Unfulfilled promises

When property developers sell subdivision lots, condominiums and other real estate property, they would always give out glossy brochures depicting a dream community where one would put his or her money to live and work.

In a mannner of speaking, property developers sell promises, because most of their sales are done even before the first bucket of concrete is poured into a building. Everything is presented from the architect’s perspective, and larger-than-life images of beautiful homes, parks, club houses, wide roads and street lights, swimming pools and other amenities are crammed into a brochure.

More than 15 years ago, this was exactly how Fil-Estate marketed the Puerto Real de Iloilo. It was billed as the most luxurious residential subdivision in Iloilo City, complete with sports and leisure facilities, well-lighted and spacious roads, mini-parks, and most importantly, adequate security to give homeowners a peace of mind.

The development came with a big bang. Fil-Estate was then riding on a property boom, and its name became synonymous with first-class living. There was an impressive kick-off party at the Amigo Terrace Hotel. All the big wigs were there.

True enough, the marketing ploy of Fil-Estate penetrated the consciousness of the moneyed-class in Iloilo City. Its subdivision lots were quickly gobbled up by rich businessmen and professionals. Living there was a stamp of class that many people desired and got. Or at least, so they thought at first.

It didn’t take long before homeowners realized they were duped.

The homeonwers at Puerto Real de Iloilo believed they paid for expensive lots to get facilities and services that would be commensurate with the price of the subdivision lots. The promised first class facilities and amenities never materialized.

Since then, Puerto Real de Iloilo was sold by Fil-Estate to the Global Estates Resorts Inc. (GERI), an affiliate of the Megaworld Corporation. Megaworld is also the developer of the Iloilo Business Park in the old Iloilo airport property and a partner in the Sta. Barbara Heights Subdivision.

A life of luxury and comfort was what the sellers promised the homeowners. For the homeowners, life in Puerto Real during the last 15 years has been like hell, a long struggle to compel the developer to make good on their promises.

What are some of the problems? For one, the club house and its amenities — basketball gym, swimming pool and tennis court — are in a state of disrepair. The roof over the basketball gym is leaking, and the other facilities neglected and badly need repair.

The road network in the posh (only in name, so the homeowners claim) subdivision are poorly maintained. At night, the roads are shrouded in darkness, and residents hardly feel safe about strolling after dinner.

Worse, there are still informal settlers in parts of the subdivision. The developer failed to provide them with relocation sites at the start of the construction. Now these people continue to live in the “pulo” where their shanty houses still stand. Some own work animals like carabaos and keep them in their compound. Puerto is where one can find carabaos loitering about, posing a grave danger to motorists.

A bigger issue is security: with poor families living in parts of the subdivision, the subdivision is having a hard time controlling the entry of people. It is a security nightmare for the homeowners.

For a long time now, the homeowners association has pressured the new management — a Megaworld affiliate — to plug the gaping holes in the contract and turn over the subdivision to them. The homeowners feel they could do a much better job looking after their own security and keeping the community clean.

The response of the Megaworld company has been to stall and delay. No progress has been made in the negotiations to bring the company to honor its commitments in the contract to sell. It continues to ignore the complaints of the homeowners.

To add to the problems of the homeowners, it was recently discovered that GERI owes the Iloilo City government more than P20,000,000 in realty taxes. The homeowners have pestered management about the tax indebtedness to the city. The overdue taxes remain unpaid until now.

The homeowners decided enough was enough. A few weeks ago, the association lodged a complaint before the Housing, Land and Urban Regulatory Board (HLURB) to seek remedial action.

Instead of trying to find ways to meet the homeowners halfway and reach a compromise, GERI retaliated by reducing the number of security guards who man the gates. It’s becoming obvious to them GERI is not repentant about its own inadequacies and downright breach of contract.

(In a statement to The Daily Guardian, Fil Estate on Puerto denied that GERI is involved in the project. This is being disputed by homeowners’ representative who talked with me.)

The message to the homeowners was loud and clear. Megaworld enjoys protection from the powers-that-be in Iloilo City, and would not budge even in the face of an administrative case. That the city government hasn’t taken legal action to enforce the P20 million tax liability is an indication that Megaworld is shielded by a culture of impunity.

This culture of impunity cannot be allowed to exist. The HLURB should strictly enforce contracts to which developers have bound themselves to fulfill. In this case, sanctions should be imposed on GERI and warnings given to other Megaworld affiliates. If HLURB rules and regulations are just scoffed at by developers like Megaworld, then property buyers who invest millions of pesos in the properties offered to them through glossy brochures are vulnerable to lose the value for which they paid for.

