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Legal row could hound mall

Posted on May 19, 2013 10:36:53 PM [ BusinessWorld Online ]
LEGAL QUESTIONS could hound the development of the latest commercial center of SM Prime Holdings, Inc., as a state firm mulls options to address what it claims is illegal use by the mall operator of its land.
The Bases Conversion and Development Authority (BCDA) said over the weekend that it will fight a temporary restraining order (TRO) issued on Thursday last week on its move to block construction of a road linking SM Aura Premier, which opened in Taguig City that same day, to McKinley Parkway in the Fort Bonifacio area.
The state firm also alleged in a statement that use of the land on which SM Aura stands for commercial purposes is itself illegal.
“SM occupied the property forcibly after its request to construct was denied by BCDA. Despite being denied a permit by the proper authorities, they (SM Prime) still proceeded with utter impunity and disregard of the law,” Arnel Paciano D. Casanova, BCDA president and chief executive officer, said in a statement e-mailed to reporters over the weekend.
In its statement, BCDA said it sent SM Prime a letter, dated April 3, rejecting the mall developer’s request to build the road, and another letter early this month asking the same company to “cease and desist” from proceeding with the digging.
Taguig City government was able to secure last May 16 -- the day of SM Aura’s opening -- a TRO from the Regional Trial Court of Taguig that blocked BCDA’s move.
“They did not succeed when BCDA questioned their (SM Prime) action because of lack of legal authority, so they went to the court to get that TRO,” Mr. Casanova said in a text message.
“BCDA, in the exercise of its duty as steward of that property, filed an opposition to the TRO but complied nonetheless with the order,” he added.
“[W]e are fighting the TRO. We are doing this on behalf of the Armed Forces of the Philippines (AFP), who should be the beneficiary of the commercial use of Bonifacio Global City,” he continued, citing various legal bases, including Republic Act (RA) No. 7917 -- which amended RA 7227, or the Bases Conversion and Development Act of 1992 -- and RA 10349, or the AFP Modernization Act.
In arguing that the planned road is illegal, BCDA particularly cited the part of RA 7917 stating: “Approximately forty hectares of land in Fort Bonifacio, Phase I, shall be retained as national government and local government centers, sports facilities and parks…”
Going further, Mr. Casanova noted in the statement that SM Aura stands on land donated by BCDA to Taguig City, saying: “Instead of bidding out the land and remitting the proceeds to the AFP for its modernization, we turned over this land so it can be put to good civic use.
“Instead, both the AFP and the people of Taguig are being deprived by the illegal construction of this commercial complex,” he argued.
Mr. Casanova explained further in his text that “[t]he donation is with a condition that it will be… for institutional use as a government center and parks which Taguig and SM clearly violated; we simply want that the law be complied with.”
SM Prime won an auction Taguig City staged in 2007 to develop the land concerned.
Asked if BCDA wants to take back control of the land on which the new mall stands, Mr. Casanova replied: “We are exploring all legal remedies available to the government.”
Sought for comment, Corazon P. Guidote, senior vice-president for Investor Relations of SM Prime parent SM Investments Corp., sidestepped the issue, replying via text that “[t]he dispute is between the City of Taguig and BCDA.”
SM Aura, which has a gross floor area of 234,892 square meters, is SM Prime’s 47th mall in the Philippines. It incorporates office towers, a chapel, a convention center, and mini-coliseum, among other features.
Shares of SM Prime, which expects to end this year with 48 malls in the Philippines and five in China, lost 55 centavos or 2.66% to P20.15 apiece on Friday last week from P20.70 each last Thursday. -- Emilia Narni J. David

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