Tomas to keep South Road Properties lot negotiations hush-hush

The Freeman
Wednesday, September 19, 2007

Mayor Tomas Osmeña will no longer reveal details of his negotiations with potential investors at the South Road Properties after some investors reportedly criticized him for revealing details of their negotiations.

Osmeña, who said he respects the wishes of potential investors, yesterday explained that he revealed details of negotiations to the public because he only wanted to be transparent just like the way he is running City Hall.

The mayor, however, told reporters that there are five potential investors who want to purchase the 30-heactare part of the SRP at the Mambaling side. The city would soon bid out the 30-hectare area.

“There are at least five interested bidders but I can’t give you the details because I was criticized by investors for talking about our negotiations. But I was just transparent,” Osmeña said.

There are also investors who want the other portions of the 300-hectare facility but Osmeña said that the city would prioritize the sale of the 30-hectare portion, saying the city would be very liberal on its first sale.

Earlier, the mayor said that there is a certain investor who offered to buy the lot for P2 billion but while the city has not decided on it, the lot is still open for other offers. He said that the lot will be sold at a minimum of P7,000 to P13,000 per square meter or around P2 billion to P4 billion for all 30 hectares.

“Our first sale would be very liberal, so now is the best time to make a deal,” he said.

He reiterated that the city is aggressive in selling the SRP because it needs to have extra income aside from traditional sources to meet its liquidity requirement for the next few years.

Osmeña earlier said that the city needs to raise P500 million this year to take care of the city’s debts for its loan from the Japan Bank for International Cooperation for the funds it spent in developing the SRP.

The city government still has a remaining balance of P6.3 billion on 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. The loan is payable in 20 years. - Wenna A. Berondo/QSB

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City to close sale on South Road Properties lot this year: Tom

Sun.Star
Tuesday, September 11, 2007

CEBU City will close a sale on a South Road Properties (SRP) lot this year, Mayor Tomas Osmeña announced yesterday.

Osmeña, however, said he will hold back some details of the discussions with interested investors at their request.

Osmeña said a parcel of land will be bidded out and sold to the winning bidder by the end of the year.

The mayor initially planned to sell only the 30-hectare lot just after the SRP welcome hill but because several prospective buyers want properties other than the one he wants to sell, he may consider selling other lots.

He has not set criteria on what industries or investors will be prioritized for the first sale since his only concern is to raise money for the next loan payment.

Ideal use

If he had his way, he wants the winning bidder to build a commercial-industrial complex that will include a 25,000-seating capacity coliseum, which is the most ideal use for the 30-hectare lot.

“Yes, we should have something happening before the year ends, definitely we will have something... Some developers prefer sites other than the 30 hectares. We are now discussing with COA on what the different alternatives are (in bidding out the lots),” said Osmeña.

The floor price for the lots during the bidding will be P5,000 per square meter, “and it will be open to everyone, it’s open to the universe.”

In his news conference yesterday, the mayor said interested investors at the SRP have criticized him for his pronouncements on their interests at the SRP and their planned developments.

Quandary

“That is why I am now in a quandary because the SRP is owned by the people of Cebu City and right now, they’re saying ‘Please don’t announce anything’. So for now, I will hold back what I can, anyway we’re not sacrificing so much transparency because once it’s finalized, we will have to disclose that eventually,” he said.

Osmeña had earlier announced that shopping mall giants SM Prime Holdings Inc., Filinvest Land Inc., Robinsons Land and Ayala Land are all interested to put up mix-use developments at the SRP.

He did not say yesterday whether the same parties will be participating in the bidding.

After making the first sale, the mayor said he will give high priority to industries that will increase the marketability of the SRP, such as a high-end hospital facility for retirees and expatriates.

The first investor to put up a high-rise building at the SRP will also enjoy concessions from the City Government.

Osmeña said soil tests conducted showed that buildings as high as 20 stories can be constructed there, just like the high-rise hotel that Sheraton built at the North Reclamation Area.

Contrary to reports that high-rise buildings in reclaimed areas are not safe, the mayor said the Sheraton hotel will be operational soon under the management of another hotel chain, Sofitel.

“Our concern at this time is to address liquidity problems and once we raise a few hundred million pesos, I’m happy already. The order of the day is not to go bankrupt and once that is satisfied, we’ll start to be picky again,” Osmeña added. (LCR)

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Cebu government eyes P3-B proceeds from sale of reclaimed area South Road Properties

By Wilfredo Rodolfo III
Reporter

CEBU CITY—The city government hopes to raise at least P3 billion as it auctions off a portion of its 260-hectare reclaimed property off the Mactan Channel.

The city council last week gave Mayor Tomas Osmeña authority to sell 32 hectares of prime property at the South Road Properties (SRP) through public bidding. The council also allowed the mayor to start negotiating with other companies for a possible lease or joint-venture projects for the rest of the property.

Councilor Jose Daluz II told Business Mirror on Monday that the 32-hectare property, tagged lot 1-A, would be sold to one buyer. The terms of the bidding will be made public later this week, he added.

