Will the Ortigas Center Master Plan Take Off?

(The Philippine Stock Exchange Center and other commercial and residential
landmarks of Ortigas center, Metro Manila)

Ortigas and Company chief operating officer Rex Drilon said he doesn’t want Ortigas Center (OC) to be the “kitchen of Metro Manila” so his company is pushing for the implementation of a P200 million master plan to redevelop the business district and reaffirm his status as “the business center” of the metropolis. Prepared by Palafox Associates, the master plan—to be implemented by the Ortigas Association that manages OC—aims to transform the Ortigas Center (OC) into a transit-oriented, mixed use, pedestrian friendly business center. Will the master plan take-off?

By just looking at the map, one can sense that Ortigas is a natural winner. It’s practically right at the center of the metropolis. It’s accessible by rail (i.e. the Metro Rail Transit) and Metro Manila’s major transport routes (Edsa Avenue) and it’s surrounded by middle-to-upper class residential subdivisions. Major urban services and amenities for shopping, entertainment, education, and travel are already in place. The center has been chosen by big business organizations (e.g. San Miguel, Robinsons, SM group of companies) the other half of the Philippine Stock Exchange) as well as by international multilateral institutions (e.g. Asian Development Bank, World Bank) as their headquarters. Lately, it has attracted a lot of internationally known call centers and outsourcing companies like Client Logic and Ambergris Solutions.

Not getting the buzz
But why is it that it doesn’t seem to get the buzz as a business center these days? Why is it that people usually think of Makati when talking about the metropolis’ “business or corporate” center?

As an observer, one cannot help but think that all these winning factors may have become OC’s liabilities. It’s so easy to rest on one’s laurels once you have all the major big-name locators like the ADB and San Miguel Corporation. That’s probably the reason why there does not seem to be any new ground-breaking projects in the area last five to seven years. Even Drilon admits to the following problems within the OC:

• No link from the major public transport hubs to the inner core of the CBD. People without cars could easily get there through MRT by disembarking either at Shaw or Ortigas Avenue. Once you get there, however, you have to get a taxi to go around. That makes it very expensive place to go.

• OC is not conducive to walking. A pedestrian, say an employee in one of the offices there trying to saving money, may try to walk but the roads are narrow and uncovered. In just a few minutes, you will be sweating like crazy. During the rainy season, you better bring umbrellas unless you fancy yourself running like crazy towards the nearest shop when the rains fall. It seems like the planners simply saw buildings and cars—no people!—when they designed the OC.

• Traffic congestion, confusing traffic. This is expected because, without pedestrian facilities, even office workers inside OC have to drive a car a few blocks away to preserve their white-collar dignity.

• Confusing signages (not based on international standards), decaying and ugly welcome arches.

• Unplanned developments within properties as well as unfinished and decrepit buildings and unmaintained vacant lots.

• And surprise, surprise!: OC doesn’t have a centralized sewage facilities.

No wonder why land values in Ortigas is less than half that of Makati. These days a prime lot in Makati could easily fetch as high as P120,000 per square meter while the same piece of real estate would only command P75,000 per square meter. Vacancy rate now in the Makati central business district (CBD) is just about 5 percent while in the OC is still in the double digit even though OC has pioneered the hosting of call centers and other outsourcing companies several years ago. Now there are fears that land values in the OC may freeze for long time as call centers are more likely to locate in city centers where they could attract the required labor pool. Call centers and outsourcing companies themselves have about 14 new emerging business centers all over Metro Manila on top of the original five—Makati, Cubao, Binondo, Escolta, and Ortigas—to chose from. There are trends now for call centers to locate operations in malls (e.g. SM in Pasay, Robinsons in Novaliches). Unless, the OC could reinvent itself, it may just lose its luster.

Towards a walkable city
Drilon doesn’t want that to happen that is why his company has initiated the preparation of the master plan. In tangible terms, the masterplan translates to the construction of elevated walkways; covered walkways; improved streetscapes, sidewalks, more greens, better lamp posts; and other components including better traffic management, security and fire-fighting facilities. The entire plan will cost P200 million.

From the MRT station in front of the ADB, the master plan will provide elevated pedestrian walkways on opposite directions towards SM Megamall and Robinsons Galleria Mall. From the malls, pedestrian may chose to access the offices, hotels, residential areas either through covered walkways or through public transport. There will also be 60-foot pylons to serve as entrance markers for those who are entering OC through private vehicles. The business center will also spent P159 million to improve the streetscapes in Julia Vargas, ADB and San Miguel Avenue, Ortigas Junior Avenue, Bank Road and St. Francis Streets.

So we go back to the earlier question—will it work? Conceptually, the plan is excellent. You can’t fault for what is there. You can only criticize it on what is not there.

