Hotel sues City to stop lot sale to another hotel

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Monday, March 31, 2014

THE Cebu City Government allegedly violated government auditing rules when it awarded a 2,357-square-meter lot in Barangay Lahug to Hotel of Asia Inc.

Waterfront Cebu City Casino Hotel Inc., through its lawyer Edmund Villanueva, said yesterday that the bidding on the property should have been declared a failure under a Commission on Audit (COA) circular.

Waterfront filed a civil case for certiorari and prohibition to stop City Hall from selling the lot, located next to the entrance of the Waterfront Cebu City Hotel in Lahug, to Hotel Asia.


Waterfront also applied for a 20-day temporary restraining order (TRO) so that the sale will not be consummated.

Villanueva, during the summary hearing of his client’s civil petition, told Regional Trial Court Branch 9 Judge Alexander Acosta that the City's committee on awards did not open the envelope containing the bid offer of Hotel of Asia, the lone bidder, during the public bidding in December 2013.


Such practice violated COA regulations and can be basis to declare the bidding a failure, said Villanueva.
Villanueva said the City Government also committed “flagrant violation” of the COA rules since there was also no COA representative during the bidding.

City Legal Officer Gerone Castillo, when interviewed after the hearing, begged off from commenting on the merits of the case.

“We will resolve first whether the court has jurisdiction over the case based on their (Waterfront Hotel) allegations,” said Castillo.

He said Waterfront should have alleged statement of facts in its petition.


Although Hotel of Asia made a 50 percent down payment of the purchase price, the Cebu City Council has yet to pass a resolution to authorize Mayor Michael Rama to sign the contract.

Named defendants in the suit are City Mayor Michael Rama, the committee on awards represented by Attorney V Jose Daluz III, the
City Council through its presiding officer Vice Mayor Edgardo Labella and Hotel of Asia.

Hotel of Asia, in its winning bid, offered to buy the property at P35,500 per square meter or about P83.7 million.

The resolution to authorize the mayor to sign the contract with Hotel of Asia has been deferred by the City Council twice and was referred to the committee on laws, ordinances, public accountability and good government for report.


In yesterday's hearing, the city lawyers argued that the petition should be dismissed outright since the trial court has no
jurisdiction over the case.

The city lawyers said Waterfront filed an “inappropriate case,” citing the Rules of Court.

But Waterfront lawyer Villanueva said the public bidding was “patently irregular and anomalous” and thus a status quo order should be observed.

The hotel lawyer also asked city lawyers to confirm whether or not Mayor

Rama issued a conditional sale to Hotel of Asia.

Villanueva also asked Judge Acosta to subpoena Rama to appear in court during the next scheduled hearing on Friday.
The judge gave both parties three days to submit their memoranda.

Published in the Sun.Star Cebu newspaper on April 01, 2014.

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