COA Nullifies Cebu City’s Land Swap Deal with Private Firm

The Commission on Audit (COA) has nullified the deed of exchange between City Hall and a private realty firm involving a city-owned lot on Salinas Drive, Barangay Lahug, this city.

The land swap was through then mayor Tomas Osmeña and Felix Gochan and Sons Realty Corp.

“We are very happy with this decision. There are no more questions as to whether we can sell the property or not. There is no more legal impediment to proceed with the sale,” said Cebu City Legal Office chief Jerone Castillo.

“This really means that the city retains ownership of the property and we have every reason and every legal right to proceed with the sale,” he said.

In 2009, COA disapproved the exchange of Cebu City’s Lot 917 with an area of 2,357 square meters for two properties of the Gochans in Barangays Guadalupe and Lorega with a combined area of 8,637 square meters.

COA pointed out that Lot 917 was worth P20.1 million more than the Gochans’ properties.

It was pegged at P44.78 million while the two properties that were supposed to be exchanged for it were valued at P24.64 million.

The Gochans filed a motion for reconsideration, saying that while the market value of their properties was much lower, they had already lost close to P109 million in rent from 1970 to 2009 because the properties were used for public service.

Their property in Banawa houses a part of the Banawa Elementary School, while the property in Lorega has been declared as a socialized housing site.

The Gochans also filed a supplemental motion for reconsideration, saying that the rental losses had ballooned to over P161 million.

In June 2011, COA through then Commission Secretary Fortunata Rubico issued a notice of finality of decision.

But Gochan said the decision was not final yet because their supplemental motion for reconsideration remained unresolved. In December 2011, a second supplemental motion was filed by the Gochans.

But relying on the notice from COA, the city held a bidding for Lot 917 and awarded the property to Hotel Asia, the lone bidder, in December 2013.

Its bid was P83.6 million.

In January 2014, Hotel Asia deposited more than P46 million as partial payment to the city.

But in June last year, COA rendered a decision that considered the Gochans’ supplemental motions for reconsideration.

COA also approved the 2005 deed of exchange because of the feared displacement of the school and socialized housing site.

This time, it was the city that filed a motion for reconsideration, which was subsequently granted. (PNA) CTB/EB/EDS