John Hay developer to turn over facility to BCDA in 90 days

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BAGUIO CITY – The Camp John Hay Development Corporation (CJHDevCO) will turn over to the state-owned Bases Conversion and Development Authority (BCDA) the 247-hectare John Hay Special Economic Zone within 90 days upon receipt of the judicial confirmation from the city’s Regional Trial Court (RTC) and the full payment of BCDA of the 1.42 billion representing damages and lease rentals it paid to the government since 1996.

Robert John Sobrepeña, CJHDevCo Chairman, said the developer of the former American military base is satisfied with the outcome of the arbitration case and the decision rendered by the Philippine Dispute Resolution Center, Inc,. that is why they are willing to turn over the facility to the BCDA upon the compliance of the two conditions.

“We are in favour of finishing and getting on with it. We agree and we are happy with the arbitration decision. We feel vindicated by the arbitration tribunal in upholding our position,” Sobrepeña stressed.

He explained CJHDevCo does not owe any P3.3 billion back rentals to the BCDA but it is now the state-owned corporation that owes the developer some P1.42 billion in damages and for all its rental payments since 1996.

The CJHDevCo pointed out the developer had two positions in the arbitration case: first is for the reformation of the lease agreement in order to encompass outlined breaches and second is for the rescission of the contract and it appears the arbitration tribunal decided to terminate the original lease agreement.

“BCDA must abide by what the arbitration tribunal has ordered and pay the sum of P1.42 billion to us before taking over the property. If they will abide by the arbitration order, it could be over by 90 days,” he added.

Sobrepeña argued if BCDA will continue with appeal of the split decision of the arbitration tribunal on the payment of P1.42 billion in damages and accumulated lease rentals, the whole process of returning the property to the government will take a little longer.

“Until the court order is released to us and until BCDA shall have paid to us the P1.42 billion in rentals, we will remain us the owner of the property.”

He explained the income to be generated from the 118 enterprises, including restaurants, retail and other services, business process outsourcing offices within the property, will be deposited in escrow since the issuance of the arbitration decision, minus personal and maintenance and operating expenses to show their sincerity in complying with the turnover of the facility to BCDA.

On the income generated by the 384 hotel rooms and 85 residential structures, the income will go to the direct owners of the said units.

On the supposed 25 percent share of the city government from the annual lease rentals of the facility, he revealed CJHDevCo will be turning over to BCDA more than P5.4 billion worth of improvements, including new constructions, which BCDA could easily decide on the equivalent share of the city that it could manage and generate income while awaiting BCDA’s decision whether to bid out the property to another interested developer in the future pursuant to Resolution 362, series of 1994 or the 19 conditions imposed by the city government for the development of the former American military base.

According to him, one of the major reasons for their failure to pursue the development of the 18-hectare footprint given to them by BCDA to develop is politics considering that for every administration since the finalization of the contract during the time of former President Fidel V. Ramos, they had to revise the agreement pursuant to the dictates on whoever will be at the helm.

Apart from politics, the CJHDevCo official said in the middle of the game, BCDA suddenly issued an order that no development should be done in areas that are planted with trees when in fact around 50 percent of the developable areas have trees which constrained the pursuit of more development projects.

In terms of CJHDevCo’s commitment to the environment, he revealed that when the developer took over the facility in 1996, there were only 250,000 trees that were planted around the camp but they are now leaving behind some 480,000 trees.

Further, Sobrepeña cited one of their policies for environmental preservation and protection is that structures within the economic zone was built higher than the tallest pine tree in the area, hoping that future developers to be tapped to pursue the development thrust will respect such long standing policy.

“We assure our buyers, locators and sub-lessees that their rights to the properties they acquired and are now using in John Hay will continue to be protected and respected considering that BCDA had full knowledge and consent to the same,” Sobrepeña said.

He branded the issues being raised by BCDA outside the arbitration proceedings as immaterial considering that BCDA was given the opportunity to look into the books and finances of the developer during the arbitration.

By Dexter A. See

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