It is time government strengthens its capability to protect consumers. After all, a breach of contract is an assault on our legal institutions. Violators of the law such as GERI must be required to pay stiff fines and stripped of their licenses to operate. That is the only way to uphold the rule of law.

Right of way

Can a road-right-of-way on government land — or more precisely a public road — that is part of land acquired by a property developer be closed down and the area used as site for buildings?
This was a question I threw at a municipal trial court judge and two lawyers I regularly meet for bottles of beer the other night.
Their outright answer: “NO!”
Indeed, from my own layman’s understanding. a ROW should be left open even if it was part of a bigger property that was bought by a private company.
This is particularly true when the ROW was a public road for which public funds were spent to pave the same with concrete.
I am wondering what the Housing, Land and Urban Regulatory Board (HLURB) will have to say about this.
Will it mean the developer will have to demolish the structures built on the ROW?

Why the fuel price hike so soon?

Everyday I monitor Bloomberg TV to look at the major business headlines in the Asian region as well as the world stock markets. One of the things I closely watch is the price of oil in the world market. Hence, it surprised me to learn last night that fuel companies will start to increase pump prices again starting today. The local market experienced a significant slide in the prices of diesel and gasoline these past few months, easing the pain on car owners and transportation industry operators. But is that a brief honeymoon for us? There hasn’t been a significant change in the world market prices of oil. So what is the basis for the fuel price hike so soon?

Is Iloilo City headed toward a property bubble?

It’s not that I don’t want Iloilo City’s economic development to screech to a halt. But looking at the frenetic infrastructure projects now undergoing construction (private sector development), I am worried that this would lead to a property bubble. At the pace new condominiums and malls are being built, there is a real danger supply would overtake demand, and many developers will be left holding an empty bag.

The retail market, for instance, is not big enough to warrant the operation of more stores in Iloilo City. The present retail floor space that are available for rent is already more than what the market could accommodate. Just recently, SM City opened its new wing, and many store spaces are still empty. That’s not to mention a number of restaurant closures in the giant mall.

Robinson’s Mall is opening another complex in Jaro at what used to be the campus of the De Paul College. Atria has gone full blast in its operations, mostly with restaurants in Barangay San Rafael. The Florete Group of Companies is rushing the completion of its Plazuela II along the Benign Aquino Jr. Avenue. Meanwhile, Megaworld is also going full swing in its construction of its strip malls in the Iloilo Business Park.

Filinvest and Ayala Land are also racing with each other to build condominiums within a 2-kilometer radius in Mandurriao. Not too far away are condominiums of Megaworld. Also about to commence construction is the mixed-use complex of Gaisano in Bolilao, Mandurriao.

Smaller malls have also been put up in other parts of the city. Double Dragon Properties Corp. has opened its City Mall in Barangay Tagbac, Jaro. Another City Mall is slated to break ground in Barangay Ungka, Pavia before the middle of 2016. A third City Mall is going to loom large over the scenic Guimaras Strait as part of the Parola Ferry Terminal. The group of Alfonso Tan is now operating GT Mall near the Molo Plaza.

There is no mistaking that development is taking place at breakneck speed in Iloilo City. A quick glance at all these activities couldn’t fail to impress the observer. But we need to learn lessons from history — business history. Property bubbles are always a danger when development takes place at such high speed. The demand might not be able to sustain the market supply’s growth.

Among the developers, I find the Double Dragon strategy of locating its new malls in the periphery of the city more prudent. It avoids the potential congestion that might only worsen the already bad traffic situation on the Iloilo Diversion Road (aggravated by poor traffic management practices of the LGU). And as the City Malls are situated in the outskirts, they will be able to snare much of the people who want to avoid the traffic.

Of course, these developers didn’t just jump into pouring hundreds of millions of pesos in investments for malls and condominiums without extensive feasibility studies. That the developments are concentrated in the Mandurriao district seem to follow the model of Metro Manila, where malls and condominiums are built in concentric circles. The residences are  always a stone’s throw away from restaurants and shops. This is the model in Alabang, Eastwood, Greenfield in Mandaluyong and many more.

What I fear is that the buying power of Ilonggos might not be enough to fuel this growth. Even in the number of restaurants that have opened for business, one can easily see that customers flock to the newer ones, leaving the older restaurants with fewer diners. The dining market base hasn’t grown that much to make the opening of more restaurants viable. It’s the same way with shoppers.

I would want to see this growth sustained. The LGU should be laying the foundation for increasing the buying power of its people. Unfortunately, that is not happening. There are no industries that could provide good paying jobs for the people. If there are jobs being created, these can be found in the services sector — restaurants, retail outlets, call centers. This will fall short of what is needed to sustain this growth.

