Protecting, promoting SRP
Former Cebu City mayor Tomas Osmeña made a strong case in asking the Cebu City Council not to repeal the ordinance requiring the mayor to secure council approval before finalizing negotiations with prospective buyers of the South Road Properties (SRP).
In his remarks during a public hearing last week, Osmeña, whose allies form the majority bloc, reiterated that Ordinance No. 2332 which Mayor Michael Rama is trying to repeal doesn’t prohibit the mayor from negotiating a sale with interested parties.
The mayor has to get the buy-in of the City Council before any deal is finalized.
Before one shrugs off any agreement as next-to-impossible given the hostile relations, the disposal of SRP lots should not be reduced to a question of political partisanship. Each offer should stand public scrutiny and stand on its merits – does it benefit the public good? Is it a good deal?
Ordinance No. 2332 is a check and balance piece of legislation that prevents the sitting mayor from engaging in whimsical transactions by himself.
Yes, the mayor can entertain a potential buyer and negotiate terms. But like any major real estate transaction, it requires approval of the City Council to be sealed, which is a basic tenet of the Local Government Code, and makes sense.
Remember the P98.9 million Balili deal, where the Capitol paid cash for land that was mostly under water in Naga City? The provincial legislature was too timid to challenge the deal in its early stages. The land deal, carried out by the Cebu governor, ended up a potential plunder case in the Sandiganbayan, and could have dragged down more officials if the Provincial Board had actually ratified the sale.
In the case of the SRP, the mayor and his arch-critic have different views of what is a good buyer and when is the right time to sell.
This is where discussion should focus.
Osmeña made clear that as “prime mover” of the SRP whose 1996 Japanese loan amortization all Cebuanos will pay until 2030, the city should keep out real estate speculators, and competitors of the anchor investors who gambled big in putting up first stakes in SRP – that’s SM and Filinvest. In his calculation, the city will earn more from percentage proceeds of the two joint ventures by waiting for them to fully develop in a few years, and benefiting from the rise in adjoining lot values, than by selling bits and pieces now to brokers just waiting for the highest bidder.
Mayor Rama, on the other hand, sees the ordinance as a stumbling block. In Ordinance 2332, the joint venture rules of bidding, a Swiss challenge, and detailed requirements of investors is a complicated formula of vetting the best offer. Clearly not his style.
Eager to raise revenues to shore up his ambitious P10 billion budget which he can’t get from a hostile city council, Rama said early on he was talking with Megaworld, and open to offers of other developers like a Japanese group eyeing a retirement village. Inviting another mega player and direct competitor goes the other way.
Nothing can stop Rama from courting Megaworld or the Japanese retiree proponents, but can he close the deal?
We’d like to hear the details of what makes this an alternative worth changing the rules of the game for Cebu City’s 300-hectare centerpiece project.
