THE Cebu City Government will now proceed with the sale of a City-owned lot on Salinas Drive in Barangay Lahug to Hotel Asia Inc.

The Commission on Audit (COA), in a reversal of a previous ruling, disapproved last April the 2005 deed of exchange between City Hall, through then mayor Tomas Osmeña, and Felix Gochan and Sons Realty Corp.

This is the second time the COA changed its mind on the issue.

“We are very happy with this decision. There are no more questions as to whether we can sell the property or not. There is no more legal impediment to proceed with the sale,” said City Legal Office chief Atty. Jerone Castillo yesterday.

“This really means that the City retains ownership of the property and we have ever reason and every legal right to proceed with the sale,” he added.

In 2009, COA disapproved the exchange of Cebu City’s Lot 917 (2,357 square meters) for two properties of the Gochans in Barangays Guadalupe and Lorega (8,637 square meters combined).

COA pointed out that Lot 917 was worth P20.1 million more than the Gochans’ properties. It was pegged at P44.78 million while the two properties that were supposed to be exchanged for it were valued at P24.64 million.

Public uses

The Gochans filed a motion for reconsideration. They said that while the market value of their properties was much lower, they had already lost close to P109 million in rent from 1970 to 2009 because the properties were used for public service.

Their property in Banawa houses a part of the Banawa Elementary School, while the property in Lorega has been declared as a socialized housing site.

The Gochans also filed a supplemental motion for reconsideration, saying that the rental losses had ballooned to over 161 million.

In June 2011, COA through then Commission Secretary Fortunata Rubico issued a notice of finality of decision.

Gochan said, though, that the decision was not final yet because their supplemental motion for reconsideration remained unresolved. In December 2011, a second supplemental motion was filed by the Gochans.

But relying on the notice from COA, the City held a bidding for Lot 917 and awarded the property to Hotel Asia, the lone bidder, in December 2013. Its bid was P83.6 million.

2014 twist

In January 2014, Hotel Asia deposited more than P46 million as partial payment to the City.

But in June last year, COA rendered a decision that considered the Gochans’ supplemental motions for reconsideration.

COA also approved the 2005 deed of exchange because of the feared displacement of the school and socialized housing site.

This time, it was the City that filed a motion for reconsideration.

Now, COA Officer-In-Charge Heidi Mendoza and Commissioner Jose Fabia, in an April 2015 decision, have granted the City’s appeal.

They said that the supplemental motions should have not been given due course, because these were “a mere rehash” of the issues raised during the 2009 and 2011 decisions.

Upholding the 2009 and 2011 decisions, Mendoza and Fabia said that COA is disapproving the deed of exchange because of the disparity in the properties values.


They also said the rental losses allegedly incurred by the Gochans cannot be considered, in the absence of any contract showing that the City was liable to pay.

As for the feared displacement of the school and the housing program, Mendoza and Fabia said that finding was “premature, if not baseless.”

“It did not take into consideration the State’s inherent power of eminent domain. The government can still preserve and protect the welfare of the poor and the youth by acquiring Gochan’s properties by expropriation,” they added.

With this, COA said that the City acted within its rights when it decided to dispose of the Salinas property by awarding the sale to Hotel Asia.

The transaction is yet to be consummated, though, because the Cebu City Council is yet to authorize Mayor Michael Rama to sign the contract with Hotel Asia.

Castillo said yesterday he will furnish the mayor and the council with copies of the COA decision.