John Hay developer says Baguio can’t claim hotels

BAGUIO CITY—The city government has no claim over two hotels built by the developer of Camp John Hay because most of the rooms have been leased out until 2046, an official of the Camp John Hay Development Corp. (CJHDevco) said on Sunday.

Baguio intends to take possession of all improvements and buildings constructed at the former American rest and recreation baseland by exercising a provision of its 19 conditions which facilitated the privatization of Camp John Hay.

In a text message, Alfredo Yñiguez III, CJHDevco executive vice president and chief operating officer, said the city government could not rightfully claim The Manor and The Forest Lodge which CJHDevco built, but which the company no longer controls.

“All the rooms in the Manor and the Forest Lodge are owned by third parties who were buyers in good faith,” Yñiguez said in a text message.

Takeover

The proposed takeover was discussed in a planning session attended by city government officials at the Subic Bay Freeport in June, said Baguio legal officer Melchor Rabanes.

This was also discussed during a special city council meeting on July 10, which was attended by lawyer Arnel Casanova, president of the Bases Conversion and Development Authority (BCDA), and CJHDevco lawyers.

In February, an arbitration tribunal tasked to resolve a contractual dispute between the developer, CJHDevco, and BCDA had “extinguished” the contract after concluding that both parties had violated the agreement.

Transfer of ownership

Councilor Betty Lourdes Tabanda said the nullification of the contract allows the Baguio government to exercise Condition No. 16, which requires BCDA to “transfer ownership of the land and its built-up and improved structures within the [John Hay Special Economic Zone or JHSEZ] to the Baguio City government upon the expiration of the land lease agreement between BCDA and its designated developer.”

Yñiguez said: “We (CJHDevco) will be returning approximately 80 percent of the entire Camp [John Hay], including about 10 hectares of the 18-ha development footprint which we were unable to develop due to the inability of BCDA to issue development and building permits.”

But the two hotels are managed by a hotel administrator approved by the unit owners and whose management contract must be renewed every five years by the same unit owners, he said.

A list of Camp John Hay sublessees showed that many of the hotel room owners are foreigners, prominent businessmen and politicians.

Yñiguez said these unit owners allow the hotel operator to rent out their rooms to guests for a share in the earnings. Their rights would lapse in 2046, on the expiration of their 50-year lease, he said.

This is the same assertion CJHDevco owner Robert John Sobrepeña made when he and his company had asked the Court of Appeals (CA) to determine how third parties or sublessees should be treated following the arbitral judgment that supposedly ended their feud with BCDA.

The tribunal formed by the Philippine Dispute Resolution Center Inc. (PDRCI) directed CJHDevco to return the leased property to BCDA and ordered the government to reimburse the developer P1.42 billion representing its investment.

The PDRCI ruling, however, does not address the fate of enterprises and home or unit owners inside the JHSEZ.

The Baguio court sheriff tasked to enforce the tribunal’s judgment had evicted everyone, including hotel unit owners, but was stopped by a temporary restraining order (TRO) issued by the CA. The TRO lapses on July 20.

The CA last week secured a gentleman’s agreement between the developer and BCDA that they would respect a status quo until the court resolves the matter on July 30, said BCDA legal officer Peter Paul Andrew Flores. Vincent Cabreza, Inquirer Northern Luzon