP, Sonny said yesterday.
Vigilant
Garganera, who earlier filed a case against City officials over the SRP, urged fellow Cebu City residents to be vigilant and to monitor developments in the FLI proposal and other transactions related to the sale of SRP lots.
He also asked officials of the City Government and the Cebu Investments and Promotion Center (CIPC), the marketing arm of the SRP, to be transparent on the deals they will enter into.
“It’s not only incumbent upon me to look into the details of the proposals just because I’m the one who filed the case. The rest of the Cebuanos should also be vigilant in monitoring the details of the deal. As long as dili ta mabintahaan and it’s good for the City, I will support it, I will not do anything against it,” Garganera told Sun.Star Cebu yesterday.
Before leaving for the United States last Wednesday to seek medical treatment, Mayor Osmeña gave critics of the SRP a stern warning that he will fight back using every tool the City has if anyone sabotages FLI’s proposal.
FLI plans to invest P80 billion in developing 50 hectares of the 302-hectare SRP.
It plans to buy some 10 hectares for P2 billion at P12,500 per square meter, and enter into a joint venture with the City to develop 40 hectares into a mixed-use project, which will include high-rise buildings, medical and retirement facilities and medium-rise residential condominiums.
Details
“We’re happy that at least, finally, there’s someone interested to buy. We don’t know all the details of the Filinvest proposal, that’s why everyone should monitor it. Karon, support lang ta. And for the city officials, the least that they can do is to be transparent about everything to the media and the public,” Garganera said.
In March last year, Garganera asked the court to stop Tomas, the City Council, CIPC and the Register of Deeds from marketing, selling, disposing of or leasing the SRP, saying it will be illegal to do so because the City’s ownership of the SRP has no congressional authority.
Regional Trial Court Judge Soliver Peras denied the application for a temporary restraining order last May 22, 2007 and dismissed Garganera’s complaint last Dec. 11. The case is now on appeal.
Last Wednesday, Tomas reminded reporters of the lawsuit and other legal actions that were filed against them in relation to the South Coastal Road and the SRP and the delays it caused in the sale of the lots, including those caused by Sonny.
“I assure Tommy that I never had any intention, nor will have any intention to file any suit to stop whatever project he has at the SRP. I have stayed quiet these past two years even as he claimed that investors were lining up outside and elbowing their way into the SRP,” Sonny’s statement read.
While there may be some legal questions that have to be settled, Tomas and the prospective investors should welcome them, Sonny said.
“The people of the City are paying a very high price for the SRP. Barangays are forced to use their own funds to collect garbage, a responsibility normally assumed by the City... The City’s internal revenue allotment, designed and intended for agriculture, health and social services, are now being diverted to service the SRP debt,” Sonny said.
He lamented that health care for the constituents has been sacrificed and that the mayor even wants to sell the Cebu City Medical Center.
Wednesday, October 08, 2008
TWO major developers have informed Cebu City officials of their plan to present an offer to buy lots at the South Road Properties (SRP), but they will have to wait until the first sale is finalized.
Mayor-on-leave Tomas Osmeña said yesterday that the City will have to close a deal with the Filinvest Land Inc. (FLI) first or any other developer that will match its offer, before they entertain other buyers.
Acting Mayor Michael Rama, the City Council and the Joint Venture Selection Committee (JV-SC) for the SRP will go ahead with the sale even without Osmeña.
Osmeña went to Manila last Monday supposedly to inform the Commission on Audit (COA) of his one-month sick leave and that SRP lots might be sold while he is seeking treatment in the United States.
But he said that COA officials were in a meeting in Malacañang. That is why he designated Rep. Raul del Mar (Cebu City, north district) to discuss the matter with COA.
He also met with FLI officials to inform them of his departure.
Proposal
City Administrator Francisco Fernandez, chairman of the JV-SC, said that no one has expressed interest to challenge the unsolicited proposal of FLI yet, which intends to buy 10 hectares of land and develop 40 hectares under a joint venture with the City.
“There are no interested challengers for the Filinvest offer so far, but there are two other developers who have already sent feelers and want to know if they send their proposals, will these be acceptable to the City,” he said.
The interested parties want to buy other portions of the 302-hectare SRP, but have not specified the areas and the lot sizes.
“That’s what we were discussing with them and we agreed that it is best to close one deal before we talk to the others so as not to create a confusing situation,” Osmeña told reporters yesterday.
“This transaction is actually very simple but because of its magnitude and with billions of pesos involved, we have to be careful,” he said.
The mayor will leave for the US at noon today to seek treatment for the tumor in his urinary bladder.