Our leaders should take steps to avoid a meltdown. They should not be lulled into a false sense of achievement. The public investments are being poured into the wrong areas. We are not building the necessary infrastructure for sustained development. The crash can happen sooner than anybody might expect.

 

A mustard seed

The success of Eugenio S. Ynion Jr. in business illustrates how each of us can be like a mustard seed which is quite small and yet grows into the biggest of shrubs, an Ilonggo priest, Fr. Delbert Jardinaso, OSJ, said on Monday, July 28.

In his homily during the blessing and inauguration of the Yngen Group building in Barangay San Antonio, San Pedro Cty, Fr. Jardinaso said that “like the mustard seed, we can grow and become so magnificent by making use of possibilities.”

Fr. Jardinaso is now the parish priest of San Jose, Batangas. He spoke on the significance of the Parable of the Mustard Seed (Matthew 13:31-35) in our lives.

Businessman-philanthropist Julio D. Sy Jr. (right), assisted by Mrs. Carissa Gonzales-Ynion and Barangay Captain Eugenio S. Ynion Jr., cuts the ceremonial ribbon to formally inaugurate the Yngen Group headquarters building in sitio Guadalupe, Barangay San Antonio, San Pedro City on July 28, 2014.

Businessman-philanthropist Julio D. Sy Jr. (right), assisted by Mrs. Carissa Gonzales-Ynion and Barangay Captain Eugenio S. Ynion Jr., cuts the ceremonial ribbon to formally inaugurate the Yngen Group headquarters building in sitio Guadalupe, Barangay San Antonio, San Pedro City on July 28, 2014.

“He was nothing like a mustard seed, but in the midst of nothingness and insignificance, Jun Ynion, showed us that we can reach great heights,” Fr. Jardinaso said.

However, this success can only be meaningful if it is shared with others, he said.

Fr. Jardinaso urged Ynion to help the community through genuine public service. “It is when we remove selfishness from our lives, when we share our gifts with other people, that our success becomes meaningful,” he said.

Jun Ynion is the chief executive officer of the Yngen Group which relocated its corporate headquarters to Barangay San Antonio from the urban congestion of Makati City. He is also the barangay captain of Barangay San Antonio.

The transfer of the Yngen Group corporate headquarters to Barangay San Antonio also puzzled Ynion’s business partner, Julio D. Sy Jr., or better known as “Jun Sy”.

“At first, I played the role of devil’s advocate to Jun,” Sy said. “But I realized I can’t question his determination to pursue his mission.”

Sy described Ynion as “passionate” and ultimately supported the move because he saw “how much he loved the community.”

“More good is bound to happen,” Sy said, although he realized that it is difficult to balance two roles.

Sy said that he can compare what Ynion is doing to the entrepreneurial work that NBA legend Magic Johnson had done for blighted communities in the United States, the Harlem in New York City in particular.

Magic Johnson, he said, became greater after basketball because of his work to uplift decaying American communities through entrepreneurship.

“What he has done is inspire the resurgence of the Harlem,” he said.

Sy found a parallel to what Ynion is doing for barangay San Antonio to the work of Magic Johnson.

He noted, for instance, that the property on which the Yngen Group building stood, as well as the Sabak Bldg, in sitio Guadalupe used to be a place of sin and crimes.

The construction of these two buildings will trigger a resurgence in the community, he said.

 

 

 

Convenience store chains race to win Iloilo market

Mini-Stop of the Robinsons group opened two stores in Iloilo City Thursday (July 24, 2014) to signal its intention to grab a slice of the growing convenience store market here.

The Mini Stop stores are located in the Robinsons Place Mall on Ledesma St. and in the IPSTA in Lapaz.

The entry of Mini Stop to the Iloilo market came in the heels of a virtual “invasion” by 7/11 which opened eight of a planned 25 stores just last month.

An announcement in Bloomberg Businessweek said Philippine Seven Corp. is eyeing the opening of another 80 stores in the next two years to take a commanding presence with 105 stores.7 11 logo

Not to be outdone, a local convenience store outfit, Quix Mart, has also opened new stores in several locations in the city. The Quix Mart is owned by the Que Family of the Iloilo Supermart chain.

Florete: ‘We can deliver’

(Part I of a Special Report on the Water Supply Situation in Iloilo City)

Flowater Resources (Iloilo) Inc. has the capability to deliver the contracted 25,000 cubic meters of processed water to ease the shortage of tap water in Iloilo City.

The problem is that its customer, Metro Iloilo Water District (MIWD), does not have big enough pipes to bring the water to the more than 139,000 households in its franchise area.

