Despite Duterte’s distaste, Gatchalian set to rebuild Pavilion with new casino
Hotel magnate William Gatchalian is taking advantage of the fire that gutted his Manila Pavilion to rebuild the landmark hotel and reopen its shuttered casino, despite President Duterte’s pronouncement last month that “there will be no (new) casinos” under his administration.
“We have been working tirelessly towards resuming our Manila operations and are on the path to not merely rebuilding, but transforming it into an even better property,” Gatchalian’s son, Kenneth, said in a report to Pavilion shareholders ahead of next month’s annual meeting.
The redevelopment of the 50-yearold hotel includes a “fully modernized swimming pool and recreation floor, and exciting new dining outlets within a fully-redesigned casino area,” the young Gatchalian said.
Pavilion’s casino license expired last year, losing it to the neighboring Rizal Park Hotel, amid a pronouncement by Pagcor chairman Andrea Domingo that the gaming regulator will not issue any more casino licenses in Metro Manila for five years amid oversupply concerns. The loss of the casino business hit the Pavilion hard. Its occupancy rate shrank last year to 50 percent, and the hotel – the country’s first five-star establishment when the original owners, the Delgado family, opened it in 1968 – ended 2017 with P44 million in the red.
Even before the fire that damaged the lower floors and the casino podium this year, the hotel management had already budgeted P350 million to renovate the building.
“Now that there is a chance to start from a completely new blueprint, we are taking the opportunity to rebuild in a revolu- tionary way,” said Kenneth Gatchalian, who has an architectural degree from the University of Texas.
The 22-story-building itself was mortgaged in favor of the Metropolitan Bank and Trust Co., as trustee for the Singapore branch of the Industrial and Commercial Bank of China, to secure a $15 million loan, which Gatchalian’s son said had been fully paid in March 2016.
The hotel also had managed to overturn the P45.58 million in deficiency business tax liabilities covering 2004 up to 2006, a collection case filed by then mayor Alfredo Lim and which the Pavilion lost before the Court of Tax Appeals.
But a pre-Christmas 2015 compromise with now Mayor Joseph Estrada drastically reduced Pavilion’s liability to only P5.84 million, an out-of-court settlement that the Manila City Council subsequently approved.
With the continued tourist influx and even domestic travel on the rise, the elder Gatchalian was emboldened to borrow P1.7 billion from Lucio Co’s Philippine Bank of Communications late last year to fund the simultaneous renovations of his Cebu and Davao Waterfront hotels.
Money talks
Former San Miguel chairman Andres Soriano III raised over P380 million cash last week after disposing four million shares of the International Container Terminal Services Inc., where he is a board director.
Metrobank chairman Arthur Ty has added another five million Metrobank shares, worth about P368 million, into his pile last month. President Duterte going over the Waterfront
Davao renovation plans presented by hotel The acquisition was
tycoon William Gatchalian “part of intra-group transactions among the Ty Family companies,” Metrobank said, “without any effect on the aggregate shareholdings of the Group.”
The latest transaction brought Ty’s total shareholdings in the family bank to about 9.1 percent, worth nearly P27 billion at last week’s close.
Heard through the grapevine
Salcedo Auctions’ annual bidding to be held at the Peninsula later this month is being threatened to be derailed by a trademark complaint initiated by real estate heir and auction partner Paulo Mortel.
Mortel claims that he co-owns the intellectual property rights to the yearly “The Well Appointed Life” auction that the husband-and-wife team behind Salcedo Auctions, Ramon and Karen Lerma, have allegedly appropriated as their own.
E-mail: moneygoround.manila@yahoo.com