South Road Properties Council bans sale and negotiations

By Rene U. Borromeo (The Freeman) Updated July 19, 2012 12:00 AM

CEBU, Philippines - Selling or negotiating for the sale of lots at the South Road Properties (SRP) is now prohibited via a city ordinance.
This as the Cebu City Council approved yesterday an ordinance prohibiting anyone — including the mayor — from selling or even negotiating for the sale of lots at the SRP without prior approval from the legislative body.
Councilor Noel Eleuterio Wenceslao, a member of the Bando Osmeña Pundok Kauswagan (BOPK), is the author of the ordinance.
Wenceslao explained that since the ordinance does not prescribe fines or penalties, there is no need for it to be submitted to a public hearing.

Mayor to veto

Rama, in a separate interview, said he will not approve the ordinance because it is already a redundant to the provision of the Local Government Code, which provides that no contracts may be entered into by the local chief executives on behalf of the local government units without prior authorization from the Sanggunian or the council.
Wenceslao explained that his ordinance is not a duplication of what is provided for in Republic Act 7160, because this also prohibits even the mere negotiation for the sale of the SRP lots.
Rama earlier suggested that the city sell at least 10 parcels of SRP lots, which could earn it P1 billion.

‘At the right time’

According to Wenceslao the city will dispose the SRP lots only when the development projects undertaken by the Filinvest Land Incorporated (FLI) and SM Prime Holdings Corporation will be completed because such will help the prices of the land to appreciate.
Aside from the two major investors, the City of Cebu, during the term of then mayor and now Cebu City South District Rep. Tomas R. Osmeña, also entered a 25-year lease contract with Bigfoot Entertainment, for a movie production facility.
Osmeña said if the city will sell the SRP lots now, there might be so many buyers, but they may not use the properties immediately as what happened to the lots in North Reclamation Area.
He explained that the buyers today would be mostly speculators, who would just wait for the prices of the property to appreciate before also disposing them.

Income from SRP

Wenceslao said the city has already generated income out of the installment payments and lease of SRP lots and expects that the revenue will continue to for as long as the City of Cebu protects its investments in the SRP.
Aside from the 40-hectare property that is under a joint venture contract between the city and Filinvest Land Inc., the city also sold 10.6 hectares to FLI at P1.5 billion.
In that joint-venture contract, the city will get a 10 percent share out of the total gross revenue of all infrastructure projects to be undertaken inside the 40-hectare property.
The city also receives quarterly installment payment from SM Prime Holdings Corporation for the 34 hectares that the mall giant bought for P2.7 billion.
If the mayor will make true his pronouncement not to sign the ordinance, the law provides that the city council has the power to override his veto power by at least two-third votes of its members.
Unlike during the administration of Osmeña that the draft agreement of the sale of SRP lots was just ratified by the city council, this time even the negotiation for the sale of lots needs prior approval from the legislative body.
“For the avoidance of doubt, prior authorization and not mere ratification from the city council is a condition for the validity and legality of transactions involving the conveyance in one form or another of properties in the South Road Properties,” said Wenceslao.
But he explained that while the city council approved the ordinance, the city is still open to receiving, studying and evaluating unsolicited proposals for undertakings within and the development of SRP, subject to the approval of the council and the mayor.

— /NLQ (FREEMAN)