This was the assertion Sunday of Dr. Rogelio Florete, chairman of FloWater, during a plant tour and press conference at the company’s P1 billion water treatment facility in Barangay Nanga, Pototan.

“Would I be stupid to spend a billion pesos only to fall short on my commitment?” Florete remarked before a small group of media persons. Former city councilor Perla Zulueta, who had once served on the board of directors of the MIWD, was also present to hear Florete out.

To prove his point, Florete gave the media group access to the 5-hectare property beside the Jalaur River and the water flow metering station where the company’s main 800-mm pipe connects with the MIWD in Leganes, Iloilo.

At the intake pond on the northern bank of the river, Florete showed media that FloWater has three submersible pumps, each capable of drawing 15,000 cubic meters of raw water into its filtration and treatment plant.

Dr. Rogelio Florete explains to media the mechanics of how raw water from the Jalaur River in Barangay Nanga, Pototan is pumped into its treatment facilities from a P20-million intake pond beside the riverbank.

Dr. Rogelio Florete explains to media the mechanics of how raw water from the Jalaur River in Barangay Nanga, Pototan is pumped into its treatment facilities from a P20-million intake pond beside the riverbank.

“To meet the contracted volume of 25,000 cubic meters daily, we just need to operate two submersible pumps,” Florete said. The third one serves as a spare in case one of the two submersible pumps break down.

And it’s not all: Florete showed there are a total of six chambers (one unit for each chamber) on the intake pond for the submersible pumps. Three more are not yet equipped with submersible pumps; these are in anticipation of future business when demand for water grows bigger.

It was this intake pond that became the cause of delays in the plant’s commissioning. “My agreement with the contractor was design, build and transfer,” he said. However, the contractor wanted Florete to start paying him even before construction work could even start, he explained.

“When he continued to drag his feet on the intake pond, I threw him out of the project and took over the work,” Florete added.

Florete also complained the contract imposed a deadline that was impossible to meet. “We were given only six months from the award of the contract to start delivery,” he said. Within that period, he pointed out that he was expected to buy land where the plant was to be built, obtain approval for its conversion from agricultural to industrial, develop the facility and lay out the pipes. “Even just the process of getting the conversion approved took months,” he said.

Workers at the intake pond of the FloWater Resources (Iloilo) Inc. use a vacuum hose to suck sludge from the bottom to keep its depth at optimum level and ensure uninterrupted flow of raw water into its pumping stations.

Workers at the intake pond of the FloWater Resources (Iloilo) Inc. use a vacuum hose to suck sludge from the bottom to keep its depth at optimum level and ensure uninterrupted flow of raw water into its pumping stations.

But Florete said he plodded on, determine to make his own positive contribution, and legacy, to the growth of Iloilo City.

The idea of a bulk supply contract to meet MIWD’s requirements came after its management realized its existing network of deep wells augmenting the main supply line from Maasin was simply inadequate.  MIWD has deep wells in Oton and San Miguel that draw tens of thousands of cubic meters from a known aquifer in the area. Not only was the volume of water pumped from underground sources not enough; there’s concern about overdrawing from the aquifer that could result in salt intrusion. If that happens, the aquifer would be rendered useless, as the process is irreversible.

The mainstay for MIWD’s water supply is the antiquated intake dam in Barangay Daja, Maasin, where the water is then pumped several kilometers to the filter and treatment facility in Barangay Talanghauan, Sta. Barbara. The facilities were designed and built in 1926 during the American colonial rule in the Philippines.

Supply is not the only problem. A critical factor, too, for the MIWD’s inability to deliver a steady stream of water to households is the derelict network of pipes serving the franchise area. Hundreds of millions of pesos have been spent for pipe-laying during the last two decades, but it appears much of the money went to corruption. It was discovered that most of the pipes on the ground are old, with leaks springing every hundred meters or so.

Because of these problems, a study commissioned by the World Bank, known as the “Castalia Report”, showed that MIWD is able to provide water to less than 20% of the 139,000 households in its franchise area. The study was conducted seven years ago, and since then, more subdivisions have sprouted all over the city. That number could easily rise to 145,000.

The situation is rather embarrassing for a city that aspires to host the 2015 APEC sub-ministers meeting and markets itself as a tourist destination. Its hotels depend on twice-a-day deliveries from water tankers to keep their faucets flowing. Only a few areas in the city enjoy 24-hour water service. In many areas, hardly a drop of water reaches households. The business of water tanker deliveries has enjoyed brisk sales because of this.

Hence, the need for a bulk supplier to meet the city’s needs.

(To be continued)