Daluz, the chairman of the council’s committee on finance, said City Hall is still deciding on the floor price for the property, but said it would be around P12,000 per square meter.

“This property is very valuable because it is the first lot you will see as you enter the SRP. This is very ideal for commercial businesses like malls,” Daluz said.

The money raised from auction will be used for debt servicing as well as for more development projects in SRP to make the property more attractive to investors. Some of the proceeds will also be used for the city’s services.

He said the second authorization given to the mayor would allow the chief executive to discuss terms with the companies interested in putting up commercial or industrial facilities in the area.

The financial terms of deals, however, would have to go through the City Council for ratification, Daluz said.

The SRP, completed in 2001, was built through a ¥6.7-billion loan obtained by the city government with the Japan Bank for International Cooperation. The biennial amortization would run up to 2020.

The national government then contributed about P10 billion for the Cebu South Coastal Road, which straddles through the SRP.

The city government, however, only officially sealed one deal: A four-hectare lease contract with Bigfoot Global Solutions, which plans to build a film studio on the reclaimed property.

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Council authorizes Tom to sell 31 hectares of South Road Properties

The Freeman
Thursday, August 23, 2007

The Cebu City Council yesterday authorized Mayor Tomas Osmeña to sell 31.9 hectares of lots at the South Road Properties so the city could earn an amount of close to P4 billion to finance more projects.

The city legislators unanimously approved the resolution of councilor Joey Daluz, III to allow the mayor to dispose of properties through a public bidding and hope that such would be the start of SRP’s development.

Mayor Osmeña, who is now on an official trip to India to study the country’s clean and cheap airconditioning systems, said these properties are situated immediately after the viaduct or just across barangay Mambaling, a location he described to be “advantageous to buyers”.

The city would construct signage at the SRP worth P5.2 million and would spend P2.6 million for the landscape at the end of the viaduct, on the right portion of the SRP upon reaching the reclaimed properties from the city.

Osmeña said the properties located at the back where the welcome signage is to be constructed are the same 30 hectares of lots that are first to be sold through bidding.

It was learned from Daluz that the lots were already titled and registered with the Land Registration Authority under the name of the City of Cebu on September 22, 2005.

The mayor said any licensed real estate brokers who could help the city sell the lots at the SRP would be given a two-percent commission out of the proceeds of the sale.

If sale of lots is not done through a broker, the mayor said the commission intended for a broker would be donated to the Emergency Rescue Unit Foundation or to any charitable institution.

As of now, not even a single square meter of the 295 hectares of the reclaimed lots was sold, although an international filmmaker - the Bigfoot - has rented a two-hectare lot for only 40 US cents or about P26 for every square meter.

The city needs P1.7 million everyday to pay for its loan from the Japan Bank for International Cooperation.

Tinago barangay captain Joel Garganera earlier said the city could not sell the SRP lots to the public because until now the property is still being owned by the national government.

He claimed that the SRP lots are still not owned by the city because when President Arroyo issued a proclamation order transferring the ownership of the SRP to Cebu City, she made it without congressional authority. – Rene U. Borromeo/MEEV

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Cith Hall seeing 3 firms to market South Road Properties lots

Sun.Star
Thursday, August 16, 2007


MAYOR Tomas Osmeña said the Cebu City is seeing three appraisal companies for the valuation of South Road Properties (SRP) lots, as it is now engaged in “heavy consultation on who will bid out and where” on the sale of a 30-hectare portion of the reclaimed land.

He said the City is selling because of “liquidity requirements” for the next one to two years.

Otherwise, the City does not intend to sell SRP lots, reiterating his policy to instead have locators introduce projects that would generate jobs.

The mayor said prices of SRP lots are not expected to go down so that those interested must take advantage as “this is a good time to make a deal,” when the City is in need of money to pay its foreign loan.

Defense

Also, the mayor justified the spending of millions of pesos for the SRP welcome signage, saying there is no reason for one to spend on a “nice doormat” worth a few millions pesos when he is selling a multi-million property.

“It is like giving a gift. You spend a little money to put a ribbon, and a wrapper,” he said.

The sign is part of the promotion of the SRP.

To be constructed at the welcome hill leading to the SRP, the sign will be three stories high and will be made of welded aluminum pipes. It is also designed to withstand storms up to signal number five.

The words “South Road Properties” will be spelled out similar to the “Hollywood” welcome sign, and will include the SRP emblem.

Cheap

Last Monday, Osmeña said the welcome sign is the cheap part of the project and that P20 million will be spent to construct a tower beside the sign.

The tower would be built because he did not want a mere water tank to be built near the welcome sign.

A project concept pinned on the wall of his office showed the giant welcome signage with the tank on one side; only that the tank looks like a castle tower complete with battlements.

He said spending for the signage and the tank is similar to parents exhausting their funds to send their children to school.

Although considered extravagant at first light, it really plays an important part in marketing the SRP, he added. (RHM)

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