City in ‘most critical stage’ of South Road Properties lot talks

Sun.Star
Tuesday, December 04, 2007

NEGOTIATIONS for the sale of three lots at the South Road Properties (SRP) have reached its “most critical” stage, but Cebu City Mayor Tomas Osmeña remains tight-lipped about it.

Osmeña said they are now discussing the price of the lots with three big investors and he is optimistic they will be able to finalize the sale before the year ends.

If all goes well, the City may even close the three deals at the same time, he said.

“We’re getting into the stage of pricing the lots that is why it’s very sensitive. It’s supposed to be done this year. I’d rather not say anything about it because it can create a misunderstanding. This is a very critical point,” he told reporters yesterday.

The mayor assured Cebuanos, though, that he will give the details of the sale once everything is finalized.

Request

In a news conference, he said he gave in to requests of the investors not to divulge their names and details of the transaction at this point so as not to jeopardize what would be the City’s first sale at the multi-billion peso SRP.

The investors, considered as the biggest names in the commercial development business, will put up mix-use development projects that will have commercial, residential and tourism components.

“The customer is always right so if a little confidentiality is what they’re asking for, then we’ll give them consideration... We can’t survive without customers.

But I assure the public we will be more transparent once it is finalized,” said the mayor.

Price range

Joel Mari Yu, director of the Cebu Investments Promotion Center (CIPC), the marketing arm of the SRP, said they are currently at the height of negotiations on the maximum floor price for lots within the 290-hectare facility.

At this point, he said, the price being discussed ranges from P10,000 to P15,000 per square meter.

Like the mayor, he is hopeful they can finalize the sale before the year ends but if it does not happen in the next three weeks the City will surely make a sale by the first quarter next year.

What has been agreed on with the buyer so far are the amount of space each investor will buy, their business proposal and the timetable of the project implementation.

“The City has agreed on all three, on the size of the lot, what they want to do in the area and when they will start and finish. Once the floor price is established as valid, we will bid it out and the price can go higher than P15,000 depending on the winning bid,” he told Sun.Star Cebu.

On the negotiation table, Yu said they will be pricing the SRP lots according to zones and three maximum floor price, with the Pond F area getting the highest price tag.

The Pond F is on the waterfront where an artificial white sand beach, swimming pool and a boardwalk are being constructed.

Pond F will command the highest price followed by properties fronting the South Coastal Road and the Mambaling access road. All other areas of the SRP will be ranked third in the pricing.

“So the price will really depend on what area you are bidding on. Even if it’s a prime space but it’s outside Pond F, it will not command the same price as Pond F,” Yu explained.

Last week, Osmeña said the sale will be of a magnitude that will relieve the City of its loan obligations on the SRP.

The first sale will also allow the City to provide new social services by next year, including cash gifts for all senior citizens in the city, which the City will give on their birthdays and on Christmas.

Twelve years after the City made the 12.292-billion yen loan (P5.958 billion as of August 2006) to fund the SRP, it has only earned P25 million from the project, which represents Bigfoot Global Solutions Inc.’s 25-year lease payment for a two- hectare lot. (LCR)

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Additional budget pays for baywalk ( South Road Properties), rice

By Doris C. Bongcac
Cebu Daily News
Last updated 09:06am (Mla time) 12/01/2007

Funds for a new baywalk at the South Road Properties (SRP) and Christmas bonuses in the form of sacks of rice were among the items that got the biggest chunk in another supplemental budget proposed by Cebu City Mayor Tomas Osmeña.

The latest supplemental budget, worth P27 million, is the sixth that the mayor submitted for approval to the city council.

If this proposed budget is approved, all supplemental budgets so far will have totaled P523.37 million.

This is in addition to the city’s annual budget of P2 billion.

Osmeña said that Supplemental Budget No. 6 would use unappropriated funds from the city’s share of the Internal Revenue Allotment (IRA), excesses from the 2006 budget, and realigned surplus from the 2004 Local Development Fund.

In the city council’s Nov. 28 session, the mayor’s proposal was submitted to the committee on budget and finance. A budget hearing has been set for Dec. 11.

Allocations for the new proposed budget include P7 million for the development of a 1.2-kilometer stretch of beachfront property along the SRP into a commercial strip, P6 million for rice for barangay officials and employees that will serve as their Christmas bonuses, and P3 million for the renovation of Carbon Market’s unit 3.

Another P3 million was allocated for new furniture and equipment for some City Hall offices while P1.3 million was allocated for the purchase and installation of electric posts at the newly renovated legislative building.

The mayor also wanted to set aside P1.2 million for city-sponsored activities, P1.1 million for maintenance and other operating expenses, and P700,000 for subsidies to the Kapwa Ko, Mahal Ko Foundation and the Cebu Arts Council.

City Administrator Francisco Fernandez said renovation of Carbon Market’s unit 3 is a priority due to the condition of the market’s roofing over the fish section and the general condition of the building’s second floor.

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Tom to add ‘cute’ features on South Road Properties welcome signage

Saturday, December 1, 2007

Mayor Tomas Osmeña has boasted that the welcome signage erected at the South Road Properties will become a model of strength for billboards and signages in the city, and a landmark that would become a tourist attraction.

The mayor disclosed the other day that he has planned “something cute” for the welcome sign at a hill of the 295-hectare SRP.

The signage, built at a cost of at least P6 million, is already almost complete, Osmeña said as he mentioned that the “cute” addendum to the structure would be statues of children climbing and playing to portray the SRP as one dedicated to the children who are the city’s future.

