Lawmakers probe alleged missing City Square rentals

Millions in revenues from yearly rentals and taxes from the private group operating the highly-profitable government-leased commercial piece in the heart of Tagbilaran City, the City Square, must have been missing.

The Sangguniang Panlungsod (SP) led by Vice Mayor Jose Antonio Veloso started in its session on Friday what could yet be a lengthy inquiry that might be able to trace where have all the “absent”money gone.

Appearing in the session, Chinese businessman Beng Sum Ko claimed theyalready remitted to the city government nearly P80 million in annual lease payments and business and real property taxes for nine years since 2009.

Ko identified himself as the chairman of the board of the Tagbilaran Business Center (TBC) Corporation, a consortium running the City Square.

But records provided to the city council by City Treasurer PrimitivaOntong only showed over P55 million in total remittances received, according to Kag. Augustinus Gonzaga.

Gonzaga and Kag. Adam RelsonJala noticed that the City Square management has religiously paid its yearly lease payments and taxes only in the present term of Mayor John Geesnell Yap II, who assumed in 2013.

Based on its 25-year agreement with the city hall, the business consortium operating the City Square has to remit to the city a share of P5 million or 20% of its gross sales/receipts annually, whichever is higher.

The agreement was sealed during the time of then-Mayor Dan Lim under the rehabilitation, operate and transfer (ROT) scheme.

While Ko claimed that so much hasbeen already remitted to the city since the time of Lim, the government treasury record showed otherwise.

Ko, for example, said the business taxes they paid since 2010 have already amounted to over P8.5 million.

But the city treasurer said the tax for 2010 was only paid in 2014 after the Yap administration exerted an exceptional revenue collection effort.


According to Ko, the management already remitted to the city a total of P78.857 million in lease payments and business and real property taxes for a nine-year period from 2009 to 2017.

He gave this breakdown of the total: P55.850 million, lease payment or share of the city based on the formula of P5 million or 20% of the gross sales annually, whichever is higher; P8.555 million, business tax; and P14.451, real property tax.

Also, Ko reported the breakdown of the total P55.850 share to the city, which excluded the taxes: P5 million in 2009; P5 million, 2010; P5.7 million, 2011; P6 million, 2012; P6 million, 2013; P6.3 million, 2014; P6.6 million, 2015; P7.1 million, 2016; and P7.9 million, 2017.

But the city treasurer’s record could only show P55.1 million in total remittance received representing not just the shares (lease payments/rentals) but also business and real property taxes.

Jala told Ko that, also based on the city treasurer’s record, the City Square management did not pay business and real property taxes from 2009 t0 2013.

Amidst the inconsistencies in his claims of payments being supposedly done,Ko told the city council he would “double check” their record.

There were deficiencies in millions not paidby the consortium during the past administration and only received by the city when the mayor is already Yap.

The councilors required the City Square operator-group to submit to the city its full inventory of rentable spaces and rates and the contracts with the different tenants as checked by the city auditor.

Ko denied the past allegation that the City Square business project was a “sweetheart deal” between their group and the past city administration.

He said they even pay the real property tax even if it is the obligation of the city being the owner of the property leased to their group.

Ko said if the price is right for them to get the return of their investment, they are willing to renegotiate with the city to take over the City Squareor give in to any party that can give the city better option.

But according to a councilor’s conservative estimate, the consortium can earn P40 million or higher a year from the rentals of its tenants occupying the ground, second and third floors of the business center.

Using the formula of 20% of the gross receipts to determine the lease amount, the consortium will remit at least P8 million annually to the city.

Gonzaga called for a regular accounting and spot checking by a joint task team of city treasury and accounting personnel.


In response to a query from Kag. Jonas Cacho, Ko denied any management hand in the daily collection of fees for parking, terminal and sidewalk vending surrounding the City Square.

Ko mentioned a “cooperative” being engaged in the fee collection but insisted that the management has no involvement in the money-making activity.

But a source, who is also a city hall official, said the collection of fees has been “sanctioned” by the “new City Square management that also owns the Unitop and Unicity.”

During the session, Ko named Ricardo Prieto of Unitop and Unicity and another businessman, Juan Apostol, Sr., as his fellow “major stockholders” of the City Square consortium.

He suggested to the city to “remove” the sidewalk vendors and take over the terminal and parking management.

Ko himself allegedly sanctioned “that extra business” of collecting parking, terminal and vending fees during his management of the City Square, the source said.

But the source also said that Ko now “has lesser influence” since he is “no longer the management boss,” which explains his “adverse view” now of the “surrounding livelihood activities.”
Ko admitted in the session that he can only “call meetings” being the board chairman and not the president of the City Square consortium.

Meanwhile, City Administrator Leonides Borja said the city allowed the vendors for an economic reason,but the government does not collect rental fees from them.

This is especially on such special occasions as All Saint’s Day, Christmas and Valentine season. (Ven reboArigo)












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