CITY officials last Monday took stock of the local government's rights over its properties and business interests, initially focusing on Block 3 of the Hilltop Market and the lease of the so-called "burned area" along Magsaysay Avenue by Jarco Development Corp. in 1989.
City treasurer Thelma Manaois raised the issue of the city's having exempted Jarco from paying land tax over the 5,589 square-meter commercial lot where the Center Mall now stands.
The lot, subject to a 30-year lease, was then referred to as "the burned area" after the rows of commercial establishments originally occupying the same were gutted by a fire the 1970s. The area includes Lapu-Lapu St., the then short and notoriously popular road flanked by liquor bars.
As per the original contract, Jarco Realty and Development Corp. was to pay real estate taxes on the lot on which it built the mall. That provision, however, was changed in the amended contract of lease dated Feb. 15, 1996, to read: "The taxes on the building and other improvements shall be paid by the Second Party (Jarco)."
In response to Jarco's query, the city council adopted in March, 2008 Resolution 126 which reiterated that "Jarco Realty and Development Corporation shall be liable for the payment of real property tax on the building only and not to pay real property taxes on the leased lot."
Manaois said payment of land realty tax by the "beneficial user" is mandated by Republic Act 7160. She also asked whether an ordinance or resolution can amend the same.
"Why exempt?," city budget officer Leticia Clemente asked, saying the land tax should be reconsidered for enforcement to improve the city's revenue-generation capability.
The mayor agreed, noting that "as beneficial user, they (Jarco) must pay," He, however, said the city came up with a resolution limiting payment of the realty tax on the building, noting "it's a waiver on the part of the owner."
City officials are set to discuss the issue with officials of Jarco, together with the transfer to the corporation's management f a remaining portion of the lot also covered by the lease.
On Block 3 of the Hilltop Market, mayor Domogan posed: "Who distributed the spaces to the occupants?" He called for an investigation, saying the area was "a gold mine" and that the city was "dehado" or at the losing end as unscrupulous people are illegally collecting "rentals" for use of the spaces.
The illegal scheme will soon end as the city is bidding out the spaces and will construct a hangar-type market in the controversial area, Manaois said.