Sunvar Case: The Actual Facts

sunvar case

Sunvar Realty Development Corporation, which will be referred to as simply Sunvar on this document, is facing a government bid to eject due to allegations of illegal occupancy. Sunvar is located within a 2.9-hectare property found between De la Rosa and Arnaiz Streets in Legazpi Village, Makati City.

The government publicly stated its desire to eject Sunvar although it already paid in advance a P16.8-million lease with Technology Resource Center Foundation Inc. (TRCFI), with functions assumed by the Philippine Development Alternatives Foundation (PDAF). The contract is until December 2027.

As a revert to the said allegations, Sunvar wishes to make some clarifications regarding the matter.

Leasing an extended area

In December 1977, the government and National Power Corporation (NAPOCOR) decided to lease 125,607 square meters of undeveloped property to TRCFI. The said property spans from Bangkal to Dasmarinas Village, Makati City.

Sunvar made TRCFI aware of its interest in sub-leasing 3,000 square meters of this property. At that time, it needed a parking area for its Makati Squares shoppers, moviegoers and other frequenters. TRCFI insisted Sunvar to rent the entire 22,924 square meters instead.

The expanded hectarage had a narrow opening that can only be accessed from Arnaiz Street. Amorsolo creek also blocked the front. A portion of the area was occupied by informal settlers, particularly across Makati Medical Center. Not to mention, the strip to be leased had no basic utility services such as electricity, water and communication. There was no paved roads and drainage either.

Because of its strategic need for the Amorsolo access, however, Sunvar agreed to the all-or-nothing sub-lease in August 1980.

Developing the leased area

Sunvar introduced developments where possible despite the fact that only 50% of the leased area is usable for constructions. It also subleased to other developers under the same rights provided by the lease agreement with TRCFI.

That being said, today, erected on this once barren land are structures including The Gallery, Mile Long Theme Center and Premiere THX Cinema, among others.

Paying the 50-year contract in full

TRCFI’s long-term sub-lease agreement with Sunvar should cover a 50-year period wherein the initial period was set at 25 years. Sunvar may exclusively renew the rental period for another 25 years. To settle the lease, Sunvar paid TRCFI the full advance payment for the rent amounting to P16.8 million. The amount covered the entire contract period.

Under the sublease agreement, Sunvar needs to notify the lessor in writing its decision to exercise its option to renew the sublease not less than six months before the end of 2002. In April 2008, Sunvar notified the government, NAPOCOR and TRCFI. Nonetheless, TRCFI had already been dissolved, but the PDAF assumed its functions.

Sunvar tendered rental payments for the renewed period.

Respecting the sanctity of PPP

In brief, the government mandated NAPOCOR to privatize all its assets hence the latter informed PDAF of the sublease’s non-renewal. A sub-lease that is essentially a private-public partnership (PPP), Sunvar wanted that the government and NAPOCOR ought to honor the terms and agreements stipulated in the contract.

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