2009 R - 162 - ACCEPTING THE PROPOSAL OF SM PRIME HOLDINGS, INC., AND APPROVING THE COMPETITIVE CHALLENGE PROCEDURE AS A MODE OF AWARDING THE LEASE

EXCERPTS FROM THE MINUTES OF THE REGULAR SESSION OF THE SANGGUNIANG PANLUNGSOD OF OLONGAPO, HELD ON OCTOBER 28, 2009, AT THE CITY HALL.

PRESENT:

Hon. Cynthia G. Cajudo - - City Vice-Mayor & Presiding Officer

Hon. John Carlos G. delos Reyes- -City Councilor

Hon. Rodel S. Cerezo- - - “ “

Hon. Edwin J. Piano- - - “ “

Hon. Angelito W. Baloy - - - “ “

Hon. Aquilino Y. Cortez, Jr. - - “ “

Hon. Anselmo A. Aquino- “ “

Hon. Elena C. Dabu- - - - “ “

Hon. Jonathan G. Manalo - - - “ “

ABSENT:

Hon. Gina Gulanes-Perez - - - City Councilor

(On Official Business)

Hon. Sarah Lugerna Lipumano-Garcia - - City Councilor

Hon. Cheenee F. Hoya- - - SK Federation President

(On Official Business)

RESOLUTION NO. 162

(Series of 2009)

A RESOLUTION ACCEPTING THE PROPOSAL OF SM PRIME HOLDINGS, INC., AND APPROVING THE COMPETITIVE CHALLENGE PROCEDURE AS A MODE OF AWARDING THE LEASE CONTRACT RELATIVE THERETO, SUBJECT TO EXISTING AUDITING RULES AND APPLICABLE LEGAL REQUIREMENTS

WHEREAS, on 22 October 2009, SM PRIME HOLDING, INC. submitted an unsolicited proposal for the long-term lease of the Olongapo City Mall containing the following salient features: (a) a lease term of twenty five (25) years renewable for another twenty five (25) years; (b) assumption of the city’s obligations to DBP and LBP amounting to PhP112,612,308.00; (c) a fixed annual lease rate equivalent to Pesos TWENTY-FIVE (PhP25.00) per square meter or FIVE PERCENT (5%) of the prevailing rental income of the property for existing retail space whichever is higher; (d) performance bond equivalent to an amount to be determined within the range of 5%-10% of the overall present value of the Lease Contract; and (e) shouldering the entire redevelopment cost for the entire project;

WHEREAS, the proponent is a well-known and respected real estate developer and retailer, with a cumulative project cost investment in the entire country of TWENTY BILLION PESOS (PhP20,000,000,000);

WHEREAS, the said proposal is hereby being accepted by the City – which acceptance however shall not bind the City to enter into a lease contract but shall only serve as the “go signal” for further negotiations;

WHEREAS, the Competitive / Swiss Challenge Mode is a legally sanctioned mode of bidding, and is defined under Commission on Audit (COA) Decision NO. 2009-064 (dated 20 July 2009) where it was held that “the Swiss challenge proposal approximates the nature and requirements of a public bidding which are essentially transparency and competitiveness”, ``it is just a variation of the entire public bidding process”;

WHEREAS, the City Mayor is hereby authorized to form a committee that would formulate the Terms of Reference (TOR) for the long-term lease through the Competitive / Swiss Challenge Mode, pursuant to and consistent with existing auditing rules and legal requirements;

NOW, THEREFORE, on motion of City Councilor Edwin J. Piano co-sponsored by City Councilors Rodel S. Cerezo, Angelito W. Baloy, Aquilino Y. Cortez, Jr., Anselmo A. Aquino, Elena C. Dabu and Jonathan G. Manalo, with the majority decision of the Members of the Sangguniang Panlungsod present;

RESOLVED, AS IT IS HEREBY RESOLVED, by the Sangguniang Panlungsod in session assembled to Accept as it hereby Accepts the Proposal of SM Prime Holdings, Inc., and Approving the Competitive Challenge Procedure as a Mode of Awarding the Lease Contract Relative Thereto, Subject to Existing Auditing Rules and Applicable Legal Requirements.

APPROVED, October 28, 2009.

CYNTHIA G. CAJUDO

City Vice-Mayor & Presiding Officer

GINA GULANES-PEREZ JOHN CARLOS G. DELOS REYES

City Councilor City Councilor

(On Official Business) (Opposed)

RODEL S. CEREZO SARAH LUGERNA LIPUMANO-GARCIA

City Councilor City Councilor

(Absent)

EDWIN J. PIANO ANGELITO W. BALOY

City Councilor City Councilor

AQUILINO Y. CORTEZ, JR. ANSELMO A. AQUINO

City Councilor City Councilor

ELENA C. DABU JONATHAN G. MANALO

City Councilor City Councilor

CHEENEE F. HOYA

SK Federation President

(On Official Business)

ATTEST:

ELFLIDA S. SALMON

Council Secretary

APPROVED BY HIS HONOR, THE CITY MAYOR ON ___________________.

JAMES GORDON, JR.

City Mayor

ATTEST:

DELFIN A. JUICO, JR.

Secretary to the City Mayor