Monday, January 05, 2009 City Hall hopes to make P2M a month from lot
SINCE the land swap talks with the Province are already dead, the Cebu City Government is preparing to lease out the 3.4-hectare North Reclamation Area (NRA) lot that it was supposed to turn over to the Capitol.
Lot Block 27 A, which was assessed to be worth P415.35 million in 2006, will be leased for the same price as the South Road Properties (SRP) lots.
City Administrator Francisco Fernandez said at least three parties have submitted proposals for a 10-year lease agreement, which Acting Mayor Michael Rama referred to
him for review.
The lease of the City-owned property across the Cebu Port Authority compound will be done through a bidding.
The lease agreement, if finalized, could mean additional income for the City for basic services, not only through lease payments but also through business taxes.
Based on the floor price of SRP lots for lease arrangements, the NRA lot could earn for the City up to P2,361,590 a month.
“There is an offer to lease the property for a 10-year period, so why not? It’s an idle property anyway and we’re not getting anything from it. But if we lease it, we can earn from the lot and there’s also business taxes that we can collect from the businesses that will operate there,” Fernandez told Sun.Star Cebu.
Mayor Tomas Osmeña first offered Block 27 A to the Province in July 2004 in exchange for the latter’s 435,991-square-meter properties, worth some P3 billion, in 11 barangays covered by Provincial Ordinance 93-1.
Along with the Cebu City Medical Center, Block 27 A was part of the land swap agreement between the City and the Province. The deal was aborted, resulting in strained relations between the two local governments.
“The issue is the land swap but the way things are moving, nobody is talking about swapping anymore. The swapping seems to be dead already... so we studied the lease offer where three parties offered to lease it for the same rates as SRP,” Fernandez said.
The floor price for the lease of SRP lots is P70 per square meter per month for lots located within 80 meters from both sides of the South Coastal Road and the Mambaling Access Road.
All other lots outside Pond F and the 80-meter area from the coastal and access roads are considered non-prime properties and will be leased for P28 per square meter per month.
Fernandez said that in the report he will submit to Rama this afternoon, he will leave it to the City Council and other decision makers to decide whether the entire property will be leased as a whole or as subdivided lots.
“How it would be leased would depend on how it would be developed. What the decision makers will have to decide on is whether we would subdivide the lot or lease it as a whole. The property will not be sold because we’re focusing on the SRP for the sale. Besides, the offer is not to buy but to lease,” he said.
Among the interested parties are a tire company and a Cebuano-owned grocery chain. (LCR)
