Posted on June 30, 2013 10:38:04 PM [ BusinessWorld Online ]
THE BASES Conversion and Development Authority (BCDA) is considering various options to settle its row with the city of Taguig on the use of the Bonifacio Global City area which SM Aura Premier now occupies, including outright payment for the land, the head of the agency said in a recent interview.
“One of the options we are looking at is to get Taguig to buy the land so BCDA will be able to get just compensation and the soldiers get what they deserve. Essentially SM [Prime Holdings, Inc.] can advance payment to Taguig,” BCDA President Arnel Paciano D. Casanova said.
Asked on the estimated value of the land on which the mall now sits, Mr. Casanova replied: “P5 billion.”
Neither the city of Taguig nor the SM group would comment on the development, with the city’s public information office saying the Office of the Mayor had yet to receive a formal proposal and SM Investments Corp. (SMIC) -- the parent of SM Prime -- insisting the issue was between BCDA and the local government.
“BCDA has to negotiate with Taguig which is SM’s landlord. SM is just a lessee of Taguig’s land,” Corazon P. Guidote, SMIC vice-president for Investor Relations, replied via text when asked for comment.
BCDA ceded the area concerned to Taguig City in 2008 as part of a 2004 settlement of another land issue between the two parties. Consequently, Taguig City now owns the title to the land.
The agency now argues that building a mall on the land violates Republic Act (RA) 7917, which amends Section 8 of RA 7227, or the Bases Conversion and Development Act of 1992, to read in part: “Approximately 40 hectares of land in Fort Bonifacio, Phase I, shall be retained as national government and local government centers, sports facilities and parks...” and the deed of conveyance between BCDA and Taguig City in January 2008 which states the land should be used for local government centers, sports facilities and parks.
SM Prime won the auction the Taguig City government conducted in 2007 to develop the land.
Mr. Casanova said SM Aura Premier cannot be considered a civic center because public areas of the facility like the rooftop park are “not open anytime to the public.”
He added that BCDA and its “constituents” -- soldiers -- have not benefited from the current situation.
RA 7227 provides, among others, that proceeds from the sale of portions of Metro Manila military camps shall be used partly to finance the transfer of military camps and the construction of new ones; the self-reliance and modernization program of the Armed Forces of the Philippines (AFP); concessional and long-term housing loan assistance and livelihood assistance to AFP officers enlisted men and their families; as well as rehabilitation and expansion of the AFP’s medical facilities.
Hence, Mr. Casanova said, payment for the land on which the mall now stands is one way by which “each one’s interest can be met.”
In an interview last June 12 with ABS-CBN News Channel, a counsel of SM Prime had stressed that it is Taguig City that now holds the title to the land and that the same 2008 deed of conveyance provided, among others, that “BCDA shall not place any restriction on the land use or zoning specified” in the settlement.
SM Aura Premier, which has a gross floor area of 234,892 square meters, is SM Prime’s 47th mall. It incorporates office towers, a chapel, a convention center, and mini-coliseum, among other features.
SM Prime grew its net income by 15% to P2.79 billion in the first quarter from P2.43 billion the previous year. Its shares closed at P16.30 apiece on Friday last week, flat from their Thursday finish. -- E. N. J. David