Ostrava approved a contract with the developer who will stop Karolina

Ostrava - The City Council of Ostrava today approved the purchase agreement with Multi Development, which won the development competition for the construction of the site of the former Karolina coking plant in the center of Ostrava. Both parties are expected to sign the agreement on Thursday, said Mayor Aleš Zedník (ČSSD) to reporters today. The contract includes not only the price for the land that the city will sell to the company, but also penalties that the company may face for failing to meet its obligations.
    By selling the land, the city will acquire at least approximately 190 million crowns, although this amount could be about another 40 million crowns higher. Originally, the city demanded approximately 1310 crowns per m² for the land, but the current price per square meter is estimated to be about 300 crowns higher, according to assessors.
    "When the estimate was made on our side, the land was estimated only for the dirty part of Karolina. In the new concept, however, we are selling land around the river, which is the most lucrative, which has raised the estimated price," Zedník explained.
    The city has therefore sought assistance from the European Commission, which is expected to decide whether the sale at the price of 1310 crowns per square meter will not constitute state aid. If the commission recognizes such a sale as state aid, according to the agreement, Multi Development must pay an additional approximately 40 million crowns so that the total price for the sale of the land corresponds to the valuation report. According to Zedník, the European Commission's decision could take three months to one year. Zedník reminded that in the past, the city purchased land for approximately 100 million crowns from the company OKD.
    Luboš Kočí, managing director of Multi Development, told ČTK today that any potential increase in the purchase price does not pose a major problem for the company. Kočí believes it is rather unfortunate that the original estimated price of the city wasn't a bit higher, as it wouldn't have differed so much from the appraiser's price. "It's a pity that it got so complicated time-wise. But when the forest is cut down, chips fly," Kočí commented on the situation.
    According to Zedník, the contract is detailed enough that there is no risk of turning Karolina into a market instead of the planned new city center. According to Zedník, if the company fails to meet its obligations, it risks having the land returned to the city, including any buildings that the company might have constructed on it. "There are really so many safeguards in place that a Vietnamese market cannot grow there," Zedník noted. He added that Multi Development has, on the other hand, insisted on certain freedom for architects so that the construction doesn't have to be a 100 percent detailed copy of the competition model.
    According to Kočí, the company is now primarily waiting for the design of the first phase of construction at Karolina. "It is also necessary to process the zoning decision. There will be one zoning decision for the entire first phase. We anticipate that sometime within six months the decision could be made or at least discussed. Only then can we apply for a building permit," Kočí explained. He added that the company must gradually start looking for future users of the constructed buildings. The company expects that construction will begin no earlier than the end of 2007. The winner of the tender plans to invest approximately 12 to 15 billion crowns in Karolina over ten years, making the location one of the most significant current development projects in the Czech Republic.
    Karolina is more than seven times larger than Wenceslas Square. Multi Development has invested in 18 countries around the world so far. In the Czech Republic, it has completed projects such as the Olympia shopping and entertainment centers in Plzeň and Olomouc and the Chodov Center in Prague. The company specializes in the construction of urban, commercial, and administrative centers across Europe.

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> The developer will fill half of Karolina with buildings [14.9.2006]
> The competition for the development of Karolina was won by Multi Development [28.6.2006]
> Multi Development wants to develop Karolina by 2016 [28.6.2006]
> The people of Ostrava selected their favorites for Karolina in a poll [26.6.2006]
> Models of the development of Karolina are displayed at the Ostrava City Hall [2.5.2006]
> Five applicants entered the competition for the development of Karolina [30.4.2006]
> The chief architect of Ostrava is being pursued by the police [19.4.2006]
> The chief architect of Ostrava has not yet been excluded from the chamber [13.4.2006]
> A protest against the development competition for Karolina began in Ostrava [9.1.2006]
> Architects suspect the Ostrava leadership of corruption due to Karolina [30.11.2005]
> The city of Ostrava is considering holding a competition for the revitalization of Karolina [24.10.2005]
> Architect: Decision-making about the area of Karolina is dictated by the investor [21.9.2005]