SM on Taguig mall row: We’re only a lessee

MANILA, Philippines – The Sy-led SM Prime Holdings Inc., the country’s largest mall developer and operator, is tossing the ongoing legal row over its recently opened SM Aura mall in Taguig City back to the government.  

Responding to the claim of state firm Bases Conversion Development Authority (BCDA) that SM Aura was built illegally, Cora Guidote, vice president of SM Prime’s parent firm SM Investments Corp., told Rappler in a phone interview on Wednesday, May 22, that their lease is with the local government of Taguig, not with BCDA.

“It’s an issue between Taguig and BCDA. The BCDA has to deal with the local government. How can we deal with them when we’re just a 3rd party?” Guidote stressed.

BCDA is the state-controlled firm tasked to transform former military bases, including the Fort Bonifacio area in Taguig where SM Aura is located, into productive civilian use. 

Guidote stressed that SM Prime bid for the land that the local government of Taguig City eventually awarded to the Sy-led mall developer.

Guidote said SM Prime and Taguig government have a long-term lease contract, which has a 20- to 30-year term.  

This was SM’s basis for going ahead with the construction and for pouring around P3.5 billion already into the project, Guidote explained. When the mall opened to the public on May 16, no less than “Sex and the City” star and Hollywood A-lister Sarah Jessica Parker graced the ribbon-cutting ceremony. 

Between BCDA and Taguig

In a statement on Wednesday, the BCDA said some social media “pundits” said that BCDA was also at fault for signing the Deed of Conveyance (DOC) between the government agency and the City of Taguig.

BCDA said that critics said upon signing the DOC, the BCDA “shall not place any restrictions on the use of the land.”

The BCDA said, however, that building a mall was in direct violation of the law. It said the building of a mall on the property was a violation of Section 8(d) of Republic Act No. 7227, which provides that BCDA land can only be used for sports facilities and parks. 

SM Aura has a 5,590-square-meter retail space set to be occupied by mostly high-end brands, a departure from the usual middle to low income retailers that currently occupies its malls nationwide. 

SM Prime said the global brands that will be locating their first Philippine stores in SM Aura includes Suiteblanco, Stefanel, Minelli, TM Lewin, J. Lindberg, B.B. Dakota and River Island for fashion. – Rappler.com