He has filed a one-month sick leave, but could come home earlier or much later, depending on the results of his medical exams.
SRP Management Office head Nagiel Bañacia said that of the 302 hectares, only 200 hectares will be sold since the 60-hectare Pond A has yet to be filled up.
The roads within the SRP and the Kawit Island make up the remaining portion that the City will not dispose of. (LCR)
Saturday, October 4, 2008
Cebu City Mayor Tomas Osmeña is optimistic that the city government can close substantial deals with two more investors within the year for the South Road Properties.
While he refused to name these investors, the mayor claimed they are among the top ten largest real estate developers in the country.
“Aside from Filinvest, I am expecting to make two more deals within the year. But as to when are we going to be paid, I don’t know. You know the government’s bureaucratic red tape,” Osmeña said in a news conference yesterday.
Osmeña’s statement was confirmed by Joel Mari Yu, managing director of Cebu Investment and Promotion Center, the SRP’s marketing arm.
Yu said one investor proposed to develop a medical-tourism business while the other plans to develop an entertainment center, a shopping mall, condominiums, and an information technology center.
“Yes, that’s true. But as of now, I am not at the liberty to divulge the names of these companies. It is for the mayor to say it,” Yu said in a separate interview with The FREEMAN.
Osmeña earlier explained that as much as he wanted to be transparent about the negotiations on the sale of the SRP, he could not reveal the details because it might create a misunderstanding because the investors had asked him not to talk about it.
Recently, the Filinvest Land Inc., one of the largest real estate companies in the Philippines, submitted its proposal to the city for the “outright purchase” of 10-hectare lot worth P2 billion and another joint venture agreement of the remaining 40 hectare of lot which will house high-rise buildings and condominiums. The offer got a positive response from the mayor and the city officials.
Osmeña said that as of now, no investor has tried to compete with FLI’s offer.
Aside from the two other prospective investors that the city hopes to close deal with within this year, he said the city has also received offers from other buyers who eye different portions of the 295-hectare property. — Mitchelle L. Palaubsanon/WAB
Saturday, October 04, 2008
CEBU City Mayor Tomas Osmeña will allow Filinvest Land Inc. (FLI) to collect a minimal project development cost refund if the contract for its unsolicited proposal is awarded to another developer.
But Osmeña is almost sure there will be no need for a project development cost refund because FLI is bent on matching any higher offer by a challenger when their proposal goes through a bidding, specifically the Swiss challenge.
Osmeña expects to close a deal within the year, but is non-committal on when the City will be paid, since this depends on bureaucratic procedures, he said.
In the bidding, the City Government’s 10-percent share in the joint venture (JV) is expected to be the most contentious provision of the proposal.
Other developers will have a chance to compete with FLI’s offer and propose to give the City a bigger share in the JV, which the developer can match.
As of yesterday, the City has not received any feelers from developers of their intent to join the bidding.
Development
“If there is any refund to be collected from the winning bidder, it will be very minimal. It will not be hundreds of millions. It’s only fair because if you accept the designs of a proposed development, I think there should be some compensation to the proponent,” he told reporters yesterday.
“It will be nothing if you compare it to the P80 billion they will be investing... If you want me to make a wild guess, it will be less than P5 million... but Filinvest is intent on matching any better challenge,” he said, when asked what amount will be acceptable.
In 2006, Osmeña opposed the Ayala consortium’s unsolicited proposal on the Carmen Bulk Water Supply because of the project development cost refund provision in the terms of reference for the Swiss challenge.
He had said that the project development cost refund cannot be justified in an unsolicited proposal because “they were not asked to make the proposal.”
In his news conference yesterday, Osmeña said he is expecting to close one or two more transactions before the year ends.
“We expect closing two additional transactions aside from Filinvest within the year. When we say within the year, it means we will make a deal, but when we will get paid depends on the bureaucratic red tape,” he said.
Developers who want to challenge FLI’s offer will be pre-qualified to make sure that only real estate developers of the same stature as FLI can challenge the proposal.
FLI has formally presented its offer to buy a 10-hectare portion of the SRP amounting to P2 billion, and develop 40 hectares under a JV agreement with the City.
The real estate giant offered the City a 10-percent share of their annual gross sales if the JV pushes through.
“The share of the City is essentially the point of the bidding. We’re also going to be looking at the track record of the bidders, and they must be able to demonstrate that they are capable of engaging in this project,” the mayor said.
If their pre-qualification standards will be followed, Osmeña said there will only be around 10 developers in the country that can participate in the bidding. (LCR)
CEBU — The Cebu City government is planning to implement at least two projects as soon as it starts generating additional revenues from the sale and development of the South Road Properties, a 300-hectare reclaimed area that is envisioned to be a mixed-use complex.
