Tom O: Capitol deal Filinvest’s ‘second choice’

There’s more than meets the eye in the Capitol’s new joint venture with Filinvest Land Inc., said Cebu City Rep. Tomas Osmeña.

Reacting to Gov. Gwen Garcia’s portrayal of the 1.2 hectare land deal as more advantageous than Filinvest’s earlier deal with Cebu City for 50.6 hectares in the South Road Properties (SRP), the congressman said leasing the province-owned lot in Salinas Drive for a BPO Complex  was only Filinvest’s “second choice” after SRP.

“Compare Cebu province with Cebu City? Gov. Gwen says the province will have an increase in P5 billion in assets with the lease with FLI.”

“What she did not say is that FLI has the option to lease it for up to 50 years. Do you think the building will be as commercially attractive after 50 years? That would make it as old as Asilo,” he said in a text message to Cebu Daily News.

“Filinvest is a good deal though because the city needs the BPO space now. But 50 years from now, the province will have a hard time renting out the old building.”

Osmeña said Filinvest’s interest in the province-owned lot in Lahug where the Cebu city jail was once located was just a second choice after the Cebu City government turned down Filinvest’s request to acquire 10 more hectares in SRP.

Osmeña and city officials had chosen instead to wait for land values to go up  in SRP with ongoing major commercial developments like SM City and Filinvest.

“Note that Filinvest wanted to get 10 more hectares from the SRP which we politely refused and the province lot was a consuelo – a second choice,” said Osmena.

The Province of Cebu and Filinvest broke ground last Saturday for a  P6.5 billion BPO Complex in Salinas Drive. The private developer will build the structures under a Build-Transfer-Operate scheme and operate the BPO complex for 25 years with renewal for 25 more years.

Last Monday, Governor Garcia said leasing the land instead of selling it outright to Filinvest was a better deal and is favorable to the provincial government.

The Capitol will receive P600,000 monthly rental and another P1.5 million a year from the joint venture’s gross revenues.

But Osmeña said that looking years ahead, “Who will want to use 50-year-old elevators, air con and plumbing? By that time, the modern buildings will rent out at much higher rates and the province has only a four percent increase a year.”

Now that Filinvest is the Capitol’s new partner, he said the governor’s brother Rep. Pablo John Garcia should “apologize” for attacking the Filinvest-Cebu City joint venture in SRP as an anomalous “sweetheart deal” in a 2009 privilege speech in the House of Representatives. Rep. PJ Garcia earlier sought a congressional investigation into the deal.