CEBU CITY, (PNA) – Cebu City officials see brighter prospects for the 290-hectare South Road Properties (SRP) this year, with additional sale of SRP lots and other development projects contributing to more financial stability for the city.

Aside from additional revenues from ongoing construction projects across the city, leaders are optimistic that these projects can create additional employment opportunities in 2010.

Filinvest Land Inc. (FLI), which bought 10.6 hectares in the SRP and concluded a multi-billion peso joint venture with the city government, will break ground in the first quarter of this year, while SM Prime Holdings Inc. will start construction immediately after the sale contract for a 30-hectare land is awarded to them.

Joel Mari Yu, Managing Director of SRP marketing arm, Cebu Investment Promotions Center (CIPC), said he also sees a significant increase in the price of SRP lots once the two developers start construction.

The year 2009 ended with only one sale contract — the FLI deal – closed.

Once the transaction with SM Prime is closed, Yu said the city’s income from FLI and SM will be more than enough to cover the city’s loan obligations for the reclaimed properties.

Next month, FLI is scheduled to pay P269.5 million to the city for its second payment for its purchase of 10.6 hectares. In addition, once the sale to SM Prime of the 30 hectares it intends to acquire within the SRP is finalized, the city shall earn an additional P675 million – SM’s down payment for said property.

Cebu City Hall is expected to pay P694 million to the Land Bank of the Philippines for its loan amortization this year, according to records of the SRP Management Office.

“Once we close the deal with SM, the company will immediately pay close to P700 million as down payment. Like Filinvest, they will pay the balance within six years.

”The amount that will come in starting 2010 will be more than enough to pay the city’s annual loan obligations,” said Yu.

If no one challenges SM Prime’s unsolicited proposal to buy and develop a 30-hectare portion of the SRP, the City will award the contract to the company in mid-January.

SM intends to invest a total of P20 billion in the SRP, and its project therein is expected to create jobs for at least 3,000 workers.

After the SM deal is closed, the city will put on hold pending proposals from other buyers so it can maximize sales when the cost of the lots goes up.