Dispute Over Baguio City’s Camp John Hay

As a former resident of Baguio City, it’s just sad to hear that the people are caught between the crossfire of dispute over Camp John Hay.  Baguio City Mayor Mauricio Domogan said that if the Bases Conversion and Development Authority (BCDA) agreed to collect from its developer, Camp John Hay Development Corp (CJHDevCo) its offer of 500 million as rental income, the 25-percent amounting to 125 million, would have greatly benefited the Baguio community.  Had it only BCDA president and chief executive officer Arnel Casanova settled their disagreement with CJHDevCo Chair Robert John “Bob” Sobrepena’s group and agreed to talk to them, this wouldn’t have happened.  

According to an article: When the lease agreement for Camp John Hay was signed in 1997, by congressional authority, the city of Baguio was given an equitable share of 2 percent from the gross income of operations from Camp John Hay and is also entitled to 25 percent of the rentals paid to the BCDA or 30 percent of the net income from all operations in Camp John Hay, whichever is higher. When CJHDevCo first started developing the area, the city got its share. Among other payments, BCDA received the following from CJHDevCo:

  • 250 million upon signing of the original lease contract in 1996;
  • from the ₱425 million in 1997;
  • from the ₱125 million in 2000 after the first restructuring memorandum of agreement;
  • and from the 100 million in July and August of 2003. 

It was however, on the last memorandum of agreement in July 2008, when John Hay Management Corp. (JHMC), a BCDA’s subsidiary, set up a “One Stop Action Center” (OSAC) processing and issuing all necessary permits for CJHDevCo within 30 days for the developments in Camp John Hay.  Unfortunately, it’s objectives weren’t realized and instead caused delays in Camp John Hay’s developments.  It somehow made CJHDevCo think that the BCDA was putting it in a position where they are demanded to pay even if the latter had not yet fulfilled its part of the contract. So CJHDevCo decided to suspend payments in 2008.

Nonetheless, CJHDevCo led by Mr. Sobrepeña, is willing to face their obligations, provided that BCDA would fulfill its part in the contract. In a letter to the BCDA last January 9, 2012:

CJHDevCo offers to pay the back rentals with a substantial percentage to be paid up front, provided that the BCDA fully complies with its obligations under the agreement, particularly the establishment of the OSAC with the “full authority to process and issue all business, building and other development permits, certificates and licenses, local and national, from all government agencies necessary to facilitate the construction and commercial operation of the John Hay Special Economic Zone.” 

Quoted below is the position paper Mayor Damogan made to Congress, citing the reason why the two parties needed to settle their dispute quickly.

“Because of the noncompliance with the terms and conditions of the original contract of lease and the various restructuring memoranda of agreement that followed, the agreement between the city government and BCDA to utilize its 25-percent share from the lease rentals of Camp John Hay could not be realized. The payment of the total consideration of P250 million purchase price of the Baguio Convention Center together with the one-hectare lot where it is standing, did not materialize. The city was then forced to pay the remaining P208 million including not less than P110-million interest of the unpaid balance from its own resources after GSIS (Government Service Insurance System) condoned P50 million as part of the said interest.”

My say: With the recent appearance of Mr. Bob Sobrepeña in Pasay Regional Trial Court to post bail for an estafa case filed against him by the BCDA,  my hopes are the same with the people of Baguio that the dispute between BCDA and CJHDevCo will be effectively resolved.  And in order for this to happen both parties must be willing to “give and take”.  As Mayor Domogan said in an interview, CJHDevCo is willing to pay in good faith all the rentals however it is also seeking the commitment of BCDA to fulfill its own end of the contract.  Yahweh bless.

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2 Responses to Dispute Over Baguio City’s Camp John Hay

  1. It’s a matter of resolving this case to the table, wherein CJHDevCo could begin the improvement, and the development to foster revenues. Willingness of BCDA to follow the MOA could truly give CJHDevCo its commitment to the public and also to them. But Mr. Casanova I think has a different outlook or other interest to the case. Let’s just wait for the court’s ruling and hoping that Mr. Bob Sobrepeña’s battle will win.

  2. I hope BCDA and CJHDevCo will be willing to do a mediation. This lawsuit will drag on and on and the citizena of Baguio will be the one to suffer.

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