2009 R - 169 - APPROVING THE JOINT RECOMMENDATION OF THE NEGOTIATION TEAM OF THE CITY AND SM PRIME HOLDINGS, INC. RELATIVE TO THE UNSOLICITED PROPOSAL

EXCERPTS FROM THE MINUTES OF THE REGULAR SESSION OF THE SANGGUNIANG PANLUNGSOD OF OLONGAPO, HELD ON NOVEMBER 10, 2009, AT THE CITY HALL.

PRESENT:

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

Hon. Gina Gulanes-Perez - - City Councilor

Hon. Rodel S. Cerezo- - - - “ “

Hon. Sarah Lugerna Lipumano-Garcia - “ “

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- - - “ “.

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

ABSENT:

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

RESOLUTION NO. 169

(Series of 2009)

A RESOLUTION APPROVING THE JOINT RECOMMENDATION OF THE NEGOTIATION TEAM OF THE CITY AND SM PRIME HOLDINGS, INC. RELATIVE TO THE UNSOLICITED PROPOSAL FOR THE LONG-TERM LEASE OF THE OLONGAPO CITY MALL

WHEREAS, under Section 16 of the Local Government Code of 1991 (RA No. 7160), Local Government Units are mandated to promote the general welfare of its people, particularly by, among others, enhancing economic prosperity and social justice, and promoting full employment;

WHEREAS, under Section 18 of the Local Government Code of 1991 (RA No. 7160), Local Government Units are, among others, empowered to lease its real property and/or apply its resources and assets for productive, developmental, or welfare purposes;

WHEREAS, while under Executive Order No. 72 (1987) Local Government Units, through its local chief executive, may enter into direct negotiation for the lease of its properties, the City utilized the public bidding procedure to ensure greater transparency in the process and competitiveness in securing terms and conditions most beneficial to the entire community;

WHEREAS, pursuant to City Council Resolution No. 79 (Series of 2009) dated 24 June 2009, the Hon. City Mayor James Gordon, Jr. was granted authority to negotiate, enter into, and sign a long-term lease agreement with the winning bidder and to prepare the Terms of Reference (TOR) regarding such bidding regarding the Olongapo City Mall;

WHEREAS, the TOR for the aforesaid bidding was formulated and embodied in City Council Resolution No. 114 (Series of 2009) dated 19 August 2009, which was however repealed/superseded by City Council Resolution No. 158 (Series of 2009) dated 21 October 2009 which was promulgated by the City Council to secure the best possible terms and optimum benefits from the long-term lease of the Olongapo City Mall;

WHEREAS, on 22 October 2009, SM Prime Holdings, Inc., a respected major mall developer with an estimated capitalization of Twenty Billion Pesos (PHP20,000,000,000.00) in the country submitted to the City Government of Olongapo, an unsolicited proposal whereby it proposed to lease the Olongapo City Mall with the proposed terms that, among others, it shall automatically assume the City’s obligations with the Land Bank of the Philippines and the Development Bank of the Philippines in the estimated amount of One Hundred Twelve Million Six Hundred Twelve Thousand and Three Hundred Eight Pesos (PHP 112,612,308.00) and shoulder the entire redevelopment cost of the Olongapo City Mall, these aside from remitting lease/rent payments to the City;

WHEREAS, on 28 October 2009, the City Council approved Resolution No. 162 (Series of 2009) essentially (a) approving the “Swiss/Competitive Challenge” method as a proper and legal mode for the awarding of a long-term lease contract over the Olongapo City Mall property, (b) accepting SM’s unsolicited proposal, and (c) authorizing the Mayor to form a committee to negotiate and formalize with SM the applicable terms of reference for the above-described Swiss/Competitive Challenge exercise (the “Committee”), with the foregoing subject to auditing regulations and other pertinent rules;

WHEREAS, as elucidated under Commission on Audit (COA) Decision No. 2009-064 dated 20 July 2009, the Swiss/Competitive Challenge Mode of public bidding is legally sanctioned as “it approximates the nature of public bidding which are essentially transparency and competitiveness”;

WHEREAS, pursuant to the foregoing, the Finance Committee reviewed the unsolicited proposal of SM Prime Holdings, Inc. and thereafter presented to the latter, the terms acceptable and beneficial to the City, with due regard to public interest;

WHEREAS, pursuant to the mandate of transparency and competitiveness in the bidding process, the terms and conditions distilled from the City’s negotiations with SM Prime Holdings, Inc. is embodied in a Memorandum of Agreement which must be confirmed as a condition precedent, subsequent to which the unsolicited proposal to be made subject of the competitive challenge shall be made public;

NOW, THEREFORE, on motion of City Councilor Edwin J. Piano co-sponsored by City Councilors Gina G. Perez, Rodel S. Cerezo, Aquilino Y. Cortez, Jr., Anselmo A. Aquino, Elena C. Dabu, Jonathan G. Manalo and Cheenee F. Hoya 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 approve, as it hereby approves the Joint Recommendation of the Negotiation Team of the City and SM Prime Holdings, Inc. relative to the Unsolicited Proposal for the Long-Term Lease of the Olongapo City Mall.”

APPROVED, November 10, 2009.

CYNTHIA G. CAJUDO

City Vice-Mayor & Presiding Officer

GINA GULANES-PEREZ JOHN CARLOS G. DELOS REYES

City Councilor City Councilor

(Absent)

RODEL S. CEREZO SARAH LUGERNA LIPUMANO-GARCIA

City Councilor City Councilor

(Opposed)

EDWIN J. PIANO ANGELITO W. BALOY

City Councilor City Councilor

(Opposed)

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

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