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Sale of Baguio Convention Center stalled

[ manilastandardtoday.com ] June 30, 2011

The state-run Bases Conversion and Development Authority said non-payment by Camp John Hay Development Corp. of rental obligations has stalled the efforts of the Baguio City government to purchase the Baguio Convention Center from the Government Service Insurance System.

BCDA vice president Dean Santiago, said that agreements between the state pension fund and city hall had been finalized in 2003 and 2004.

As stipulated, the funds to buy the P250-million center will come from the city government’s 25 percent share of lease rentals which BCDA is able to actually collect from Camp John Hay, according to Santiago.

He noted further that under the agreement, BCDA would directly remit to the GSIS, the share of Baguio City from actual rental payments of Camp John Hay for the payment of the Baguio Convention Center.

On record, BCDA made a P50 million downpayment to GSIS on Feb. 11, 2004, and another P50 million on Sept. 3, 2008 for the property.

Santiago said Camp John Hay’s failure to pay rent to BCDA has put in jeopardy Baguio City’s chances to acquire the 10,000-square meter property consisting of the convention building and facilities, the lot and an adjoining parking space.

“CJHDevco’s refusal to pay its rental obligations to BCDA is prejudicial to the people of Baguio City,” Santiago said, adding that CJHDevco has P2.4 billion in restructured arrears plus P382 million of unpaid lease due from December 2009 to June 2011.

He said the non-payment of rentals has resulted in the city government’s failure to make the annual payments to GSIS, causing interest charges to balloon to P128 million.

Santiago said total obligations for the Baguio Convention Center property stood at P328 million, consisting of P200 million for the principal and P128 million in interest.

But he said the balance due GSIS was now P218 million after BCDA recently remitted to the GSIS P60 million, waiving interest charges of P50 million.

“BCDA is committed to remit to the GSIS the remaining balance from the actual collections it receives from the CJHDevco until the Baguio Convention Center property is fully paid,” Santiago said.
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