CEBU, Philippines - The Felix Gochan & Sons Realty Corp., which claims as owner of Lot 917 in Barangay Lahug, contested Cebu City government’s disposal of the property to Hotel of Asia Inc.
This after the Commission on Audit Central Office reversed in June this year the 2009 decision of its technical committee, which had denied the land swap between the Cebu City government and Felix Gochan and Sons Realty Corp. after its president, Louise Y. Gochan, filed a motion for reconsideration.
Lawyer Grace Eloisa Que, Gochan’s counsel, said the city does not have the right to sell the 2,357-square meter lot to Hotel of Asia Inc.
“The city government can’t sell in good faith the lot since they know it’s ours and it is not subject for disposition… and because the COA ruling on the Deed of Exchange was valid,” she said during an executive session at the City Council yesterday afternoon.
This was part of their contention in the opposition letter filed before the COA after the city filed a motion for reconsideration on the recent COA ruling.
Social costs
The reversal of the decision, Que said was banked on the social costs of the exchange, which was not considered in 2009 COA decision.
“The millions of pesos that the government will spend to reconstruct the school buildings and relocate the beneficiaries of the City Government’s housing program, the interruption in the delivery of quality education in all levels, the disruption of the ongoing urban land reform housing program, and the long-term impact on community development have possible unsettling effects on the parties, especially the children, whose welfare deserves paramount consideration,” read the June 18, 2014 decision.
“The use of the Banawa properties for a considerable length of time did not automatically render the City Government indebted or liable to the Gochan for their rental usage, in the absence of any contract of agreement,” it further read.
Que said the commission took cognizance of their plight after filing a supplemental motion in 2011, saying that the rental losses had ballooned to over P161 million from 1970 to 2009, since the properties were utilized for public service.
Appraisals
A public appraiser and two independent others were tasked to evaluate the lots and based on the lowest valuation, there was a difference of P20 million between the costs of Gochan properties and Lot 917, which sits on a prime commercial location.
Based on the commission’s appraisal, which was lower than the two independent appraisals, the Gochan properties only had a market value of P24.6 million compared to close to P45 million for the city’s Lot 917.
Based on the COA ruling, the transaction violates Sec.3 (j) of Republic Act 7279 “that the lands to be swapped should be more or less of equal values, and if more valuable land is to be exchanged, that land should belong to the private person, not to the government entity.”
The decision nullifying the land swap was the basis for the city to sell Lot 917 to Hotel of Asia, which already paid it a partial amount of P46.09 million last January 10, representing 50 percent of the total cost of the property, which can only be utilized for hotel, condominium and office spaces.
The lot, located along Salinas Drive across the Asiatown I.T. Park and adjacent to the Waterfront Cebu City Hotel and Casino in Barangay Lahug, was awarded to Hotel Asia Inc. after it posted the winning bid of P35,000 per square meter December last year. The amount is P500 higher than the floor price set by the City Committee on Awards.
City Legal Officer Chief Jerone Castillo pointed out that the commission has denied with finality the motion filed by Gochan in 2011.
He said the Deed of Exchange was denied because it was disadvantageous to the city, stressing that the city owns the property.
“We have basis to continue the sale because the court did not issue an order stopping the transaction and there’s no injunctive writ. But with due courtesy to the court, we did not act on it until such time that they decide on the case of the merits,” he said.
Once the sale is pursued, Councilor Sisinio Andales said city government may be put in a bad light and “highly dangerous” situation because of the pending cases. — (FREEMAN)