Baguio gov’t mulls charges vs BCDA-JHMC over John Hay

‘Stop barring projects in barangays’

BAGUIO CITY – The city government is mulling to file charges against the  Bases Conversion Development Authority and John Hay Management Corp. for allegedly not following terms and conditions of 19 conditions imposed by the city over stewardship of Camp John Hay here.    

This, as top officials of BCDA and JHMC were urged by city officials to stop barring implementation of government projects and entry of construction materials in barangays here within John Hay.

The city council adapted a resolution last week after heads of barangays complained against BCDA-JHMC’s restrictions which they said affected development programs of their communities.

The punong barangays complained of allegedly harsh treatment they are receiving from BCDA-JHMC including their security force which maintained intimidating presence despite previous appeals by residents.

They decried BCDA-JHMC’s “irrational restrictions” on entry of construction materials and implementation of infrastructure projects programmed for the barangays even if these were justified.

Councilor Betty Lourdes Tabanda said BCDA and JHMC should not restrict projects especially if these were legitimate.

The body in another resolution requested mayor Mauricio Domogan to immediately act with dispatch on complaints of punong barangays and to reiterate that BCDA-JHMC comply with 19 conditionalities set under Resolution 362, series of 1994 which included segregation of all 13 barangays from the reservation.

The body also moved on motion of Councilor Fred Bagbagen to relay concerns raised by barangay heads to JHMC and to city legal office to study the possibility of filing a case in relation to the conditionalities.

The city has often appealed to the BCDA-JHMC to honor the conditionalities amid its “blatant disregard” of the same particularly its refusal to allow its locators to secure building and business permits from the city government, failure to provide its own water source, segregate the 13 barangays from the reservation and remit the city’s shares from the lease rentals under the present administration.

This, as mayor Mauricio Domogan said not one of two parties can claim victory in the decision rendered by the arbitral court on the BCDA and Camp John Hay Development Corp. (CJHDevCo) case as the city government stands to be the biggest loser with the looming non-collection of its supposed share from the lease of the former military reservation.

In the ruling dated Feb. 11, the Philippine Dispute Resolution Center Inc., finding “mutual breach” of the agreement by both parties, rescinded the original and derivative lease agreements and ordered the CJHDevCo to cede the leased premises to BCDA while in turn directing the BCDA to return to the CJHDevCo the rental payments it made totaling P1,421,096,052 and further  cleared CJHDevCo from its liability to pay its arrears amounting to P3.3 billion.

But according to the mayor, the city suffered the biggest blow as it may now be totally deprived of its 25 percent share from the lease rentals which it had demanded for so long and which it could have used to fund priority projects.

The mayor however said that the city will not give up and will watch out for post-decision developments so it can accordingly to assert its rights based on the 19 conditionalities it set on the Camp John Hay development once the decision becomes final.

BCDA had sought the payment of CJHDevCo’s arrears and botched negotiations between the two parties led to the arbitration by the courts.

The mayor also took exception from the BCDA’s claims that the city did not do its part to help in the efforts to collect the unpaid rentals.

“Records would bear us out that we were not negligent and we tried our best to reach out to both the BCDA and the CJHDevCo even before they decided on the arbitration.  We sought them out and tried to convince them to settle the conflict amicably but they refused,” the mayor said.

In 2012, Domogan on a number of occasions tried to broker a diplomatic settlement for the two parties urging them to sit down and negotiate out-of-court. He suggested that the two, based on the terms of the contracts they have entered, evaluate and determine the obligations that each failed to deliver, quantify in monetary value and compensate each other under a compromise agreement.

“Sana kung nakinig sila, hindi sana nagresulta sa ganito,” he bemoaned.

The city stands to collect 25 percent share of the arrears being collected pursuant to the conditionalities under Resolution No. 362, series of 1994.

The original agreement pegged the lease rental at P425 million annually for the first five years starting in 1996 and P150 million annually thereafter and the city’s share from the rental was supposed to be 25 percent or P106 million for the first five years and P35,500,000 for the succeeding years. However, the lease agreement was restructured in 2000, 2003 and in 2008.

Meanwhile, the BCDA-JHMC met owners of business establishments who entered into contracts with CJH Development Corp. in the former American military facility to thresh out their concerns.

BCDA president and chief executive officer Arnel Paciano D. Casanova said “the rights of the victims (tenants) of CJHDevCo cannot be taken cognizance of unless they lay a claim against DevCo and make it account for the payments they have made.”

The arbitration committee came out with its decision on Camp John Hay earlier, rescinding the lease agreement between BCDA and CJHDevCo. With the original lease rescinded, the contract that CJHDevCo entered into with its buyers no longer applies and their subleases are terminated with the principal lease, according to Casanova.

“There was a deliberate concealment on the part of CJHDevCo of the contracts it had entered into and the payments it had received. We are still in the process of determining the enormity of the undisclosed sales,” Casanova said.

In a meeting with investors in Manila last week, the BCDA requested locators of CJHDevCo to provide it with a record of their lease contracts, payments and other relevant documents so that it can start an inventory and determine how to proceed. CJHDevCo sold 50-year leases to the victims despite having only a 25-year lease on the property.

The members of the arbitration committee were unanimous in ordering Sobrepena’s CJH Development Corp. to vacate Camp John Hay and return it to the BCDA in “tenantable” condition.

The BCDA said CJHDevCo should pay the government firm P2.4 billion obligation that it reportedly admitted to owing the state run firm in 2008.

CJHDevco executives however said they will leave if the BCDA would pay them P1.42 billion as ordered by the arbitration committee. It is a standoff to date.

– With a report from Aileen P. Refuerzo