The owner of Sofitel Philippine Plaza Manila has warned the Government Service Insurance System that the state-run pension fund has more to lose if it ejects the hotel operator from two lots allegedly being illegally occupied.
As the two parties could not reach an agreement, GSIS chief legal counsel Isagani L. Cruz Jr. told the Inquirer that they already informed Philippine Plaza Holdings Inc. (PPHI) last Thursday that an ejectment and collection suit would be filed this week.
But in a May 4 position paper addressed to GSIS president and general manager Jesus Clint O. Aranas, PPHI president Esteban G. Peña Sy claimed that “the adverse effects of ejecting PPHI from the premises far outweigh any perceived benefits to GSIS.”
Aranas had claimed that PPHI owed the GSIS at least P101.6 million for the period 1993 to 2016.
But in the position paper, a copy of which was obtained by the Inquirer, PPHI said that “there is a misconception that GSIS will be generating more income by getting back lots 19 and 41 and leasing them out separately.”
“GSIS still has quite a few pieces of properties nearby which are not yet leased out. Whether GSIS can lease out lots 19 and 41 for commercial development and how much income can be generated is still uncertain,” PPHI said.
The current market value of lot 19 is P384 million, while lot 41 is valued P362.7 million, an earlier GSIS fact sheet showed.
Also, “under the existing lease contract, GSIS must shoulder the relocation costs of the hotel facilities and equipment, which can amount to no less than P50 million,” PPHI said.
In order to relocate the facilities and equipment, PPHI may have to shut down hotel operations for six to eight months and may not be able to maximize profits, thereby decreasing the rent to be paid to GSIS and the pension fund would lose an income of around P80 million, PPHI added.
“The relocation of the facilities and equipment will no doubt affect the operations of the hotel and, as a consequence, less operating revenue may be generated, which will, throughout the remaining term, affect the monthly rental income of GSIS to a great extent,” it said.
“After 23 years, the hotel will become a property of GSIS. GSIS should really think it over whether it wants to get a hotel in world-class standard or a hotel with air-con cooling towers located right in the middle of its parking area,” it added.