CH gets P1 billion from FLI deal

Jean Marvette A. Demecillo (The Freeman) - February 16, 2019 - 12:00am

CEBU, Philippines — The Cebu City government is P1 billion richer yesterday as it received its minimum guarantee representing its share from the Joint Venture Agreement with the Filinvest Land Inc. (FLI).

 

During the turn over ceremony yesterday at City Hall, FLI Senior Vice President for Visayas and Mindanao Tristan Las Marias handed the check to Mayor Tomas Osmeña.

“It’s advantageous to the sense that it’s progressive. If they increase the price, we’ll get 10 percent. Other convention joint venture, you just get the share. If they decide to put more floors, we’ll get 10 percent,” Osmeña told reporters.

The city received the check amounting to P904.8 million net share out of the P1.04 billion which is subjected to taxes.

In 2009, the city government and FLI entered a joint venture agreement, which stipulates the profit-sharing scheme on the development of a 40-hectare property at the South Road Properties (SRP).

In the JVA, the mayor said the city is entitled to get 10 percent of the sales and that FLI cannot sell land but only condominium units.

Osmeña said there’s less possibility of corruption with the transparency of the firm with its total sales, saying the city will not intervene in deciding the value of the condominium units that will be sold.

Expecting to receive the P1 billion share this year, the city has included the income as part of the sources of funds for this year’s P8.1 billion Annual Budget.

“It will go on. That’s an ongoing. That’s forever arrangement. That’s a joint adventure. It’s a different kind of animal,” Osmeña said when asked until what year will the city get a share from FLI.

Las Marias said the FLI has already remitted a total amount of P2 billion minimum guarantee since the first release in 2014 with P1 billion remittance.

He said FLI’s relationship with the city will be “very long” as it has not finished the development on the 40-hectare property at SRP.

“That’s the good part. I think we’ve barely developed half of it (40-hectare). There’s more to come. So, as what the mayor said, anything we sell at whatever price and the prices are quite attractive, very very competitive,” he said.

In a press release, FLI said it is the pioneer SRP investor and has poured over P10 billion for the City di Mare project, a planned coastal township.

Osmeña said the city has survived without anything, saying he has not touched the billions of pesos that the city got from the giant firms that bought the 45-hectare area at SRP because it was “anomalous sale.”

Sought for comment, City Councilor Joel Garganera said the 40-hectare property has not been fully-developed, stressing the need to maximize the city’s property through the profit sharing.

“Ang first phase nato, nakadawat ta og P1 billion in 2014. For 10 hectares, the city received P1 billion. All taxes are to be absorbed by the city like transfers tax,” he said.

He added the city is not getting any real property tax from the development considering that it still owns the property.

“For the record, for the last 10 years, the city received P2 billion for the 20-hectare property. So, my question lang ani, if you look at the first and the second development, there are still spaces kabutangan…if ever magtukod og buildings sa first and second phase, is the city still entitled of the 10 percent share?” he asked.

Garganera said he just want the city to get its rightful share from the agreement and to maximize the 40-hectare property which is part of the profit sharing.

He understood that the FLI was the first investor at SRP that is why the 8,000 per square meter share is cheaper compared to the value of the property nowadays.

As to the collected P1 billion from FLI, Garganera said he is hoping that the city’s executive department will implement the construction of Pardo Access Road, which will be an additional entry/exit point at SRP.

As of now, he said there are only three entry and exit points at SRP which is going to Talisay City via the Cebu South Coastal Road, and going to the Cebu City proper via the Mambaling Access Road and via north bound of the Cebu South Coastal Road.

“That’s a big development. With the traffic that we are experiencing karon, we need access road. Atong road network dinha, kon naa man tay kwarta, i-invest nato dinha because we promised Filinvest for that,” he added. — KBQ (FREEMAN)

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