BCDA, lessee ‘war’ over Camp John Hay escalates

BAGUIO CITY – The “war” between the Bases Conversion Development Authority and its lessee, the Camp John Hay Development Corp. has escalated with the BCDA saying the Sobrepena-led CJH DevCo was only using the courts to evade payment of their lease arrears, which has reached P3 billion to date.

BCDA president and chief executive Arnel Paciano Casanova said the Sobrepena-led CJHDevco has been filing cases in court to evade payment of their debts for leasing 247 hectares of the John Hay Special Economic Zone.

This was after Baguio Regional Trial Court Judge Mona Lisa Tabora issued a status quo order to both BCDA and CJHDevCo until she comes up with a decision on the case.

However, CJHDevCo has denied claims it was using the courts to escape its financial obligations, saying it only had done so to prevent the government’s BCDA from carrying out an illegal takeover.

Alfredo Yniguez, CJHDevCo operating vice president and chief executive officer, said the BCDA should just wait for the decision of the court and should stop crucifying the developer in the media so that it could justify its planned takeover of the former US rest and recreation facility.

Casanova said, “BCDA is confident the courts will issue a fair decision, because it is the city of Baguio that will be on the losing end of the ongoing impasse if CJHDevco’s financial obligations remain unpaid.”

“We simply have no choice but to resort to the protection of the court,” Yniguez, said in explaining the company’s decision to go to seek a permanent restraining order against the planned BCDA takeover.

Judge Tabora stated during the hearing that she will not grant CJHDevco a writ of preliminary injunction if the lessee will only use this as an excuse to evade paying obligations to government.

Tabora added she disagreed with CJHDevCo’s allegations that BCDA was in breach of the contract because of the Supreme Court ruling nullifying tax incentives in the economic zone. She said the ruling was beyond BCDA’s control, so it cannot be construed as a breach on BCDA’s part.

BCDA external counsel Demetrio Custodio explained that the SC ruling was eventually cured by the passing of Republic Acts (RA) 9399 and 9400, two laws that granted tax amnesty to John Hay locators and restored tax incentives in the economic zone.

CJHDEVCO, which has poured in close to P3 billion in projects since it won the bid to redevelop John Hay in 1996, has been locked in a dispute with the BCDA over its decision to suspend lease payments as a result of a 2003 Supreme Court decision that took away the area’s special economic zone benefits that, in turn, affected the company’s development plans.

According to Yniguez, the firm, which is behind the Camp John Hay Manor Hotel, the Camp John Hay Suites Hotel and the Camp John Hay Golf Club, had actually agreed to comply with its obligations under a debt structuring arrangement with BCDA on the condition that the state-owned firm would set up a One-Stop Action Center to facilitate the issuance of permits and other requirements within 30 days.

“We are being required to comply fully to a financial obligation which compliance by us would only be rendered doable or possible if BCDA does not breach its obligations,” Yniguez said, adding that CJHDevCo had to suspend its lease payments because BCDA reneged on its own obligations by failing to act on their request for permits within the agreed period.

Yniguez also took exception to BCDA claims that it has only been CJHDevCo that has been complaining about the issuance of permits and that there have been no issues about from other locators such as Ayala Land Incorporated, the Asian Institute of Management and the Intercontinental Hotel Groups.

Records show that the OSAC has been issuing more than 80 permits a year. In 2011 alone, it issued a total of 89 permits to CJHDevCo and other locators.

Reports also show that only CJHDevco is complaining about the permits. Other locators within the JHSEZ, including Ayala Land Inc., the Asian Institute of Management and Intercontinental Hotels Group, have not echoed CJHDevco’s complaints against the BCDA.

“CJHDevco has pending permits, but that doesn’t mean the OSAC isn’t operational,” Casanova said, adding that BCDA cannot grant CJHDevco’s demands for the issuance of permits if they lack the documents needed to process the permits. Moreover, the lessee’s demand for permits to cut and earth ball more than 1,000 pine trees in John Hay is a function not delegated by the Department of Natural Resources and Environment.

“How can the Intercon Hotel Group and AIM file complaints against BCDA when these two entities are operated by BCDA itself?” Yniguez asked. “Ayala Land will also not complain because unlike CJHDevCo, it is able to secure its permits from BCDA within 30 days as claimed by BCDA chairman FelicitoPayumo himself.”

“How come mere sub-locators like Ayala Land, get their permits on time from BCDA, while the principal locator, CJHDevCo, is subjected to late issuance of permits? Yniguez also asked.

“The way things are, CJHDevCo is deliberately being set up by BCDA to fail so that it could easily justify its planned takeover,” Yniguez said, adding that company had no choice but to bring the issue for arbitration by the Philippine Dispute Resolution Center in December and later to seek protection from the Baguio Regional Trial Court to avert a BCDA takeover attempt.

Tabora said that this case is a unique one and might exhaust most of her working hours. She said that she had to pore through six inches of claims and counterclaims presented by the two counsels.