Filinvest gives up
Is it one down and one to go?
Filinvest Land Inc. officially announced yesterday its decision to “exercise its option to rescind its purchase,” following a public bidding, of a 19.2-hectare lot at the South Road Properties (SRP). The lot is part of the 45.2-hectare SRP property sold by the Cebu City Government in 2015 when Michael Rama was mayor.
It would be interesting to find out how the other buyer, the SM Prime Holdings Inc.-Ayala Land Inc. joint venture, would react to Filinvest’s move. The City has sued SM Prime Holdings for deceit, accusing it of failing to declare all their taxable properties in SM Seaside City. It later sued a branch of Banco de Oro, another SM Group affiliate, for allegedly under-declaring and falsifying its declaration of gross sales.
While those cases may be unrelated to the SRP lot purchase, Mayor Tomas Osmeña has not hidden his intention to force Filinvest, as well as SM-Ayala to let go of the SRP lots. The cases filed against SM Prime Holdings and Banco de Oro are therefore believed to be in keeping with this intention.
Filinvest, in its press statement, didn’t say pressure was exerted on it but merely claimed that the City “failed to comply with several covenants, undertakings and obligations that it was required to fulfill more than a year ago” adding that the City was given “ample extensions but it does not appear that the City will be able to comply within a reasonable period of time.”
That is actually another way of saying the City is finding ways to scuttle the purchase, which Filinvest has obliged. Which is also not surprising considering that among the SRP lot buyers, Filinvest is the weakest link in the chain. It has a joint development venture with the city government in the SRP and is about “to go full blast” with its projects like the 40-hectare City di Mare, also at the SRP. The viability of those projects would be jeopardized with a hostile City Hall.
As Filinvest representatives and officials of the city government “work out the details and processes to consummate the rescission” of the SRP lot purchase, all eyes are on the SM-Ayala joint venture. Will it follow Filinvest’s lead? And this: What will be the effect of this on the image of Cebu City as potential investment destination?