Medellín Officials Begin Revocation Process Of Pricesmart Building Permits

Finance Colombia has obtained documents issued by Medellín’s Second Urban Curate (Curaduria) ordering the commencement of proceedings to revoke the building and construction permits of Medellín’s second PriceSmart (NASDAQ: PSMT) location, currently under construction in a high-income but highly congested area of the city.

The new PriceSmart is being built on Transversal Inferior, a two-lane one-way residential feeder road. (photo: Loren Moss)

PriceSmart is a successful chain of warehouse-club style stores that while headquartered in San Diego, California, operate exclusively in Latin America and the Caribbean, with no stores within the US 50 states or México. Well loved in Colombia, it is no surprise that the company chose to open a second Medellín location, though the Poblado location, a residential area already infamous for traffic congestion is questionable when new high-capacity roadways are being constructed in the nearby, commercialized Las Palmas area, also easily accessible by the high-income bedroom communities of El Retiro, La Fé, and Llanogrande.

The urban curate, or Curaduría, is the local authority in Colombian municipalities responsible for enforcing building regulations and issuing (or not) construction permits.

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The curate issued the following decree (translated by Finance Colombia):

THROUGH WHICH A DIRECT REVOCATION PROCESS IS BEGUN

The Second Urban Curate of Medellín, according to Appointment Decree 0381 of the19th of June 2018, in use of its legal powers and especially those conferred by the Laws 388 of 1997, 1801 of 2016, 1437 of 2011, as well as National Decrees 2150 of 1995 and 1077 of 2015

CONSIDERING

1. That through 202330016551 sent on January 20, 2023, by the Undersecretary of Management and Territorial Control of the District of Medellín, informs that in exercising the functions of urban control and taking into account the presentation of various complaints by Councilwoman Claudia Marcela Ramírez Echeverri, an exhaustive review of administrative acts was ordered through which the PRICESMART project was approved in the property located at 32^nd street with South 11th Avenue.
2. That in developing the function of urban control, said dependency requested detailed information on the advance procedure for the issuance of the urban planning license to the project, for which supporting documentation was requested through the filed document 202230497081 of November 17, 2022. This document was in response to the files 202210411050 of December 6 and 202210412631 of December 7.
3. That the Secretary of Management and Territorial Control of the District, upon receiving the information submitted by this office, proceeded to carry out its analysis, in coordination with the approved urban planning licenses and the applicable regulatory framework, which conceptualizes:
   • The licenses were granted without fulfilling the requirements demanded in the applicable urban regulations, contained in Agreement 62 of 1999, Agreement 23 of 2000 and its respective regulatory file and the provisions of the Agreement 38 of 1990
   • The number of floors and parking spaces does not conform to what is allowed in the residential use areas.
     

     Pricesmart Poblado mandatory construction poster (photo: Loren Moss)

