City gives ultimatum to lot renters

BAGUIO CITY – The city government gave renters of city-owned lots who refused to sign the renewal of their contracts after objecting to the city’s conditions until Dec. 31 this year to remove their buildings and improvements from the city’s properties.

This is to give the city a free hand to draw a development plan and bid out the area they occupy “to get reasonable proceeds from the said properties.”

Mayor Mauricio Domogan last October gave this ultimatum in a letter to the lessees of over a hundred city-owned lots mostly located along Kayang and Hilltop streets. Most of these renters constructed buildings on the lots which they use for commercial purposes.

The mayor expressed disappointment that despite lengthy discussions with the lessees, they still refused to accept two terms in the contract – the reckoning date of the new contract which the city insists must fall on January 1, 2016 since the old contract expired on December 31, 2015 and the inclusion of a condition that “after the said period (of lease) all the improvements existing thereon will become property of the city without paying the value of the same.”

The mayor said the effectivity of the new contract must start immediately after the expiration of the old one “to avoid vacuum.”

“It is therefore not negotiable on the part of the city to accept your proposal that the contract will commence to start upon signing of the same. To allow that to happen will be tantamount as allowing you to use the property of the city without any contract and with a measly rental that the City did not agree to. This is not fair,” the mayor wrote.

On the new condition of giving up the improvements after the lapse of the contract, the mayor said it is but fair for the city to impose this term considering that the lessees have been occupying the lots for at least 47 years now with a measly rental that started at 25 centavos per square meter per day and later increased to 75 centavos.

“If it is renewed for another 15 years then the total period that you will be leasing the said property even with an increased rental of 6 pesos per square meter per day will not be less than 62 years,” the mayor said.

“The Build-Operate-Transfer (BOT) law, as amended, has a maximum period of 25 years. You nearly doubled already the 25 years even without an extension of 15 years,” the mayor added.

The mayor recalled that the city committee’s initial stand on the issue was to not renew the contracts so the city can bid them out to get the best offer. However, the renters appealed for the renewal of these contracts for another 15 years and to increase the rental rate to P6 to which the city consented subject to the conditions added.

He said an evaluation of the city treasury office under assistant city treasurer and in charge of office Alex Cabbarrubias showed that some of the buildings have been earning as much as P35,000 a month vis-à-vis their rental payment to the city of only P1,370 a month so that even if they will pay under the new rate a monthly rental of P10,950, they will still have an income of P24,040 per month which the mayor said “is still very advantageous” to these businessmen.

“There is therefore no doubt that even for the period of 47 years that you had been leasing the property with that measly rental to the City, it is very safe to conclude that you had already more than recovered your investments,” he said.

The mayor said the lessees’ rejection of the conditions “clearly means that there is no more renewal of (their) contracts.”

“Since there is no more renewal of your contract, to be fair with you and the City Government, we have no recourse but to respectfully inform you that you are given on or before December 31, 2016 within which to remove your building/improvement on the said property so that the City Government can prepare the master development plan of the said area and bid out the same to get reasonable proceeds from the said property,” the mayor said.

He however said the lessees can participate in the bidding if they wish to./Aileen P. Refuerzo#


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