For instance, a person who loves to drive cars would not see the construction of car parks there. That’s one glaring fact. Nevertheless, that’s probably deliberate given the fact that Palafox Associates is a known advocate of neo-urbanism, a global movement promoting compact, “walkable,” and green cities. Drilon himself doesn’t see the need for one because revenues from a car park on per square meter basis is lower than any other commercial land uses. This writer’s view is that OC could actually do away with it given the fact that it’s accessible through the MRT. The proposed MRT 8, envision to pass through the center of OC, will also provide greater access. So there would be less need for a stand-alone car park especially if the MRT 8 would have its own park-and-ride facility. Besides, an additional car park inside OC will just attract more vehicle traffic thus worsening congestion and defeating the rationale for a calmer, pedestrian- and transit-oriented city. Nevertheless, SM and Robinsons malls might yet have the incentive to expand their own car parks as they are the ones to benefit from increased traffic.

Cash register redevelopment?
The master plan may really be just about raising property values, a pure cash register redevelopment effort. There seems to be no intention of providing museums, public or street art (e.g. sculpture of the best of us Filipinos), monuments, or sports facilities. That means that planners or OC officials simply look at clients (e.g., workers, corporate stakeholders, shoppers, and kibitzers) as plain consumers. Their participation would simply be as worker bees or as buyers. They are not supposed to enjoy and partake of the finer things in life—those intangibles that enable us tower above the primates and other dwellers of the animal kingdom. If one has nothing to buy (e.g., no money to shop, no resources to set up a business) or nothing to sell (e.g. no skilled labor to offer, no product or services to provide), the place is not for you.

You can find a lot of public art pieces and monuments to greatness—these representations of our noble aspirations and intentions, our dreams, our potentials—in most cities of developed countries. Those business centers allow for these public art pieces and monuments because their economic elites feel that, besides making money, they also need to uplift the level of human existence beyond the tangibles and the drudgeries of city life. It’s the phenomenon of economic elites performing their role as social reformer! Not in the OC. But then again, why should OC bother when most business centers old and new don’t have them as well?

Institutional constraints
As is, the master plan is will take off and make lot of difference in the OC provided the institutional factors are there. Institutional factors could actually be its Achilles Heel. There is no doubt the Ortigas family is willing and eager to push with the redevelopment plan. In the last two years, the Ortigas & Company—sans the glare of media—has been undertaking a lot of property development projects. It has refurbished Greenhills and recently has completed Tiendesitas, a 30,000 square meter shopping complex showcasing Philippine products, cuisine, crafts, plants, and other uniquely made Philippine products. (Tiendesitas is part of Ortigas & Company’s the larger 18.5 hectare development project at the corner of the Ortigas Avenue and E. Rodriguez Avenue in Barangay Ugong, Pasig that will host the SM hypermart, a fun ranch for kids, an auto mall, a wellness center, and a technology corridor).

But the Ortigases’ main hurdle would be the fact that they have less power in the Ortigas Center Association that is managing the OC than one could imagine. Rex Drilon says while Ortigas & Company is actively pushing for the speedy implementation of the master plan, they only have one seat in the 15-person board. Unlike Makati, the Ortigases had also turned over ownership and control of the road network within the OC to the government, thus giving them less influence in traffic management and redevelopment of roads in the OC. “You can’t spend private money on a public property, and the government also couldn’t spend public money on private property,” said Drilon.

OCAI is composed about 200 member properties, counting among its members the leading companies like the Philippine Stock Exchange, San Miguel Corporation, SM, and the Robinson Malls that offer more than 750,000 square meters of retail spaces. Yet the OCAI actually has no money to implement the master plan because of it charges only P0.10 per square meter for membership dues. How small is that amount? Consider Makati: members of Masea, a similar organization that runs Makati CBD charges P4.50 per square meter, so they have so much money for maintenance, and continuing development. The group also has not turned over control of the road network to the local government so it can maintain good road quality standard that is not possible if it’s been under public ownership and control.

Where's the money?
So where would the OCAI get the P200 million for the master plan? Drilon hopes that local government units—Quezon City, Mandaluyong, and Pasig—would shoulder most of the cost. It appears that the OCAI is also praying that the Metro Manila Development Authority (MMDA) would also contribute some money. About 65 percent of OC belongs to Pasig, 30 percent Mandaluyong, and 5 percent Quezon City while peripheral roads are under the jurisdiction of MMDA and DPWH. Drilon thinks that it’s just right that LGUs should bear the bulk of the cost because of the huge tax revenues that these LGUs generate from the OC. And rightly so. But the practical question is—how would these LGUs, MMDA, and DPWH share the financial cost? That’s a difficult to answer considering that Quezon City will soon be developing its own business district along Quezon Avenue adjacent to Edsa.

From the “political market” point of view, it would appear that most users of OC are not going to vote in said municipalities. So while OC may generate a lot of cash for LGUs, they don’t provide the votes that would enable local politicians to win elections. The mayors, therefore, may have to tendency to priorities expenditures on vote-rich and poorer communities and less “on the rich” ones like the OC. Of course, the MMDA and the mayors are probably “progress-oriented” and that they are not going to jeopardize the goose the lays the golden eggs. However, putting the burden of financing the master plan on three LGUs and MMDA puts its fate on a political process that usually takes so much time to complete. That’s probably the reason why Drilon expects the entire plan to be completed within 5 years. If one is used to the decision-making process of the private sector, five years might be too long a time frame considering that the pace of change in competing business centers—20 of them all over the metropolis!—are accelerating.