Camp John Hay investors being bullied

The Bases Conversion Development Authority (BCDA) under its president Arnel Casanova is bullying investors, locators, lessees, tenants, unit owners, lot owners, and golf club members in Camp John Hay and has threatened them with eviction if they do not sign an onerous deed of assignment.

The document contains these provisions:

An admission that the residents, etc. have no right to stay there.

An admission that they have no right to sue the BCDA for its part in what happened.

An agreement to unspecified future terms.

An agreement that the interpretation of the assignment agreement or any dispute should be heard only by a court in Taguig City, not Baguio City.

An agreement to sign in advance any affidavit against Camp John Hay Development Corp. (CJHDevCo) and testify against it in any court or before any agency, even if the contents of the affidavit are yet unknown.

Now, who would be stupid to sign such a deed of assignment? But the BCDA is threatening the residents, etc. with eviction if they do not sign it.

The BCDA is like a crocodile caught in a trap and trying desperately to free itself. Yet the situation that it finds itself in now is of its own making.

It lost a case against CJHDevCo arising from the lease and development of Camp John Hay. The Philippine Dispute Resolution Center Inc. (PDRCI) has ruled that both parties violated their contract.

The BCDA did not set up, as agreed upon, a one-stop center to prevent red tape and speed up the issuance of permits. As a result, permits were delayed or not issued at all, thus preventing CJHDevCo from developing the camp. With no development, CJHDevCo could not raise enough funds to pay its rentals to the BCDA. The BCDA sued CJHDevCo for not paying P3.3 billion in rentals—an accusation that the arbitrators dismissed as without basis. In addition, the BCDA was ordered to return to CJHDevCo P1.4 billion in rentals that had been paid to it.

In exchange, CJHDevCo was ordered to return Camp John Hay to the BCDA. The developer said it would comply as soon as the BCDA refunds the P1.4 billion.

It appears that the BCDA under Casanova has no intention of making the refund, but it insists on the return of Camp John Hay to it. Recently, it sent armed guards to seize the two 5-star hotels, The Manor and Forest Lodge, that CJHDevCo had built at enormous expense. The hotel security guards resisted and the Baguio regional trial court issued an injunction against the BCDA.

CJHDevCo said: Pay us the back rentals ordered by the arbitrators and we will return the whole camp to you.

Last March 27, the Baguio court confirmed the final award by the PDRCI of P1.4 billion to CJHDevCo by the BCDA. The court also affirmed that CJHDevCo does not owe the BCDA P3.3 billion in back rentals that it had been trying to collect from the developer.

Significant in the decision of the court is that the vested right holders—the existing investors and locators, sublessees, unit owners, etc. who acquired their interests in good faith—will be governed by the law on obligations and contracts.

“This makes it clear that the rights of locators, sublessees, unit owners, lot owners and golf club members are to be protected by law, and cannot be evicted,” explained CJHDevCo CEO Alfredo Yñiguez. “This is because Article 1385 of the Civil Code, which is the law relied upon by the vested rights holders, provides that an order for mutual restitution, as in this case, cannot include properties currently in the possession of third parties who acted in good faith, including and especially our locators and lessees who have fully paid in good faith.”

Yñiguez added: “We hope that by virtue of this very clear order, Mr. Casanova and/or representatives of BCDA will stop threatening locators and lessees with eviction. If they continue threatening our locators and lessees, we assure them that we are ready to provide them with lawyers against such harassment.”

Camp John Hay is an economic zone that is a project of the government’s Public-Private Partnership Program where private investors are urged to invest in government infrastructure projects. Thus, the BCDA’s job is to encourage investors, not harass them. Its gestapo tactics are driving investors away.

Under Casanova, the BCDA has lost P5 billion for the military’s modernization program: P3.3 billion in what could have been receivables had it accepted the last revised restructured agreement of CJHDevCo, P1.4 billion in paid lease rental that it will now have to return to CJHDevCo, and P500 million that was offered to it as initial payment for a proposed restructured agreement late in 2011.

This does not include the annual lease rentals, amounting to P450 million for three years since 2012, that the BCDA would have received had Casanova not refused every proposal from CJHDevCo, 25 percent of which would have gone to Baguio City as its share of the annual rent for Camp John Hay. Had the BCDA gone into negotiations with CJHDevCo instead of opening the door to a rescission of the contract, the BCDA would have P5.1 billion in rentals for the remaining term of the lease (2012 until 2046) from the P150-million annual rental fees alone.