Filinvest Land Inc. (FLI) has turned over around P1 billion to the Cebu City Government as the latter’s share from the joint venture agreement (JVA) over a development in the South Road Properties (SRP).
While this developed, Councilor Joel Garganera said he is hopeful that the City will get more as FLI is set to develop the remaining areas of the SRP that is subject to the JVA.
Tristan Las Marias, Filinvest senior vice president for Visayas Mindanao cluster, said the money that they remitted to the City is already the second tranche of the latter’s share of the JVA.
The P1 billion represents the fixed minimum guarantee fee for Phase 1 of their JVA.
FLI has already completed Phase 1 of the JVA that includes the Sanremo and Amalfi properties which consist a total of 10 residential buildings that are all ready for occupancy.
Under the JVA, FLI is bound to turn over a minimum guarantee fee to the City for its share of the condominium sales for the first phase of the development, or 10 percent of its sales receipt, whichever is higher.
The first phase was to be completed five years after the contract took effect, which was in 2009, which means that FLI first remitted to the City its share in 2014 yet.
Mayor Tomas Osmeña received the payment on Friday, Feb. 15 along with Acting City Treasurer Arlene Rentuza.
Rentuza said the City got P904,800,000.00 as net amount of its share.
“Our net is lesser than P1 billion because we already deducted the taxes,” she said.
In 2009, FLI penned a JVA with the City Government to build several medium-rise residential buildings in a 40-hectare lot in the SRP.
Since the signing the of the JVA, FLI has already completed the land development in the area and established the major road networks within the 40-hectare property.
In an interview, Osmeña said that under the JVA, the City is assured that it will get a share.
“If they increase the price, we get 10 percent. Under a conventional joint venture we just get a share. If they decide to put more floors, we get 10 percent, it’s not that price per square meter. They cannot sell land, they can only sell units. Whether they make profit or not, it doesn’t matter, we get percentage of the share,” the mayor said.
But for Garganera, the City should maximize its share out of the remaining two phases that FLI will construct.
“For the record, for the 20 hectares the City only earned P2 billion for the last 10 years. My question is whatever development (is done) in phase 2, is the City entitled for the 10 percent share?” he said. (RVC)