Ayala gives up Bacolod deal amid SM complaints
MANILA, Philippines - The provincial government of Negros Occidental has decided to remove a long-delayed property development project from its priority list, prompting Ayala Land Inc., which won the auction, to shelve the project, too.
In a disclosure to the stock exchange on Friday, April 13, Ayala Land confirmed reports that it wrote to Negros Occidental Governor Alfredo G. Maranon accepting the recent developments, which were prompted by a complaint from rival SM Prime Holdings.
"We wish to clarify that our letter to Gov. Maranon was in response to his statement on the effect of the delay of the approval of the project on the economy of the province, and his decision to de-prioritize the Bacolod Capitol project for the sake of continued progress. We have likewise reviewed our position and agree with the Governor's assessment," it told the exchange.
At stake is a 7.7-hectare property in Talisay City where the Capitol Civic Center used to be and that the local government had wanted to develop.
Businessworld explained that this property was initially auctioned off in June 2011, but was considered a failure since only Ayala Land participated. In a rebidding a month after, SM Prime Holdings joined the auction together with Ayala Land. Through a negotiated bid, Ayala Land won the project.
Ayala's bid was worth P3.5 billion and involved the development of the property into a residential-commercial complex it had dubbed as Ayala Northpoint Estate. A major component of the complex was supposed to be a PEZA-accredited information technology part that Ayala aimed to complete by June 2012.
However, the SM group lodged a protest, contesting the fairness of the bidding process and claiming that the local government did not provide a "floor price," which is a basic requirement in auctions.
SM's complaints resulted in a Commission on Audit's intervention, which included the creation of a technical team that reviewed the sale and lease deals. The final meeting between the COA team and the Negros Occidental local government was on Friday, April 13.
"We have therefore decided to focus our plans and resources on an ongoing mixed-use development a few kilometers away from the subject property, the Ayala Northpoint, for the time being," Ayala wrote in the Friday disclosure.
"Ayala Land welcomes the review of contracts being done by the Commission on Audit as it ensures the transparency in transactions involving government properties," it added.
Both Ayala and SM groups have existing retail, commercial, office or residential developments in the provincial capital of Bacolod City, about 7.3 kilometers away from the contested property in Talisay.
Recently, SM announced a P1.4-billion-worth plan to expand its Bacolod mall. In another expansion plan, this time in Baguio City, SM is currently facing off with environmental critics over trees it plans to uproot. - Rappler.com