THE Filinvest Consortium said it has decided to exercise its option to rescind its purchase of a 19.2-hectare property in the Cebu South Road Properties (SRP) won through a public bidding in June 2015.
The announcement came a day after Cebu City Mayor Tomas Osmeña said last Sunday Filinvest will rescind the contract it signed with the city government to purchase 19.2 hectares of land at the SRP.
The contract was signed during the time of former mayor Michael L. Rama, who lost to Osmeña in the May 2016 polls.
Filinvest said the city of Cebu failed to comply with several covenants, undertakings and obligations it was required to fulfill more than a year ago.
Filinvest said it has given the city ample extensions, but it appeared unlikely the city would be able to comply within a foreseeable reasonable period of time.
Filinvest has decided to rescind the purchase pursuant to Section 5.7 of the sale document.
In a meeting held on Monday, Osmeña said he had no objection to the joint letter to rescind sent by Filinvest. He has tasked city officials and Filinvest representatives to work out the details and processes to consummate the rescission.
Filinvest expressed its continued commitment to Cebu. The company is going full blast with its projects, including joint ventures with Cebu City and Cebu province.
Among these is the ongoing development of the 40-hectare City di Mare, a joint venture with Cebu City located in SRP. Currently, the Filinvest group has existing and planned developments in Cebu covering residential, commercial, hospitality and office-building projects totaling over P20 billion.
Aside from interposing no objection, Osmeña also welcomed the decision of Filinvest, as this meant the city no longer needs to file a case in court to have the contract revoked, as well as the contract with SM-Ayala Consortium for the purchase of 26 hectares of land at SRP.
When the city signed the deed of sale, the city hall was to turn over documents, like titles of the property within six months after the signing, and after Filinvest and the SM-Ayala Consortium paid the initial half of the purchase amount.
The city reportedly failed to honor this agreement despite having already received P8.3 billion, equivalent to half of the total amount of purchase.
The remaining balance of the sale was agreed to be paid on a staggered basis within the next three years.
Osmeña earlier said the sale, conducted through a public bidding, was highly questionable, which was why he was planning to bring the matter to court to have the contract revoked.
He said the sale was anomalous because there was alleged monopoly during the bidding, with the developers allegedly agreeing on what property to buy. He even accused Rama of conniving with the developers.
The city sold the property at P38,000 per square meter, or P16.76 billion for 45 hectares. Filinvest wanted to use 70 percent of the property for commercial and office use and use the rest for residential purposes.
When Osmeña assumed office on June 30 last year, he ordered the city treasurer and the budget officer to refrain from spending the amount derived from the sale of the lots, saying he will return the money to the buyers.