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Ayala to invest P6b in contentious Bacolod lot

by Jenniffer B. Austria
[] July 19, 2011

Ayala Land Inc., the property unit of conglomerate Ayala Corp., said Monday it will invest P6 billion to develop a 7.7-hectare property in Bacolod City into a mixed-use center.

Ayala Land said in a disclosure to the stock exchange the provincial government of Negros Occidental awarded to the company the right to purchase 3.66 hectares of the capitol’s property and lease 4.04 hectares for 50 years.

“An investment of approximately P6 billion is estimated for Ayala Land for the planning and construction of an integrated mixed-use civic and commercial center that will combine the center of government with commercial and residential uses, making the growth center of Metro Bacolod and Negros Occidental—the Capital Civic Center—one of a kind convergence of business community and government,” Ayala Land said.

“The proposed development will be consistent with the vision of developing the provincial capitol property in a manner that will realize and uphold the sustained cultural, civic and economic ideals of the provincial government and of the entire province of Negros Occidental,” it added.

SM Prime Holdings Inc., the country’s largest shopping mall operator and developer, is contesting the award of the property to Ayala Land.

SM Investments Corp. vice chairman Tessie Sy-Coson said in an earlier interview that the SM group submitted the highest bid for the Bacolod property.

SM Prime lawyer Vince Bayhon said in a statement issued over the weekend the negotiated sale initiated by provincial government was invalid, citing a pending injunction filed against the governor and members of the committee on awards and disposal of properties with a Bacolod regional trial court.

SM Prime said in the petition that it submitted a far more superior bid from that of Ayala Land in the July 7 bidding, which was later declared a failure after the two companies allegedly submitted bids below the appraised value of the property.

The awards committee only disclosed the appraisal value of P19,500 after the actual bidding.

SM Prime offered to purchase portions of the property at P18,885 per square meter and lease the remaining portion at P65 per square meter, or well within the price set by the awards committee.

SM Prime claimed that Ayala Land submitted a bid that effectively offered to purchase the property at P17,000 per square meter and a lease arrangement of P50 per square meter.

Bayhon said SM Prime’s non-participation in the negotiated transaction Friday was prompted by the requirement imposed by the awards committee for the participants to issue an undertaking that no legal action would be initiated against the committee and the provincial government by the aggrieved parties.

“SMPH did not lose by default, and our interest in the project remains,” Bayhon said.

“The alleged floor price or appraisal value was never disclosed during the public bidding, even after the sealed bids of both parties were opened and read aloud. The belated disclosure of the floor price the next day was a mere afterthought and done with bad faith to deliberately provide an excuse for the committee’s rejection of SMPHI’s bid,” Baylon said.

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