A check for P1.18 billion. Cebu City Vice Mayor Edgardo Labella and City Treasurer Diwa Cuevas show a check for P1,185,228,000, the down payment from the Ayala Land-SM Prime Holdings consortium for 26 hectares in the South Road Properties. The total “security” the City received yesterday amounted to P1.6 billion, the biggest it has made in one day, Cuevas said.  (Sun.Star Foto/Arni Aclao)

A check for P1.18 billion. Cebu City Vice Mayor Edgardo Labella and City Treasurer Diwa Cuevas show a check for P1,185,228,000, the down payment from the Ayala Land-SM Prime Holdings consortium for 26 hectares in the South Road Properties. The total “security” the City received yesterday amounted to P1.6 billion, the biggest it has made in one day, Cuevas said.  (Sun.Star Foto/Arni Aclao)

THE Cebu City Government made P1.6 billion in one day, after it conducted the bidding for three lots in the South Road Properties (SRP) with a combined area of 45.2-hectares.

A consortium of Ayala Land-Cebu Holdings Inc. and SM Prime Holdings Inc. was the lone bidder for a 26-hectare parcel and offered P10.009 billion or roughly P38,000 per square meter.

City Hall’s floor price was P20,000 per sq. m.

Filinvest Land Inc. placed the highest bid for the two other parcels, which have combined area of 19.2 hectares. Its offer: P6.758 billion or about P35,128 per sq. m.

City Hall had expected to get at least P9.15 billion for all three lots. It raised P16.76 billion yesterday.

It also received P1.6 billion as the bid security, which forms part of the down payment and is equivalent to 10 percent of the total bid price.

It will serve as a guarantee that the successful bidder will enter into a contract with the City after they are awarded the lots.

Treasurer Diwa Cuevas said the P1.6 billion was the highest revenue City Hall has ever generated in just a day.

The City’s committee on awards first conducted the bidding for Lot 8 yesterday morning. This 26-hectare parcel includes the area where the San Pedro Calungsod Templete stands.

The City had expected to sell it for P5.267 billion, at least.

The Ayala-SM consortium turned over yesterday a check for P1.1 billion as their bid security, after they offered to pay P10.009 billion for the land.

“There is always something positive in synergy between the two parties and we are very thankful to Ayala for giving us this opportunity to tie up with them,” said SM’s Vice President for Market Research and Planning Ronald Tumao.

Tumao said this is the first time they will be working with Ayala on “a big collaboration” in Cebu.

Arena: Go

In Manila, though, Cebu Holdings Inc. (CHI) President Aniceto Bisnar said that Ayala has worked with SM on some projects in the Ortigas district, among others.

“As the two biggest developers in the country, it makes sense to have synergies with each other considering that we are also seriously expanding here in Cebu. We think it was a very good bid and we are very fortunate that we won the bidding,” he added.

As to the City’s requirement to build an arena in the SRP, Tumao said that was already included in their master plan for the 26 hectares. It was a big part because SM intends to bid for the 2019 FIBA Basketball World Cup.

“I think Cebu will probably be the best alternative area for out-of-town games for the FIBA,” he said.

An earlier plan to build the arena on the 30-hectare land that SM previously acquired in the SRP, Tumao said, is “floating”.

“Meaning to say we may or we may not (build the arena in that area). Basically, we feel that this area (the 26 hectares in yesterday’s bidding) for the new development would be better. I think this is going to be a fruitful thing for the entire Cebu,” he said.

Terms

Under the terms of reference (TOR) for the sale of the lot, 70 percent of the area should be developed for commercial or office spaces, while residential area can take up no more than 30 percent.

In the afternoon, the committee proceeded to the bidding for Lots 7 and 17, covering 19.2 hectares.

JG Summit Holdings (whose subsidiaries include Robinsons Land Corp.) and Filinvest both placed bids.

FLI’s bid was P6.758 billion (P35,128 per square meter), while JG Summit’s as P4.21 billion (P21,888 per square meter).

FLI’s bid security amounted to more than P600 million.

The City had expected to sell the two lots combined for P3.847 billion.

In an interview yesterday, FLI Director Joseph Yap said he was happy they won the bidding.

“But I think the big winner here is the City of Cebu because in both properties, they really got much higher price than the minimum bid price. Everybody is a winner here,” he said.

Confidence

Asked about their plans for the lot, Yap said they will follow the City’s requirements and complement their existing residential developments in the SRP, such as Almafi Oasis and Citta de Mare.

Mayor Michael Rama, in his regular news conference, welcomed the results.

“God is good all the time. All the time, God is good. I am elated. I am the happiest man,” he said.

Vice Mayor Edgardo Labella said the developers’ responses demonstrated “the great trust and confidence of the business community in the honest and good governance of the present administration.”

Councilor Sisinio Andales said, though, that he wished the executive department had heeded the City Council’s request to temporarily put the bidding on hold.

The Council had asked the Department of Interior Local Government (DILG) to issue an opinion on whether or not a 2014 resolution authorizing Rama to dispose of the 45.2 hectares can supersede an ordinance.

Questions

He referred to City Ordinance 2332, which required unsolicited proposals from prospective buyers of SRP land.

“Pero naa na man na, wa na tay labot kung dunay mo-file ug kaso nila ug ma-declare null and void ang bidding (What’s done is done. We will have nothing to do with it in case someone files a case and the bidding is declared void),” he said.

Councilor Margarita Osmeña said she will just wait for the DILG’s opinion.

“We asked that it will be held in abeyance but when do they follow us anyway?” she said.

What happens next? Lawyer Jose Daluz III, who heads the technical working group (TWG) of the committee on awards, said the bid documents of the highest bidders will be reviewed and verified.

If everything is in place, he said, the committee will issue a notice of award. They will then endorse the contract to sell to the City Council and seek their authorization for the mayor to sign it.

For this year, the City had identified P4.5 billion from the sale of SRP lots as one of its sources of funds for its P13.4-billion annual budget.

After yesterday’s bidding, the executive department attended a thanksgiving mass at the Basilica Minore del Sto. Niño.