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Baguio sees loss in John Hay row

/ 12:32 AM February 15, 2015

BAGUIO CITY—Amid the claim of victory by both the private firm developing Camp John Hay and the government agency managing former US base lands over a tribunal ruling on their dispute, this city may end up as the biggest loser in the process.

The ruling, by the Makati City-based Philippine Dispute Resolution Center (PDRC), ordered the Bases Conversion and Development Authority (BCDA) to pay P1.4 billion to the developer, Camp John Hay Development Corp. (CJHDevco), to reimburse CJHDevco the rent it paid since 1996.

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CJHDevco, the ruling also said, is to return more than 200 hectares of its leased area to BCDA. Both BCDA and CJHDevco claimed victory in the ruling.

In a statement, CJHDevco said the ruling, however, is not yet executory until a writ of execution had been issued.

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CJHDevco chair Robert Sobrepeña, in the statement, sought to assure investors in Camp John Hay that their rights and interests “will continue to be respected and protected.”

“The BCDA consented to all sub-leases within the camp when it expressly gave, in the lease agreement itself, CJHDevCo the right to sub-lease various areas and real estate inventory therein,” he said.

He added that a takeover by BCDA of Camp John Hay would be illegal since a preliminary injunction had been issued against it.

The PDRC decision meant substantial revenue losses for Baguio City, and a blow to the local economy, said Councilor Peter Fianza, who served as city administrator during the terms of former Mayors Braulio Yaranon and Reinaldo Bautista Jr.

Under the conditions that the city government set for supporting the lease agreement between BCDA and CJHDevco, the BCDA would allot an income share for the city that should be either 25 percent of all rent or 30 percent of net income from the entire operations of Camp John Hay or whichever is higher.

Fianza said the city government had been waiting for its share from rent to cover P250 million it had advanced in 2011 to acquire the Baguio Convention Center from the Government Service Insurance System (GSIS).

The city government had mortgaged the convention center against its share of future rent to be paid by CJHDevco.

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But it was forced to pay the balance when the dispute broke out in 2011, and GSIS threatened to get back the convention center, Fianza said.

Lawyer Melchor Rabanes, city legal officer, said the city government may pursue other means to collect its share from Camp John Hay, including filing a lawsuit to get some of the land that BCDA is asking CJHDevco to turn over.

BCDA had earlier offered to pay the city with golf shares and “overvalued John Hay property” which the agency acquired from CJHDDevco through dacion el pago (or debt repayment using assets), Fianza said. “But we refused,” he said.

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TAGS: Baguio, Bases Conversion and Development Authority, Camp John Hay, Camp John Hay Development Corp., Philippine Dispute Resolution Center
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