“That has to be dirty, crooked politics. And we thought that after Caloocan was run by dirty politics for such a long time, it finally had good governance. How wrong we all are.”
by Ducky Paredes
The story I was reading in the papers made no sense to me.
How can a mall continue to operate in a city without paying its taxes for the last 23 years. This is an impossibility. How can this happen through the terms of three different mayors – Asistio, Malonzo and Ericta?
As it turns out what the papers reported on their front pages is not the story at all.
The real story is about politics – dirty, crude and crooked.
On June 14, 1983, the City of Caloocan, the owner of a parcel of land with an area of 22,685 sqm, more or less, then covered by TCT No. 54327 leased it to Gotesco Investment, Inc. for a period of 25 years renewable for another 25 years at the option of Gotesco.
The Gotesco Grand Central Mall was built on the leased premises.
On August 2, 1990, Caloocan’s Sangguniang Panlungsod enacted Ordinance No. 068, series of 1990. This authorized Mayor Macario A. Asistio, Jr. to negotiate and sell the subject property for a consideration not lower than P6,000.00 per sqm.
On September 6, 1990, Mayor Asistio offered the land to Gotesco at that price or a total amount of P136,144,800.00. Gotesco agreed. Thus, the parties executed a Deed of Absolute Sale.
The total amount was later increased to P182,085,078.30 or at the rate of P8,026.39 per sqm as recommended by the Commission on Audit (COA) which conducted an in depth study on the fair and reasonable valuation of the subject property.
In 1995, the term of Mayor Asistio ended.
On October 23, 1997, Caloocan’s Sangguniang Panlungsod through an ordinance ordered the city and Gotesco to sign an amended deed of absolute sale, the terms and conditions of which were pursuant to the COA decision. For its part, Gotesco agreed and executed an “express consent to the novation of the deed of absolute sale” with an “amended deed of absolute sale”. Gotesco wrote out a check for P182 million, as well as P910,425.39 as transfer tax and P9.7 million as real-estate tax to Caloocan.
But, the Caloocan City Mayor (then already Reynaldo Malonzo) refused the payment. Gotesco filed Civil Case No. C-18274. Since the original lease was for 25 years after 1983 or up to 2008, renewable for another 25 more, Gotesco continued to make its lease payments.
In 2004, a new mayor was elected.
In May 2006, the Supreme Court (SC) junked the bid of Caloocan to cancel the title of Gotesco. In a 15-page decision, the Court affirmed a September 12, 2000 resolution of the Court of Appeals that ordered the dismissal of a complaint, docketed as Civil Case No. C-18337, filed by former Caloocan Mayor Malonzo before a trial court.
On September 19, 2008, Gotesco Investments, Inc. and the City of Caloocan executed a Memorandum of Agreement (MOA) relative to the payment by Gotesco of the purchase price as embodied in the Deed of Absolute Sale dated September 6, 1990. Gotesco tendered to and Caloocan, through the Office of the City Treasurer, acknowledged the receipt of two (2) Manager’s checks amounting to P30,000,000.00 as down payment and thirty-six (36) post-dated checks representing the balance of the purchase price.
On September 25, 2008, Caloocan, through its City Legal Officer, requested a modification in the MOA to reflect the true and correct purchase in the amount of P182,085,078.30. In the same letter, it enclosed a document titled “Express Conformity or Consent to the Change in MOA pertaining to the Purchase Price,” which Gotesco, through Jose C. Go, signed. In compliance with the aforesaid Express Conformity etc, Gotesco tendered 36 post-dated checks in the total amount of P45,970,278.30 all payable to the City Treasurer of Caloocan City, which in turn, acknowledged the receipt of said checks.
End of story?
No way. On October 02, 2008, Caloocan told Gotesco’s lessees/tenants that they should not renew their contracts of lease with Gotesco. Likewise they informed these tenants that instead of paying their space rentals to Gotesco, it should be paid to Caloocan because the city had again become the owner of the property by virtue of an alleged auction sale due to non-payment of land taxes over the last 23 years.
On December 16, 2008, Gotesco filed before Manila Regional Trial Court Branch 11 under civil case no. CV-08-120551 an Application for a Temporary Restraining Order (TRO). This was granted by the court.
The TRO enjoined Caloocan from taking over and closing the subject property and mall, disrupting Gotesco’s continuous business operation and to desist from spreading disinformation and stop discouraging the tenants or lessees from renewing their contracts of lease with Gotesco. The Register of Deeds of Caloocan City is likewise enjoined by the said TRO from registering any and all documents relative to the auction sale of the aforesaid properties and/or canceling T.C.T No 326321.
On December 24, 2008, a Writ of Preliminary Injunction was issued by the same court.
Still, on March 6, 2009, a Writ of Possession was issued by the Regional Trial Court Branch 126 of Caloocan City in favor of Caloocan.
The eviction order was based on Caloocan’s claim that Gotesco owed the city P722.3 million (more than three times what the city had just received from Gotesco as payment for the land) in unpaid real property taxes covering 23 years.
But, if, in effect, Gotesco was leasing the property from Caloocan over the last 23 years, shouldn’t it have been Caloocan which should paid the land taxes on its property? Do lessees pay the land taxes on the property they are leasing?
Gotesco actually became the owner of the land on which it built its mall only on September 19, 2008, when it signed a memorandum of agreement with Caloocan City on the terms of payment for the P182,085,078 purchase price of the land.
This being the case, Gotesco would only be liable for real property taxes on the land from September 2008 onwards, and not when it was just leasing the land.
But, after the sale was finally perfected and the money finally paid to Caloocan, what did the present mayor do? He claimed that Gotesco had not paid the land taxes during all this time that Gotesco was only leasing the land from the city.
That has to be dirty, crooked politics. And we thought that after Caloocan was run by dirty politics for such a long time, it finally had good governance. How wrong we all are. The present Mayor Enrique “Recom” Ericta may actually be worse than the last two!
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hvp 03.15.09)
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