   • There is a mixed application of the standards for commercial use that is contrary to the land use regime.
   • The technical concept was never requested from the Administrative Department of Planning, as contemplated by the norm for the application of previously restricted uses, as for department stores.
4. That, based on this analysis, the Urban Curate is requesting the initiation of the process of direct revocation of the administrative acts through which the PRICESMART project, because in its judgement, in the issuance of the administrative procedures did not take into account the urban regulations adopted in the Agreements 38 of 1990, 62 of 1999, Decree 568 of 2011, since it is considered on the part of the district entity that the issuance of the licenses was carried out in opposition to the law and the constitution and violate the public interest that [the curate] seeks to protect with urban regulations.
5. That, based on this request, the order is to proceed with the review of the decision and inform the municipal administration within ten (10) business days following receipt of the request.
6. That, in order to meet the District’s request, [the curate] is initiating the process, taking note that:
   • Article 2.2.6.1.2.3.10 of National Decree 1077 of 2015 authorizes the application of direct revocation to the administrative act that grants the planning license, making express reference to the procedure enshrined in the Code of Administrative Procedure and Administrative Litigation, specifying that:
     1. They are competent to advance the direct revocation of the licenses, the same curator who issued the act or whoever has been designated as such by means of an administrative act of a provisional or definitive manner, or the municipal or district mayor or his delegate.
     2. They may request the direct revocation of the licenses of the same applicants, the adjoining neighbors of the object property, as well as third parties and competent administrative authorities that have become part of the Procedure.
     3. During the direct revocation process, the file will remain available to the parties for consultation and issuance of copies and the interested party must be summoned, as well as third parties who may be affected by the decision, in order for them to participate and assert their rights. For this purpose, from the beginning of the action, they will be informed, by means of an official letter that will be communicated to the persons indicated above, the reasons that support the process. A term of ten (10) business days will be granted for them to respond to interrogatories.
     4. Once the interrogatories have been carried out and within the term established by the Code of Administrative Procedure and Administrative Litigation to resolve the procedure, the decision will be adopted.
     5. The term to resolve requests for direct revocation is two (2) months from the day after the date of submission of the application. If this term expires without resolution of the request, it will be understood that the request for revocation was denied.
     6. The direct revocation of administrative acts will not proceed with respect to which the petitioner has exercised the remedies.
   • Article 3 of Law 1437 of 2011 establishes the principles that must be taken into account in administrative action, and specifies that by virtue of due process ‘administrative actions will be carried out inaccordance with the rules of procedure and competence established in the constitution and the law, with full guarantee of the rights of representation, defense and contradiction.
   • Articles 93 to 97 of Law 1437 of 2011 enshrine the procedure to advance the direct revocation procedure, specifying in article 97 that when it comes to the revocation of a particular and concrete act “it may not be revoked without the prior, express and written consent of the respective owner”
   • For the Council of State “The direct revocation consists of its own tool of the authorities in administrative headquarters and without validation of prior judicial process, which can be initiated ex-officio or at the request of a party, consisting of the modification or substantial change of firm decisions that have been adopted as a unilateral manifestation of the respective public entity and that have created general or particular legal situations, provided that they are matched with one or more causes or events of provenance provided for in article 93 of the CPACA (EC, Contentious Administrative Chamber, No 17001-23-33-000-2017-00100-02(4103-18),2020, Considerations).
   • This high court ratifies that “the prohibition of revoking administrative acts that: “have created or modified a legal situation of particular and concrete character or recognized a right of equal category” except in the prior, express and written consent of the owner of the respective right. The Chamber notes that, with regard to the possibility that the administration had to revoke administrative acts of a particular nature, in the events in which any of the grounds for revocation already mentioned, in the case of positive facts, or if the illegality in its issuance is evident, the same disappears from the new statute of Administrative Procedure and from Administrative Litigation. Indeed, the two final paragraphs of article 97 of Law 1437 of 2011 prescribe that in cases where the administration considers the unconstitutionality or illegality of an administrative act, or that its issuance took place by illegal or fraudulent means, it must appear before this jurisdiction, to file suit, as long as it do not have the prior, express and written consent of the owner of the rights in the respective administrative act”. (EC, Contentious Administrative Chamber, second section, No 76001-23-31-000-2004-03824-02 (0376-07) 2015 Considerations).
   • Article 99 of Law 388 of 1997, modified by article 35 of Law 1796 of 2016, specifies the scope and consequence of the issuance of the urban planning licenses by stating that “The granting of the urban planning license involves the acquisition of development and construction rights in theterms and conditions contained in the respective administrative act, as well such as certification of compliance with urban regulations and earthquake resistance and other regulations on which it is based and entails the specific authorization on the use and development of the land, whether it is in force or when the work has been executed as long as it has complied with all the obligations established therein.”
   • Article 2.2.6.1.2.1.7 of Decree 1077 of 2015, is clear when determining that it is the responsibility of the Ministry of Housing, City and Territory to determine the requirements for the study and processing of urban license applications, through the issuance of a resolution that so consecrates them, “(…) Without prejudice to the documents that guarantee compliance with the rules of the provisions related to the protection of assets of cultural interest, the territorial ordering plan and the regulations that develop, regulate or complement, in compliance with the provisions in numeral 7 of article 99 of Law 388 of 1997, modified by Article 182 of Decree 019 of 2012, urban planning licenses must be filed and resolved exclusively with the requirements set by the mentioned Resolution”

In light of the foregoing,

BE IT RESOLVED

ARTICLE ONE: INITIATE the procedure of direct revocation of the Resolutions through which urban planning permission was granted to the property identified with real estate registration 001-1374003.

ARTICLE TWO: SEND communication to PRICESMART COLOMBIA SAS, commercial company with NIT 9003197533, who acquired the property by public deed 879 of March 16, 2022, granted by the Notary Public 25 of Medellín, requesting the authorization to revoke the planning licenses granted to the identified property in the first article.

ARTICLE THREE: INFORM the Territorial Management and Control Secretariat of the District of Medellín, the beginning of the process of Direct Revocation of the licenses granted to the property identified with real estate registration 001-1374003.

NOTIFY AND COMPLY

Issued in Medellín on the 3^rd day of February of the year 2023

LUIS FERNANDO BETANCUR MERINO
Second Urban Curate of Medellín
Decre 0381 of 2018
1311-12.4-