Terms, conditions for retirement hub yet to be finalized

CEBU, Philippines - The terms and conditions for the proposed retirement facility at the South Road Properties are yet to be resolved despite the project’s forthcoming final deliberation on June 11.

Lawyer Joey Deluz III, chairman of the city’s Bids and Awards Committee, said four issues were tackled during the recent meeting with city lawyers and Councilor Gerardo Carillo who heads the committee that is looking into the project: escalation rate; lease rate; safety nets; and commercial space

The project costs P1.41 billion.

Daluz said some of the councilors complained of the escalation rate proposed by the investors, which is two percent every five years commencing on the sixth year of operation. This is contrary to the amount proposed rate by the city government, which is three percent.

Likewise, the councilors scrutinized the proposed rent fee of P32 per square meter, which is P68 lower than that of the P100 per square meter proposal of the ad hoc committee and the executive department.

Apart from the lease and escalation rates, the councilors are reportedly doubtful as to the commercial space, knowing that the first three floors are devoted for commercial purposes.

At least three city councilors, he said, are not amenable to the final proposal of the Japanese investors. Daluz, however, refused to name the officials yet.

I Land Way Philippines, Inc. and Primary Properties Corp. plan to rent 12,500 square meters at the SRP for the retirement facility. In their final proposal, the presidents of the two companies set the rental rate at P32 per square meter.

However, the city government’s ad hoc committee headed by Councilor Gerardo Carillo together with the executive department proposed a P100 per square meter lease rate, which is higher than the P50 per square meter floor price proposed originally by an appraisal committee.

The leasehold agreement includes the proposed lease period of 50 years and additional 25 years, stressing that the first three years of the lease term is free. The ad hoc committee earlier proposed free rent for the first five years.

On the sixth year, the rental fee will increase to two percent of P32 per square meter rental fee after every five years until the succeeding years of the contract.

If the city government agrees to the proposal, the investors will pay for a six-month lot rental and the remaining balance will be paid as soon as construction of the facility begins. Also, a six-month advance rental will be given to the city government while the rest of the payables will be paid upon the execution of the lease contract.

Daluz said if the Council prefers to amend the final proposal of the Japanese investors, the latter will no longer pursue the project in Cebu City but in neighboring cities.

“We give it (decision) to the City Council. And, we are hoping that it would be a favorable decision because the Japanese (investors) have no plan of changing their propo-sal and they are sticking to it. They can’t go higher than P32 per square and others,” Daluz said, pointing out that the investors have been negotiating with the city government since August last year.

The retirement facility, Daluz said earlier, would give Cebu real economic activity.

“I hope the city will approve this. If they don’t, the facility would never be realized. The City Council should decide firmly in order not to delay any projects that are beneficial to the constituents of the city. Ngil-ad na kaayo atong standing sa mga Japanese tungod sa delay,” he said. —/JMO (FREEMAN)