NDC eyes control of Goodyear site

Goodyear site The National Development Co. (NDC) is retaining its 60 percent shareholdings in, and is still keen on buying the remaining 40 percent of, a real estate joint venture company with American tire maker Goodyear Corp. to take advantage of good property values, its general manager Lourdes Rebueno said.

Rebueno said in a chance interview that the 18-hectare property in Las Piñas, site of the former plant of Goodyear that shut down in 2009, is now worth P2.8 billion.

“The site of the property offers good prospects; it would be a waste if we just dispose of it,” said Rebueno.

For now, Rebueno said NDC is evaluating what development is suited for the site or if could lease it out. “We are evaluating our options. The property market is healthy.”

NDC said Goodyear wants to sell its shares in the JV, Goodyear Real Estate Inc. but not necessarily to NDC as it too is evaluating its options.

The value of the property is placed at P14,000 per square meter. Two years ago, NDC offered to buy out Goodyear for the property for P872 million, exercising its right of first refusal.

Goodyear originally wanted P14,000 per sq. m. but NDC made a counteroffer P10,000 per sq. m. They settled for P12,000 per sq. m. but the deal did not pan out.

The site, located in Almanza, was the home of Goodyear in the Philippines for more than 25 years although Goodyear as a brand had been here for more than 50 years. The property is located along the Zapote-Alabang road and close to the posh Ayala Alabang subdivision.

The government’s policy for crown jewels is to keep them for long-term lease which could give the government a steady stream of revenues earlier estimated at about P1 billion for a 25-year lease contract. However, earlier estimates also said an outright sale of the entire piece of land at P20,000 per sq.m. could be as high as P3.6 billion.

Goodyear’s closure paved the way for the possibility of disposing the property. The tire company’s lease contract with NDC expired in 2000 and until then, the contract had been on extended lease.

The property was among the pieces of property on lease contracts bv American firms  covered by the Laurel-Langley agreement between the Philippines and the United States in 1955 that gave parity rights to American companies, including multinational giants like Citibank, Goodyear Tire & Rubber Co., Caltex, Shell and Mobil.

After the treaty expired in 1974, the US firms donated the lands they owned to the Philippine government, which in turn leased them back at preferential rates.

To facilitate the lease agreement, some companies formed real estate joint ventures with the Philippine government, with the American firms owning 40 percent stake in keeping with the constitutional prohibition for foreign ownership on lands.

Goodyear Philippines used to export 50 percent of their production of different types of tires.

Domingo said NDC will be sourcing part of the money from government financial institutions.
As of now there is no concrete plan for the property but said it is a nice property. Domingo said there is no more available lot in that area that is that big. “I’m sure if we open it up, a lot of companies will be interested.”

source:  Malaya