One of the projects is the proposed 5.6-kilometer highway that will connect the reclaimed area to the villages of Pardo and Toong, where a proposed "urban poor city" is being planned.
City administrator Francisco Fernandez said the city government might be able to secure a grant from the Asian Development Bank, whose representatives visited the proposed site last Friday. The ADB is looking at providing a grant for the opening of the road from the South Road Properties to the proposed housing site.
Filinvest Land, Inc. formally submitted last week its unsolicited proposal to purchase a 13-hectare lot for about P2 billion and develop a 35-hectare lot in a joint venture with the city government.
The South Road Properties is a 300-hectare development that was reclaimed by the Cebu City government using a 12-billion-yen grant from the Japan Bank of International Cooperation. — GRMT
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which is which? 10 hectares for 2 billion and 40 hectares for joint venture with the city OR 13 hectares for 2 billion and 35 hectares for joint venture?
by the way, this article is from businessworld..
Wednesday, October 1, 2008
Cebu City Mayor Tomas Osmeña said yesterday that will not allow the creation of an authority to manage the multi-billion South Road Properties.
“It can become a monster. SRP is owned by the city, it should be controlled by the city. Even if I will be chosen to head that authority, no way. It should never be,” he said in a press conference yesterday.
Osmeña said that he is now asking the people of Cebu to support his plan in making SRP a big plus for Cebu.
“SRP is not going back to the sea. Since it’s already there, we have to maximize what we have. Profit is not the main consideration but economic development. No matter what, SRP is always a big plus for Cebu,” the mayor said.
The mayor even said if a prestigious organization like the United Nations or the Japanese Embassy would like to put up a building at SRP, he can give a portion of the lot for free.
“Why not? Can you imagine, the United Nation having its building at SRP. That would make Cebu prestigious. We should not have a stagnant mind and bureaucrats are like that,” the mayor said.
But as of now, Osmeña said that the main priority of the city once SRP sales are made is to pay its loan.
Osmeña said that the city will be paying P700 million this year as payment of its SRP loan.
The mayor admitted that it has been hard paying for the loan but the city has survived although some of the services were sacrificed in the name of development.
Among the benefits they had to hold off to pay the loan was the P2,000 promised to 28,000 senior citizens in the city per month.
But the mayor said that starting next year this will already be implemented provided that the senior citizens are registered voters of the city.
The city government is currently negotiating with Filinvest Land Inc. for a possible joint venture. The latter is proposing to develop at least 50 hectares at the SRP. – Mitchelle L. Palaubsanon/BRP
By Chris Ligan
Cebu Daily News
First Posted 15:25:00 09/30/2008
CEBU CITY, Philippines - Cebu City Mayor Tomas Osmena on Monday assured that the joint-venture agreement it may enter into with Filinvest Development Corp. over the South Road Properties (SRP) would be advantageous to the city.
Osmena said that whether Filinvest sells or rents out property that it develops in the SRP, the city gets a share of revenues.
Under the joint venture agreement, for any property that Filinvest sells in the SRP, the city gets a fraction of gross sales based on the phase of Filinvest's development. For phase 1, the city gets a 20-percent share. The share increases to 30 percent in phase 2, 40 percent in phase 3, and 50 percent in phase 4.
For properties that Filinvest rents out, the city will get a fixed 10-percent share of rental fees.
Osmena said that under Filinvest's P80-billion development plan, the company will develop at least 40 hectares of land at the SRP. The land is the city government's counterpart in the joint-venture agreement with Filinvest, while the company puts up residential condominiums, commercial complexes and office buildings, among others.
In addition, Filinvest will also buy additional properties in the SRP worth at P2 billion, amounting to 10 to 12 hectares, depending on the area's location. Seaside lots cost P11,000 per square meter, while inner lots cost P8,000 per square meter.
The mayor said he expected the economic development at the SRP to increase once Filinvest completes its P80-billion project. The mayor said this would increase employment in the city.
VIP treatment
The mayor said he envisions the SRP to be the “second home” of the country's wealthy.
He said he would make it easy for the rich to live in the reclaimed land, like putting up a transport system that would make it unnecessary for those living at the SRP to buy cars or hire drivers.
Occupants of the SRP would also have an easier time going to key areas of the metropolis, such as the airport.
Osmena said he would put up a bus service that would provide easy transport between the SRP and the Mactan Cebu International Airport. This bus service will be given priority on city streets and provided with police escorts that would allow them to bypass heavy traffic.
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