Monday, July 21, 2008 City, Uniwide execs to meet By Rimaliza Opiña
OFFICIALS of the City Government and Uniwide Sales Realty and Resources Corporation are set to meet for the first time after a local court affirmed the validity of the contract and the develop-build-lease (DBL) agreement signed by both parties in 2005.
The meeting is set on August 5. Baguio Mayor Reinaldo Bautista Jr. said the meeting would have been set earlier but owners of Uniwide led by businessman Jimmy Gow, were out of the country when Judge Iluminada Cabato rendered the judgment in favor of the company and the city.
The meeting is for the city to determine Uniwide's plan regarding the construction of a modern city market, which has been put on hold for 12 years because of an injunction, filed by a group of tenants at the market.
Lawyer Melchor Carlos Rabanes, officer-in-charge (OIC) of the City Legal Office was tasked to act as liaison between Uniwide and the City Government.
The court earlier suggested for the city to determine Uniwide's capacity to develop the market, because it is currently under rehabilitation.
Bids and Awards committee chairperson Leticia Clemente said it is time for the city to meet officials of Uniwide. She said many of the terms of the contract then might change because some of the provisions are no longer applicable to the existing conditions of the city now.
For his part, Baguio Representative Mauricio Domogan said even the legitimate vendors at the market should be consulted, once the city and Uniwide decides to pursue development. If not, he said the city should come up with a scheme on how to develop the area. The project costs P1.7 billion.
"It is a must that it be developed," Domogan said owing to the area's high risk in terms of fire and sanitation standards. Insurance companies have in fact declined to insure the area citing the market is not safe.
Domogan said developing the market promises a sizeable income for the city, for revenue, which used to be enjoyed by some parties by subleasing the stalls, will not be allowed under the DBL scheme. To lessen the number of illegal vendors, the scheme provides leaseholders will be allowed only one stall each.
"The market became a gold mine to some people and they were tolerated," Domogan said referring to leaseholders who pay for a minimal lease fee to the City Treasurer's Office yet sublease their stalls four or five times higher than what is prescribed by the Tax Ordinance.
Domogan was mayor when the Uniwide deal was passed.
In Ordinance 38-1995, which contained the guidelines for the management of the construction of the new market, rent was pegged at P10 per square meter.
Domogan, however, said development might not happen yet because the parties who earlier sued the city and Uniwide are bent on appealing Cabato's decision.
Uniwide Holdings, Incorporated parent company of Uniwide Sales Realty is involved in real estate, leasing and franchising.
The Uniwide website lists the Gow family owns 49 percent of Uniwide Holdings Incorporated through the Uniwide Sales Realty and Resources Corporation (USRRC), it is also involved in the acquisition, development, holding and leasing of land and buildings used as sites for the warehouse clubs and department stores.
Data from the website of the Philippine Stock Exchange showed in 1997, Uniwide was included in the list of 15 businesses which were to be de-listed because of negative stockholder's equity.
The de-listing was meant "to discourage firms from unwarranted price speculation and to protect investors."
As a rule, firms included for de-listing are required to submit their business rehabilitation plans.
The 2008 unaudited financial statement of Uniwide shows it has a P9.8 million cash on hand and in banks, receivables amounting to P76,377,300, other assets amounting to P47,813,187 and accounts payable amounting to P2,397,275,630, loans payable at P1,684,481,691 and tax liabilities amounting to P63,531,616 or a total capital deficiency of P7,654,631,377.
Because of its deficits, Uniwide first underwent a rehabilitation plan in 2000 through signing of memorandums of agreement with several firms that payment be done partially in-kind (dacion en pago) and in cash and for unsecured creditors, convertible notes were also issued.
In addressing cash shortfall the Uniwide group adopted these measures: improvement of retail inventory level to increase retail sales, strict implementation of cost saving programs, sale of non-retail related assets, negotiations with suppliers for better credit terms and maximization of the earning potential of leasable spaces.
Uniwide's rehabilitation plan underwent several amendments and currently is on its on sixth year of rehabilitation.
