CEBU

Tell It to SunStar: Explaining BIG deal

MANDAUE City did the unthinkable, It ordered and implemented the closure of a completely legimitate and honest-to-goodness business in Mandaue. The BIG Hotel group.

As the Chief-of-Staff Mayor Jonas Cortes at present and during the time of the lease and assignment in 2012, I wish to clear this issue once and for all since there have been a lot of misleading statements which have been aimed to malign our administration of Mandaue during that time.

To understand this issue, we need to view in thru the lens of history.

Mandaue City and Katumanan Hardware entered into a contract of lease in the year 2007. This contract was renegotiated in the year 2012 to extend the term of the lease which was precipitated by the City’s master plan to reinvigorate the Mandaue City South Point and Mantawi International Drive to be the new entertainment and commercial district of Mandaue City and the lessee’s desire to infuse additional capital investment for business expansion.

In fact, in the year 2012, Mantawi International Drive was a veritable “dead zone,” apart from Parkmall’s conservative development during that time, the lessees of the City in that area only operated van-yards, bodegas and warehouses. By 2012, the following businesses heeded the call of the City to renew their contracts and invest in the targeted commercial zone: 1) Seaboard Realty, which constructed and operates City Time Square, City Time Square 2 and Maroo Arcade; 2) Ong-Kin-King Dev’t Corp, which is constructing and developing Jamestown Lifestyle Strip; 3) Seaboard Realty, which subleased M02 Expanded Entertainment Complex, Westown Lagoon Resort Hotel and The Market sa Sugbo Merkado; 4) Cebu Oversea Hardware Inc., which constructed and expanded Parkmall; 5) And Katumanan Hardware and Cenore which built Big Hotel.

Among the renegotiated provisions of the new lease with Katumanan Hardware was the requirement to invest an additional P60 million in commercial structures to compliment the entertainment and commercial district spatial plan. The lease was also extended for an additional 25 years in order to allow a reasonable period for the return of investment of the lessee. Further, the contract likewise contained a right by the lessee to assign the entire lease to a subsidiary or an afilliate with written approval of the City.

The Sangguniang Panlungsod (SP) of Mandaue authorized the mayor to sign the renewed contract of lease with Katumanan Hardware and after the execution by the parties, said contract was ratified by the SP. In 2013, lessee Katumanan Hardware decided to assign the lease since its line of business is in the hardware and construction supply and it neither had the capability nor the experience to operate a commercial real estate business. Said assignee was Cenore Corp.

A deed of assignment was executed by Katumanan Hardware in favor of Cenore Corp. for a consideration of P25 million to be paid to Katumanan Hardware for the transfer of rights.—ATTY. JAMAAL JAMES R. CALIPAYAN


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