The facts on the BCDA-SM row over Aura

The dispute over the new SM Aura in Taguig City between the Bases Conversion and Development Authority (BCDA) and Taguig-SM is becoming clearer. This is what happened:

The problem was started by the BCDA. The American Battle Monument Cemetery under the BCDA encroached on parcels of land owned by Taguig and intended for a civic center. The BCDA and Taguig City agreed to swap parcels of land. In exchange for the parcel encroached on by the cemetery, the BCDA gave several parcels of land in Fort Bonifacio to Taguig. The compromise was formalized in two memorandums of agreement (MOAs) signed on Oct. 21, 1999 and Feb. 11, 2004.

The Deed of Conveyance states: “The present Taguig Civic Center, which is part of the property to be conveyed to Taguig City per the MOA dated Feb. 11, 2004, comprising an area of 44,997.46 sq m was encroached upon by the American Battle Monument Cemetery (11,026 sq m), the equivalent area of which BCDA agrees to convey to Taguig through another property in Bonifacio Global City, Taguig.”

In other words, the property was taken out of the coverage of Republic Act No. 7227, as amended by RA 7917.

RA 7227, as amended, requires that “approximately forty hectares (40 has) of land in Fort Bonifacio, Phase 1, shall be retained as national government and local government centers, sports facilities and parks.” However, the law does not identify which lots in that land will be retained as such.

In short, the disputed property was only returned to its rightful owner, Taguig City. The owner, on the other hand, has the prerogative on how to use it.

In the 1999 MOA, the BCDA agreed to convey to Taguig 5.1 hectares of BCDA property in Fort Bonifacio for the Taguig Civic Center.  The Taguig City government invited bidders for the lease of a 1.5-hectare portion of this property. The Terms of Reference stated that it intends to offer a portion of the Taguig Civic Center project site “for lease and development of a retail commercial center/complex.”

SM Prime Holdings Inc. (SMPHI) participated in the public bidding and won.

Taguig City and SMPHI entered into a contract of lease on Nov. 21, 2007 and Aug. 1, 2008 for the lease of the property and its development into a “government office/hotel/office/retail commercial center/complex.”

By virtue of the Deed of Conveyance on Jan. 17, 2008, the BCDA transferred the property to Taguig City, without any land use or zoning restrictions.

It was clear in the Deed of Conveyance that the “BCDA shall no longer pursue and hereby withdraws, drops, relinquishes any and all its claims over the properties specified under Section I of the abovementioned MOA. Also, BCDA shall not place any restrictions on the land use or zoning of the properties…”  The BCDA issued “clean” titles to Taguig, with no liens or encumbrances.

Therefore, whatever claims the BCDA may have on the property has been relinquished. The contractual stipulations in the Deed of Conveyance show the clear intent of the BCDA to unconditionally allow Taguig City to freely use the property or to solely determine the property’s appropriate zoning classification.

Since the subject parcels of land are no longer owned by the BCDA, it is clear that the property is not part of Bonifacio Global City (BGC).  Hence, it is incorrect to claim that SM Aura is a “locator” at BGC and owes BCDA P5 billion “as proceeds from the sale of the former military land property that under the country’s laws must accrue to the AFP modernization program.”

To make sure that the property will be developed into not just a simple civic center but a mixed-use development site, the Taguig City council passed a resolution outlining the design and other requirements that SMPHI should follow in constructing the civic center and the other facilities that will come with it. The resolution allows the construction of facilities within the civic center area like supermarket, department store, cinemas, convention hall, local government and private offices, retail shops, etc. The resolution also defined other uses like hotel, clinic, museum, place of worship, school, public library and other support facilities.

About 4,000 square meters have been reserved for the national and local government center, with 2,593 sq m for sports facilities like basketball and badminton courts.

There is also a park in the form of a roof garden which is accessible to the public regardless of SM Aura’s operating hours. This park has a chapel with an area of 457.35 sq m. Taguig City has priority for its activities and events in the Trade Hall which has an area of 4,400.32 sq m, apart from the actual government office spaces and parking spaces.

SMPHI designed SM Aura into a complete center for both government and private use. It did not simply build a structure intended for a mall alone but a complex complete with recreational and business facilities that the Taguig City government will also use for its official operations.

There is a Trade Hall that can also serve as a civic center and convention center. A 30-story office tower will house some of the city government’s offices from the seventh floor to the 18th floor. The 19th and 20th floors will be used by multinational corporations and BPOs.

Had not Taguig City leased the property for development, it would have spent billions of pesos for its development. By doing so, the city government not only has saved money for its development but will also earn money from the lease.