Osmeña said that at least four to five statues of children would be placed on the signage, or “enough to be noticed”, and they would be made to appear playing like climbing the steel bars, sitting and waving to passers-by.

Some modification on the signage would be done to accomplish this added design, said the mayor.

The welcome signage, a three-storey high structure made of aluminum pipes, would have the title “South Road Properties” spelled out similar to the famous “Hollywood” welcome sign.

This structure is not an ordinary one, Osmeña said adding that it has been built to withstand even the strongest typhoon. This is the reason why the project, which would also promote the SRP, is very expensive, he said.

The welcome sign is just part of the bigger plan, the mayor said citing another plan to build a large water tank that would appear like a tower standing beside the signage.

He said the giant water tank can hold a maximum of 10 million liters of water from the wells of the SRP. This tower will also have coffee shops and bars whose lights would become a nightly attraction from afar.

Osmeña said the entire “welcome” project would cost P20 million, an amount that he insisted is “not foolishness” but a bold promotion of the SRP.

Once the structure is finished, it would become a city landmark that would attrack local and foreign tourists, he said.

The mayor added that the city would have to wait until the first sale of SRP lots is finalized. The city will bid soon the 30-hectare block of the SRP at the Mambaling side.

Osmeña earlier said that there are at least three companies interested to buy the part of the property. — Wenna A. Berondo/RAE

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Sell reclamation (South Road Properties) lots without bidding?

By Doris C. Bongcac
Cebu Daily News
Last updated 02:17pm (Mla time) 10/23/2007

CEBU CITY, Philippines - To hasten the sale of lots at the South Road Properties (SRP), Cebu City Mayor Tomas Osmeña wants to skip government bidding processes.


Osmeña said government bureaucracy is causing delays in the disposal of SRP lots, so the city government is in talks with the Commission on Audit (COA) to allow the city to sell SRP lots without auction, but at a price approved by the COA.

“The COA is still considering some of our proposals. Our thrust is to maximize what is beneficial to the city,” the mayor said.

At least three major real estate companies are in talks with the city to acquire lots at the SRP, Osmeña said. He declined to disclose details about the companies or their plans for the SRP.

The mayor said the city would not act on the proposals of these companies unless city officials can be sure of what the companies intend to do with the SRP lots. He also said the city would wait for the COA’s approval to skip the bidding process before disposing of any more SRP lots.

The Government Procurement Act requires the national and local governments to auction the disposal of government properties to get the best possible price for it.

Earlier, Osmeña planned to first sell off 30 hectares of SRP land located near its Welcome Hill to quickly pay off the P6-billion loan from the Japan Bank for International Cooperation to construct the SRP. The rest of the lots would then be leased.

On Monday, however, the mayor said the city government may also sell lots other than those near the Welcome Hill because city officials want to be “sensitive of the market conditions.”

“Some investors are eyeing other parts of the SRP,” he said.

If SRP lots are to be sold without going through bidding processes, the price would be based on the market value approved by the COA, the mayor said.

“The price will be determined by appraisal, but I will put a premium depending on what kind of Establishment is going to be operated there,” he said.

Preference will be given to businesses that would not compete with local industries, such as business process outsourcing.

“We are not selling a piece of land. We are selling development, and we are being picky,” Osmeña said.


The mayor added that he does not want the SRP to end up like Mandaue City’s reclamation project, which, he said, has become a “junkyard for surplus equipment for sale.”

“This (SRP) is one area where we want to maintain certain standards,” he added.

Osmeña said he was confident that the city government would be able to meet its target revenues from the SRP.

He said he expects to earn a total of at least P500 million from the reclaimed property by the end of the year.

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Tomas remains very selective in accepting locators at South Road Properties

The Freeman
Tuesday, October 23, 2007

Cebu City might be saddled with multi-million worth of debts but Mayor Tomas Osmeña stood firm over his decision to be strictly selective in accepting from any source, lease or purchase proposals of part of the 295-hectare South Road Properties.

“We’re not just selling a piece of land but development,” Osmeña said in a press conference, emphasizing that he would not just accept any proposals from any business or institution.

The mayor said, “We’re very picky with who we’re dealing with,” explaining that the city will only deal with people who can maintain the standards that has been set for the SRP.

Osmeña admitted that the city has already received several proposals but most of these were turned down. One of the rejected proposals was putting up a stockyard, he said.

He said he would not like the SRP to be like a “junkyard” similar to what happened to the Mandaue reclamation project. “I have to balance it. If I want to be lazy about it, I will just chop it up and sell it,” said the mayor.

So far, there have already been at least three locators, all of which are real estate firms and each of which had proposed to purchase at least seven hectares of the SRP.

These locators still have to undergo scrutiny to ensure that they can create “impact” for SRP and the Cebu economy, and to make the SRP more “marketable” similar to what the Mactan Export Processing Zone and call center businesses have done.

Meanwhile, Osmeña said the city has been negotiating with the Commission on Audit on the legal aspects in dealing with offers from businesses. The city is open to bidding requirements and processes but the mayor said these might “destroy the marketability of SRP.”

“We tried to avoid bidding just like the Philippine Economic Zone Authority,” the mayor said COA would not allow the city to follow the procedures undertaken by PEZA-registered companies.

He said that the city should be “very sensitive to the market price condition. We still bid out but on some bases.”

The city needs to raise P500 million this year to pay its loan from the Japan Bank for International Cooperation that was spent in developing the SRP. — Liv G. Campo/RAEType rest of the post here

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