THE Cebu City Government is now richer by P3.636 billion after it was able to withdraw from the court the consigned payment for a 26-hectare area of the South Road Properties that it sold to a consortium of developers in 2015.
Regional Trial Court Branch 12 Judge Estela Alma Singco allowed the release of the amount, which represents the second, third and final payment of Cebu Holdings Inc., Ayala Land Inc. and SM Prime Holdings Inc.
The payments were consigned or deposited to the court in August 2017 and 2018 while the case on the legality of the sale was ongoing. Filinvest Land Inc. (FLI) had also made a second payment amounting to P2.8 billion in late August 2019 but the City Government did not accept the payment, citing FLI’s move to rescind the contract for the lot sale.
Singco issued the decision to release the payment on Aug. 30, 2019, just days after the City Government filed the motion to withdraw it.
“This is a victory not just for the administration of Mayor Edgardo Labella, but also for the entire Cebu City and its residents because this means the City is liquid and the mayor can fund numerous programs and projects, especially those that he promised during the campaign,” City Attorney Rey Gealon said on Tuesday, Sept. 3, 2019.
Among the projects and services that will be funded, according to Gealon, is the completion of the Cebu City Medical Center, garbage collection and disposal, flood control projects and the traffic problem in the city.
In a related development, the Cebu City Council approved on Tuesday the second supplemental budget (SB2) amounting to P2.5 billion without any revision.
City Treasurer Arlene Rentuza said the source of fund for the SB 2 is a portion of the down payment of the consortium and FLI for the 46-hectare lot it bought in 2015, and not the payments released by the court. (Of the 46 hectares, 19 hectares were purchased by FLI and 26 hectares were sold to the consortium.)
The P2.5 billion SB2 will fund the financial assistance to senior citizens (P455 million), financial assistance to persons with disability (P80 million), state-of-the-art traffic light system (P250 million), medical equipment for CCMC (P300 million), completion of the first three floors of the CCMC (P100 million) and waste water treatment facility (P75 million).
Another P627 million was requested by the Office of the Mayor for lot acquisition for urban poor families, P100 million for site development, P150 million for road projects and P268 million for the construction of a medium-rise building.
The use of the proceeds of the SRP lot sale was approved by the City Council just as former mayor Tomas Osmeña asked the court to stop city officials from doing so.
Osmeña filed on Monday, Sept. 2, a petition for declaratory relief with prayer for a temporary restraining order and writ of preliminary injunction against the sale of the lots to the developers.
Amando Virgil Ligutan, counsel for Osmeña, said among the respondents are the City of Cebu, the City Council, SM Prime Holdings Inc., Ayala Land Inc. and FLI.
Osmeña filed the petition to stop the city officials from using proceeds of the sale, emphasizing that the SRP lot sale is “illegal.”
Ligutan said if the court favors Osmeña, all the city officials involved in the approval of the use of the payment will be held liable and the sale will be considered void.
“Forfeiting the SM-Ayala Consortium’s bid security in favor of the City of Cebu... and other reliefs just and equitable under the premises are also prayed for,” a portion of the petition read.
In 2015, then mayor Michael Rama entered into a contract of sale with FLI and the SM-Ayala Consortium, which Osmeña said was illegal because it was not authorized by the 13th City Council.
On June 4, 2019, the City Council approved a resolution requesting the City Legal Office to file a petition for declaratory relief, which seeks to declare the sale of SRP lots in 2015 void.
When Labella became mayor in July, the council passed a resolution authorizing him to withdraw the petition.
Also during the session on Tuesday, Councilor Nestor Archival, an ally of Osmeña, proposed a resolution through a privilege speech to stop the use of the SRP lot sale proceeds, while the petition that Osmeña filed on Monday is still pending.
On a 10-7 vote, however, the council voted against Archival’s resolution. Association of Barangay Councils President Franklyn Ong abstained from voting. FROM PAC OF SUPERBALITA CEBU/ JJL / LRC