Market building lessors told to remove improvements

BAGUIO CITY  – Mayor Mauricio G. Domogan called on the thirty five market building lessors who were not able to renew their final 15-year contracts with the local government to start removing their improvements so that the subsequent lease of the city-owned properties will be done through public bidding.

The local chief executive vehemently denied the allegations of the building owners who failed to renew their contracts that there was no due process in the inclusion of the 15-year lifespan of the final contract, saying that all the concerned parties were present during numerous consultations that were called for the purpose of finalizing the provisions of the final contract.

“We take exception to the allegations of the building owners that there was no due process in the renewal of their contracts that resulted to the inclusion of the provision that the lifespan of the agreement will be fifteen years and that all improvements shall accrue to the local government without necessarily reimbursing their expenses,” Domogan stressed.

He explained that the building owners should be grateful that local officials were able to convince the Commission on Audit (COA) that instead of subjecting the city-owned lots for public bidding considering that the local government was actually at a loss in the said contracts through the years, the new rental rates were negotiated between the parties with the inclusion of the provision in the contract that the lifespan of the agreement will be for a non-extendible period of 15 years.

According to him, it was agreed upon by the market building owners that the rental for the leased space will be P6 per day per square meter for the first five years plus an increase of P2 per day per square meter for the 6th to 10 year and an additional P1 per day per square meter for the 11th to 15th year of the contract with the conformity of COA representatives.

Domogan underscored it is clear that the contracts of the 127 market building owners already expired on December 31, 2015 and that their renewal is upon mutual agreement of both parties, thus, considering that no mutual agreement was reached between the local government and the 35 market building owners, it is but proper for them to start removing their improvements over the city-owned lots so that the city will be able to bid out the areas to other interested lessors willing to adhere to the inclusion of the 15-year lifespan of the agreement.

Earlier, the COA discovered that the local government had been entering into contracts with the market building owners which was described as ‘disadvantageous to the city considering that the rentals being collected from them are reportedly way below the prevailing rates in other structures within the vicinity of the city-owned properties.

Domogan underscored that even with the final 15-year lifespan of the contract, the market building owners will have occupied the city-owned lots for over six decades now which means that they were already able to recover their investments and improvements over the said properties, thus, it is high time for the local government to maximize the revenues that will be generated from the lease of the lots that is within the city’s central business district area and considered as prime properties of the government.

By Dexter A. See

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