Russian firm bares plans to redevelop Coral Reef

CEBU, Philippines - A newly established Russian company, Philippine-Russia Inc. (PRI) is now negotiating with the owner of foreclosed Coral Reef Resort on Mactan Island, to pursue a US$80 million re-development of the 36-hectare property.

In an interview with PRI president Alexander Zusik, he said that the company is planning to build a 600-room resort, 300 department buildings, business centers, 20 small villas, and develop Coral Reef coast line, to maximize the potential of the idle property in two years, after it seals a deal with the property owner, the Lucio Tan Group.

PRI is closely working with the Department of Trade and Industry’s Philippine International Trading Corporation (PITC) to help speed up the company’s developmental projects in the Philippines, including a multi-billion-peso project in Subic Bay, and the Coral Reef re-construction plan.

According to Zusik, PRI is confident that its local partners in the Philippines, are going to help them pursue this development plan, especially in Coral Reef, as this will provide additional tourism-related facility for Cebu that will not only attract Russian tourists, but also other foreign travelers.

The original owner of Coral Reef the Palm Tree Estate Inc., led by Japanese investor Kenichi Akimoto is currently fighting to get back the property from the Philippine National Bank (PNB).

Coral Reef was foreclosed by the Lucio Tan led PNB, in September of 2005.

Palm Tree Estate Inc. and Bell Air Golf and Country Club was able to secure a loan from PNB in 1997 of P340 million, and second loan of P80 million, for the development of Resort’s expansion to build condominiums and exclusive golf club.

Reportedly, PNB has pegged the property's price at P800 million. But, the asking price may lower to P750 million, if the interested buyer or developer will have to settle the existing legal problems of the property.

According to Zusik, the company is going to propose its comprehensive re-development plan for Coral Reef, however, he did not clarify if the PRI is going to buy-out the entire property, or offer a partnership deal with the current owner.

In 2006, a China-based group attempted to ink a deal with the PNB to buy the idle Coral Reef Resort property.

The Chinese group supposedly planned to build a medium rise hotel and resort development with convention center, and develop the 9-hole golf course of Coral Reef.

Initial plan of the interested Chinese buyers was to build 1,000 rooms, sensing the big shortage of room in Cebu, but because of the legal problems faced by PNB against the property's former owner, the deal was called off.

This time, the Russian investor is confident that its Philippine partners, including the PITC, would help them seriously on this Coral Reef re-construction plan, while financial resources is not a problem.

Once, PRI will be able to pursue its planned development for Coral Reef property, Zusik said the company will have to look for an international resort management company to manage the resort, while PRI will also establish special travel agency that will promote the property to other countries, especially Russia.

For his part, Department of Tourism (DOT) secretary Joseph “Ace” Durano, he said that he will support any interested buyer or developer for Coral Reef property. DOT has been promoting this 36-hectare idle land with huge tourism potential to investors in the last few years.