I-LAND Ways Philippines will lease a 1.2-hectare area at the South Road Properties (SRP) for $.50 per square meter every month. That means, a monthly earning of P282,218 for the Cebu City Government.
This will translate to P3.4 million a year, or P85 million in 25 years.
I-land Ways, for its part, will earn around P32 billion for the same period.
The $.50 was set by the committee on awards but with a note that the amount is a floor price, which means that it can go up.
The City Council has set an executive session on the matter.
Councilor Margarita Osmeña, the chairperson of the committee on budget and finance, said the executive session will open more alternatives to deal with the proposal while the contract is being drawn up.
She clarified that there is no objection to the project as three of the councilors under the banner of Bando Osmeña Pundok Kauswagan (BOPK)--Councilors Gerardo Carillo, Richard Osmeña and Noel Wenceslao--co-sponsored the resolution approving the terms of reference.
The other proponents are allies of Mayor Michael Rama—Hanz Abella, Mary Ann de los Santos and Dave Tumulak.
“We want them here because it will be beneficial to Cebu City and the retirement facility is a good project,” said Osmeña.
She attended the formal proposal of I-land Ways last Tuesday. It was presented by its president Kazuhito Matsuda.
Osmeña believes the proposal can be improved with inputs from the City Government, which will make the terms more beneficial to the City but at the same time fair to the Japanese firm.
“We want a win-win solution,” she said.
I-Land Ways will not be invited to the executive session scheduled next month. It will be attended by the Acting City Engineer Jose Marie Poblete, bids and awards committee for infrastructure head; SRP Manager Roberto Varquez; Eustaquio Cesa, city appraisal committee head; Acting City Planning and Development Coordinator Kenneth Carmelita Enriquez; and Atty. Jerone Castillo, City Legal Office head.
Aside from what the City Government will earn in the lease, the project is also expected to help the City in terms of employment and tourism.
According to the presentation of I-Land Ways, the project is aimed to employ about a thousand workers.
The retirement facility will be composed of three buildings with 13 floors each, where an estimated 1,125 Japanese retirees are expected to reside.
“The City of Cebu could generate additional taxes and fees, such as real property tax, business tax, regulatory fees and other charges estimated to be in the tens of millions of pesos,” I-Land Ways’ presentation stated.
According to the company, each retiree is also expected to spend P1,000 a day. This translates to about P33.75 million a month, or P405 million in a year.
I-Land Ways was enticed to invest in Cebu City after attending a retirement summit twice, both organized by the City Government in 2010 and in 2013.
“After visiting the different places in the country, we decided to invest in Cebu City because it is the most ideal place for a retirement facility,” the presentation stated.
Rama and other City officials were also invited by I-Land Ways to visit its facilities in Japan.
The planned retirement facility at the SRP was crafted last September.
The identified site was Lot 7, which is adjacent to Pond A.