The City Treasurer has recommended using prevailing market rental rates and upfront leasehold payments for the proposed Maharlika Creative Hub (MCH), projecting that the nearly P1 billion redevelopment investment could be recovered in 12 years at 85% collection efficiency or 10 years at 95%.
City Treasurer Alex Cabarrubias presented six financial scenarios to the Baguio City Council during its regular session on October 12, 2026. The options combined interim rental rates, prevailing market rates or discounted market rates, with or without upfront payments for leasehold rights.
Cabarrubias recommended the scenario using prevailing market rates and upfront leasehold payments. Under this arrangement, tenants would pay for the right to occupy and use commercial spaces for a defined period, proposed at about 15 years.
The study used P950.27 million as the investment basis for the proposed redevelopment. Under the recommended scenario, the projected payback period was 12 years at 85% collection efficiency and 10 years at 95%.
The proposed market rental rates vary by floor, from P1,260 to P1,500 per square meter per month. Cabarrubias said the rates were based on information gathered from nearby commercial buildings.
The study also presented examples of upfront leasehold payments including about P5 million for a 69-square-meter space, P1.8 million for 25 square meters, P445,000 for six square meters and P300,000 for four square meters.
The other scenarios produced longer projected payback periods. At 85% collection efficiency, the study estimated 17 years for prevailing market rates without upfront leasehold payments and 24 years for discounted market rates without the upfront payments. The scenario using interim rates alone projected a 30-year payback period.
Councilors questioned whether the financial projections were sufficiently supported by reliable rehabilitation cost estimates and a clear development plan. Councilor Yuri Weygan raised concerns about the accuracy of the costing and the study’s assessment of the project’s socioeconomic implications. Meanwhile, Councilor Peter Fianza questioned whether the city had settled on the overall direction for Maharlika before proceeding with detailed implementation.
The rehabilitation cost remains preliminary pending the detailed architectural and engineering plans being prepared by the City Buildings and Architecture Office. Officials said the final cost would be used to adjust the financial projections.
The proposed rental and leasehold arrangements were not approved during the session. The City Council returned the proposed rehabilitation to the Committee on Laws and Governance for further work. **Jordan G. Habbiling
