Cebu City Hall gets P224M from developer

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Wednesday, March 26, 2014


FILINVEST Land Inc. (FLI) turned over a check for P224 million to the Cebu City Government last Tuesday but City Hall wants something else.

The amount represents FLI’s amortization for the 10-hectare Pond F at the South Road Properties (SRP), which the property developer bought in 2009.

City Hall is still waiting though for its share of the sales of residential condominium units in another property at the SRP.

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The City Treasurer’s Office billed FLI P803 million representing its 10-percent share of the proceeds from the sale of condo units at a 40-hectare SRP lot. The deadline imposed was March 15.

“I wish that they will be quick enough in paying,” said Mayor Michael Rama. But he declined to comment further, saying he and FLI are “back to our beautiful relationship.”

On time

In a statement sent by e-mail to Sun.Star Cebu yesterday, FLI said it is on time with its payments on SRP. It said the P224 million is its fifth installment for Pond F.
Tristan Las Marias, FLI first vice president for the Visayas and Mindanao, said the company turned over to City Hall last December a total of P1.95 billion.

The amount includes the P309.71 million representing the city’s gross revenue share, part of which is the accelerated payment of the minimum guarantee, and P1.65 billion for Pond F, Las Marias said.

Under its joint venture agreement with City Hall over the development of a residential-commercial complex on a 40-hectare lot at the SRP, FLI is required to pay a guarantee fee every five years.

“While the joint venture terms do not require us to pay this amount at this point in time, in order to assist the City in their funding requirements, we have agreed to accelerate payment of the minimum guarantee,” Las Marias said in a statement.

Revenues

The executive branch of the Cebu City Government identified revenues from the SRP joint venture agreement as among the sources of funds for its budget.

FLI said it hired independent auditor SGV & Co. to review records related to the joint venture agreement.

“The records attest to the fact that we are advanced in our payments,” Las Marias said.

Rama said he had a long talk with the Gotianuns of FLI when he was in Manila last week. He did not give reporters details of what was discussed in the meeting, but said he does not want to strain his relationship with the firm.
Documentation

He said earlier that FLI should tackle the documentation of the SRP payments after paying the billed amount.

But Las Marias stressed that proper documentation of all transactions related to the SRP venture has to be done. “As a publicly listed company, it is our responsibility that any fund releases are properly reconciled and documented by both paying and receiving parties and done in accordance to the joint venture agreement,” he said. (PR)

Published in the Sun.Star Cebu newspaper on March 27, 2014.

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