Antonio V. OsmeñaEstatements
THE 240,000 square meters of land and foreshore area purchased by Cebu Province from the Balili family has a tremendous potential in terms of non-residential land uses.
The purchase price of P94 million can easily be justified if and when the Province decides to introduce the necessary development as “self-contained” projects in relation to factors that govern non-residential uses.
On the Balili issue, Gov. Gwendolyn Garcia should consider that whenever land is to be allocated to competing uses, care must be taken not to violate the economic law of ‘highest and best land use.” Since the “highest and best use” is always determined by the present worth of future rights to income or amenities, consideration must be given to the existence of demand for the uses and purposes to which certain sites are dedicated in the overall subdivision plan.
Since business properties are known to bring a much higher price per unit of land, it is a common error to over-provide the amount of space required for commercial use. Simply designing an area as business property does not make it one. There must be demand for business property and that demand is generally in direct proportion to the number of people, or better, of families residing in the area.
In the case of the Balili property where titles were improperly issued on the foreshore area (fishpond and mangrove), Governor Garcia should undertake the proper reclamation procedure by applying for a legitimate title with the Philippine Reclamation Authority.
I hope the governor will practice developing instead of subdividing. Whenever land improvements are carried out in accordance with subdivision plans, and expenditures are made to provide essential site facilities, the field actions are appropriately classified as land developing. Whereas, literally interpreted, subdividing merely means the “breaking-up” of one or more large tracts of land into smaller sites or plots.
Where subdividing is the owner’s intent like the South Road Properties of Cebu City, it need not incur any additional expenses other than those related to purchase, reclamation or the conduct of a survey on the land—which involves placing markers or stakes at intended boundaries and submitting a surveyor’s “plat” of the proposed subdivision.
The process of developing is ordinarily far more comprehensive in scope than that of subdividing, and requires expenditures greatly in excess of those represented by the reclamation of the “raw” land or its purchase price.
The use of coal ash interspersed with limestone to prevent air pollution in the reclamation of the 200,000 square meters of foreshore (fishpond and mangrove) of the Balili property is a financial advantage to the cost to produce the “raw” land for developing.
Governor Garcia should subdivide the 240,000 square meters into commercial lots with the improvement of water mains, sanitary sewers, street grading and paving, curbs and gutters and the miscellaneous costs of legal, sales, and overheads.
To illustrate, assume that 240,000 square meters of the Balili area is fully reclaimed and 30 percent of the land is allocated for road network and open space, then a saleable area of 168,000 square meters is available for sale at a conservative price of P10,000 per square meter or a gross sale of P1.68 billion while developing cost would be P32 million.
The marketing of subdivided land is essentially a selling campaign. Marketing begins as soon as the development is made presentable; that is, when the ground is cleared, streets and service utilities installed, signs and markers put in place, and other work have been completed to make the land attractive.
I hope Garcia will extend her goodwill and cooperation with Cebu’s licensed real estate brokers, specifically the realtors who are essential to the successful marketing of the subdivided lots.
Employing the services of a realtor is a goodwill sign of transparency in the project and also readily liquidate capital invested for further employment in other project developments.
Although the area of the Balili lots is only half the size of the 50-hectare Club Filipino golf course developed by Ayala, decisions by Garcia governing land uses may have important and far-reaching consequences.
Capitol should use the combined skills of urban planners, architects, civil engineers, real estate consultants on the Balili project.
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