Camp John Hay, private developer fight over P3-billion unpaid rental

BAGUIO CITY, Philippines -- Not even the Holy Week could slow down the raging “battle” within Camp John Hay – the city’s prime tourism showcase.  

The state-run John Hay Management Corp. (JHMC), a subsidiary of the Bases Conversion Development Authority (BCDA) supervising the development of the former American rest and recreation facility, and the private developer John Hay Development Corporation (CJHDevCo) are entangled in a long-standing dispute that has stagnated at some point the city’s tourism and economic growth.

Among the problems is the reportedly unpaid P3 billion rental as agreed upon when the premier Baguio land was leased to CJHDevCo in 1997. 

Under such agreement, the local government was supposed to receive an equitable share of two percent from the gross income of operations and entitled to 25 percent from rentals paid to BCDA, or 30 percent from net income from all operations within Camp John Hay.

But JHMC president Arnel Paciano Casanova said   Baguio City can only get the 25 percent if CJHDevco pays its obligations.   

“(But) the lessee has not been paying its debts and has actually rescinded the contract in January this year, showing that it has no intention to pay its arrears,” Casanova said.

Baguio City Mayor Domogan wants a practical solution and appease the cash-strapped city government wanting of funds for tourism build-up.   He said ‘it is already fine if CJHDevCo pays P500 million as it offered last year. 

Domogan was Baguio congressman and now Rep. Bernardo Vergara was mayor when the controversial “privatization” of John Hay was a hot item.

But the state-run JHMC maintains it cannot agree to negotiate because it would lead to another restructuring agreement – a fourth one.   

“Seeing how CJHDevco has operated over the past 15 years, they only paid the first trance upon the signing of the restructuring agreement. After that, they simply stopped paying,” Casanova said.  

Still, Domogan believes CJHDevCo is willing to pay as long as government commitments are given when the contract in 1997 was forged.

Last month, the Special Committee on Bases Conversion in the House of Representatives passed a resolution to create a Technical Working Group (TWG) led by Rep. Vergara, to settle the dispute.

The City of Baguio, in a position paper, requested the committee to urgently call both parties to settle their legal differences and to evaluate and determine the obligations that any of them might have failed to comply with so that it can collect its 25 percent share.

Domogan said an exchange of letters between BCDA and CJHDevCo shows the willingness and good faith of the latter to pay rentals, but seeks the commitment of the government to live up to its end of the contract, considering that the “BCDA has reneged on its commitments in the past.”

Domogan said that if BCDA agreed to collect from CJHDevCo its offer of P500 million last year, the 25 percent share of Baguio City, which would amount to P125 million, would already help the community.

Much ado about water

Meanwhile, a water-refilling firm in Camp John Hay has sought relief in court against JHMC over closure of its operations in the former US rest and recreation facility.

In a 20-page complaint filed before the Baguio City regional trial court (RTC), the John Hay Spring Inc. (JHSI) questioned the legality of the cease and desist order (CDO) issued against it by the state-run JHMC last month, supposedly for lack of sufficient permits to operate in the camp.

The company specifically asked the RTC to issue a status quo order enjoining JHMC, represented by vice president and chief operations officer Mita Angela Dimalanta, from implementing the CDO.

JHSI also sought to restrain Remegio Basilan, head of the Food and Drugs Cluster of the Bureau of Food and Drugs, Department of Health-Cordillera Administrative Region (BFAD-DOH-CAR), who inspected the water-refilling station despite an existing permit.

It demanded compensation of P808,000 from the government for damages caused by the closure order.

The complainant argued that JHMC has no regulatory powers and that it acted ultra vires when it issued the CDO against JHSI, thereby preventing it from operating its water-refilling station and serving its customers within Camp John Hay.

The complaint alleged that JHMC does not have the authority to impose, issue, and implement a cease and desist order in any legitimate establishments in the area.

JHSI further asserted that as a domestic private corporation, JHMC’s power and authority is limited by its primary purpose for which it was registered, namely to “develop, manage, ... and maintain the facilities and properties within and around Camp John Hay for tourism, commercial, industrial, residential, nature reserve and human resources development center.”

It claimed that JHMC, being a private corporation, “does not have the authority to regulate, and moreso, sanction and penalize another private corporation, such as the plaintiff JHSI, for any alleged lack of Permit to Operate and Accreditation.”

The JHSI also filed a graft complaint against Dimalanta, Basilan and Joey Bello, head of One-Stop-Shop Action Center of JHMC before the Office of the Ombudsman for usurpation of regulatory powers and grave coercion penalized under the Revised Penal Code when they unlawfully ordered the closure of the business operations of a water-refilling station on March 26.

In 10-page complaint, JHSI president James Molina asked Ombudsman Conchita Carpio-Morales to hold the JHMC officials and Basilan criminally liable for usurpation of official functions and grave coercion, as both defined and penalized under the Revised Penal Code.

JHSI official accused Dimalanta, Bello, and Basilan in relation to the issuance and implementation of an illegal, invalid, baseless, and unenforceable CDO against JHSI and posting six armed private security guards to prohibit and restrain JHSI from operating its water refilling station.

Molina also accused Dimalanta, Bello, and Basilan of preventing JHSI from conducting its legitimate business of operating a water refilling station despite the fact the JHSI is duly licensed and authorized to do so. – Edu Punay