Prague will establish a co-investment fund, to which developers will contribute for infrastructure

Prague – The Prague City Hall will establish a Co-investment Fund for the development of the area, to which developers will contribute to the development of infrastructure in agreement with the city. The reason is the lack of funds for building new infrastructure, which the city is responsible for. This follows from a document approved today by Prague councillors. The city leadership also approved a methodology that will be followed. The document still needs to be ratified by the Prague representatives.

"The creation of public infrastructure is essential for the functioning of new districts, but the city does not have sufficient investment resources to finance the necessary public infrastructure in the coming decades,” the document states.

The contract signing will be voluntary. The money that the investor provides to the city will be purpose-bound for equipment or modifications to public infrastructure or for the construction of recreational facilities or housing. According to Deputy Mayor Petr Hlaváček (TOP 09), the city is currently negotiating, for example, with developers in Letňany or the Žižkov Freight Station area. In the case of Žižkov, the city could reportedly gradually obtain up to 1.5 billion crowns for infrastructure in the coming years.

The fund will be responsible for, among other things, keeping records of contracts signed with developers and the amounts provided. It will regularly evaluate and propose adjustments to the cooperation methodology and suggest amendments.

The methodology will set the rules by which the city will cooperate with developers. The goal is collaboration and coordination of actions among all involved parties, namely the city hall, the district, and the developer, as well as setting the degree of co-investment. The methodology will also establish clear rules. "It emphasizes coordination and the resolution of any ambiguities, conflicting or inconsistent positions of the involved parties already in the phase before a change in the zoning plan,” the text of the methodology states. Although the agreement is voluntary, Hlaváček is not concerned that investors would boycott it. "The need and willingness to reach an agreement is growing,” Hlaváček said.

In the past, the city hall and city districts made extraordinary contracts with developers, in which the developer committed to fulfilling the city's requirements beyond their obligations. This occurred, for example, in the project for the planned construction of the Masaryk Centre near Masarykova Train Station, which was signed by the city hall and Prague 1 with the company Prague CBD from the Penta group.