THE Cebu City Legal Office (CCLO) will launch an inquiry on the destruction of the City-owned Sugbu and Senior Citizens buildings at the South Road Properties (SRP).
Rey Gealon, CCLO head, told Superbalita Cebu that he was given a directive by Mayor Edgardo Labella to look into the legality of the demolition of the buildings. Both structures stood on a lot where the Universal Hotel Resorts Inc. (UHRI) plans to develop the P18-billion Isla de la Victoria—an integrated resort, including a casino--at the SRP and one of former mayor Tomas Osmeña’s pet projects.
The CCLO will coordinate with the Commission on Audit (COA) to check if the procedures in destroying a government property had been followed.
Gealon said COA Circular 89-296 serves as a guide for government offices and private firms before tearing down a government property.
He said UHRI should have checked the provisions stated in the circular before destroying the buildings: the structure must have “no commercial value; is beyond economic repair; there is no willing receiver; and/or the appraised value is less than the administrative cost of sale.”
The COA, he said, is mandated to inspect a government building and check its construction cost to justify its destruction.
Gealon believes the developer failed to follow the procedures set by COA.
“In this case, while the destruction may have been carried out based on contract, UHRI is not exempt from complying with the law. The mayor (Labella) has to protect public interest from unscrupulous maneuvering,” he said.
Based on the contract, the City will receive 10 percent of the UHRI’s rental income. The City will also get two to three percent of UHRI’s annual income, but the City can only reap the financial benefits nine years after the start of the Isla de la Victoria’s development.
Labella earlier disagreed with the contract signed by the City and UHRI during Osmeña’s time, saying the profit sharing was disadvantageous to the City.
Labella said he is not “totally against it” but emphasized the need to review the contract.
“Naa na man na (It’s already there) so we just have to renegotiate it so that the City will have a fair share and the City will not be at a total disadvantage,” he said.
The contract stipulates that UHRI is allowed to operate for 50 years. After the contract’s end, UHRI can renew it for another 25 years. (FROM PAC OF SUPERBALITA CEBU / KAL)