By Neal H. Cruz | Philippine Daily Inquirer | December 3, 2014
I heard that an arbitration committee is finally coming out with its decision on the long-festering quarrel between Camp John Hay Development Corp. (CJHDevCo), developer of the former American recreation camp, and the Bases Conversion and Development Authority (BCDA). The latter under Arnel Casanova is trying to forcibly take over CJHDevCo hotels and other developments allegedly because the developer is behind in its lease payments. CJHDevCo, on the other hand, claims that the BCDA has been withholding permits so it cannot develop the full 18 hectares leased by it. So CJHDevCo filed for arbitration.
Background: The former American camp was bid out for development in the 1990s. The vision was to convert the camp into a tourism estate consisting of a recreational, residential, commercial and ecological community, and make it into a wholesome family-oriented project.
The highest bidder was Manuela, the development company of former senator Manuel Villar, but it was disqualified due to a technicality. The second highest bidder was CJHDevCo, and the third was Ayala Corp.
CJHDevCo won the bidding, but if it could be taken out of the picture, Ayala would get the coveted project.
The entire leased area is 247 hectares, but CJHDevCo can develop only 18 hectares. The rest of the camp is to remain pine-forest land and a golf course. The developer is responsible for and maintains—but cannot touch—about 120 hectares of protected forest. Camp John Hay is now the last sanctuary of Benguet pine trees. Most of the Cordillera has been logged over. Development by CJHDevCo started in 1996.
Of the 18 hectares, CJHDevCo has been able to develop only four hectares so far because the BCDA refuses to release development permits. CJHDevCo is already much behind its development schedule. In a restructuring memorandum of agreement (RMOA), it was agreed to have a one-stop shop to speed up the release of permits, but the BCDA under Casanova sat on the applications. Casanova once sent his storm troopers to forcibly take over the hotels and other developments of CJHDevCo, but the latter’s guards and workers fought back until the BCDA desisted.
The Court of Appeals issued an injunction against the BCDA, and the two sides agreed on arbitration. When the injunction lapsed recently, the BCDA ran advertisements in the newspapers saying the court had recognized that CJHDevCo breached the lease agreement or the RMOA, and that investors should transact directly with the BCDA because it now controls CJHDevCo. False.
CJHDevCo ran its own advertisement disputing the BCDA’s claims. Contrary to the BCDA ad, the appellate court upheld the Baguio City Regional Trial Court’s order that the two parties must submit all their disputes to arbitration, and declined to rule on the issues pending in arbitration. The appellate court said:
“Finally, the records of the case reveal that the factual allegations of the parties already refer to the merits of the controversy between them, which is the alleged breach of their [RMOA]. These are best threshed out in the appropriate arbitration proceedings.
“It bears emphasis that the parties in this case have been directed to submit their controversies to arbitration, with due stress on the policy of the Supreme Court to encourage arbitration as an alternative method of dispute resolution.”
When one sees what CJHDevCo has done to Camp John Hay, one can understand why the BCDA is attempting a takeover. CJHDevCo has built two world-class hotels—the Manor and Forest Lodge—that are now the major tourist destinations in Baguio, as well as commercial and recreation areas.
I was told that in the coming years, the following developments will be pursued:
• Phase 2 of Forest Lodge, called The Suites, that will add another 200 rooms to the existing 208 rooms.
• The Mile High commercial area, a mixed-use project that will include a condominium-hotel.
• The Snyder Projects 1 and 2, two private high-end residential projects and hotels located near the golf club.
• The Eco Village, another mixed-use retail component that will have shops, souvenir stores and restaurants that will focus on the culture of Baguio.
So far, CJHDevCo has paid the BCDA P1.44 billion in rentals, 25 percent of which was to go to the city of Baguio. However, the BCDA has apparently remitted only P256 million to Baguio.
CJHDevCo stopped paying when it sued for arbitration because its position is that the BCDA owes it money due to delays caused by the failure to set up the one-stop shop, among other breaches of their contract.
The big question is why the BCDA under Casanova wants to take over CJHDevCo’s hotels when the latter has done a wonderful job not only for tourism in Baguio but also for the preservation of the last sanctuary of pine trees. Maybe so the project can be given to another developer?