Court: Plzeň does not have to pay developer Amádeus compensation for damages

Plzeň - Plzeň does not have to pay the company Amádeus more than 1.85 billion crowns as compensation for damages for an unrealized project. The developer unsuccessfully tried to build a giant shopping center in the center of Plzeň from 2008 to 2014. This was decided today by the Plzeň city court. Judge Lukáš Ludvík will be reading a lengthy justification until at least 15:00.

Three years ago, the people of Plzeň rejected the multifunctional complex Corso Americká at a cost of 2.5 billion crowns in a referendum. The results of the referendum obligated the city to take all steps against the construction.

The developer filed a lawsuit against the city last January. He demanded 1.853 billion crowns as compensation for damages due to the failed project and lost profits. The city government has consistently claimed that it did nothing to harm the company. The court started in September last year, and documentary evidence was presented at five hearings; the court heard witnesses and experts from the field.

Plzeň hoped to win the dispute and not have to pay anything. The mayor of Plzeň, Martin Zrzavecký (ČSSD), has long maintained that the city committed no acts that would have harmed the developer. The city leadership and the city lawyers have not met with the investor's representatives for almost a year.

Amádeus Plzeň, which announced last January that it was ending the project due to the city's long-standing negative stance, stated at the end of last December that it wants to build the multifunctional complex again. The mayor confirmed that the company had requested the building authority to issue a zoning decision and this process is ongoing. However, according to the city leadership, the new project is essentially identical to the original.

"This has shown that the representatives, both past and present, always made the right decisions," said the mayor after the verdict. The dispute has already cost the city around 2.5 million crowns for legal services. Plzeň would like to see the land where the demolished culture house stood developed according to the spirit of the referendum and regulatory conditions. "We have a clear opinion on this in the form of two studies. The area is among the most valuable in Plzeň," he stated. The mayor would prefer to see a vibrant boulevard with leisure activities, apartments, and shops there.

The city does not want to buy the land from Amádeus. It sees it as a chance for a private investor. Several investors have expressed interest at the city hall. "But unfortunately, since autumn, negotiations with potential investors have been halted," the mayor stated. "We are ready to negotiate with anyone. Even with Amádeus, provided they adjust the project as our studies and the citizens wanted. This will also be reflected in the new zoning plan," he added.

"Amádeus will wait for the analysis of the first-instance court ruling and for the recommendations of its lawyers," said Amádeus Real media representative Karel Samec. According to him, the company has always wanted to continue preparing the construction of the multifunctional facility and to fill the long-utilized space. Amádeus expects that the city will not obstruct the investor in the construction of the center on its own land. "We believe that this will be confirmed in the new zoning proceeding (the first request was made in August 2012). We therefore expect to receive the necessary approvals from the city regarding the implementation of our intention in the coming days," he stated. The opposite, according to Samec, would mean confirmation that the city has decided to thwart any economically viable use of the land by Amádeus. "We will respond to the zoning decision in the spirit of the referendum results," said the mayor today.

The developer's legal representative Vladímír Uhde stated in court that the city narrowed the issue of the dispute only to the failure to meet the regulatory conditions that it approved after the referendum. "All of the city's remarks were addressed by the plaintiff," he stated. However, according to the city’s legal representative Daniel Hájek, this is not true. The nearly finished project was presented to the city at the beginning of 2012, about a year before the referendum, and this was done without discussion with city authorities and the public. He also provided evidence that the investor had not met some regulatory conditions.

"Compliance with the regulatory conditions would only become evident after the completion of the building, as changes can occur even during its construction," said Uhde. According to him, the project stopped appealing to the city after the results of the referendum. Plzeň allegedly then refused to cooperate with the investor. "No matter what the investor did, the city would have denied the project anyway," he added, stating that the city essentially prohibited the private investor from building on his land. Amádeus insisted that even the outcome of the referendum cannot absolve the city of its responsibility stemming from the lease agreement of the peripheral land. The city terminated the contract on June 30, 2013, due to non-compliance with regulatory conditions.

"The city has always defended the public interest, the protection of public space, and cares about the urban appearance of the city," said Hájek. The regulatory conditions were recognized by experts from the field of architecture, including an expert approached by Amádeus, as reasonable. "It can be demonstrated that the defendant did not act contrary to good morals and that he accommodated the plaintiff," stated Hájek. According to him, the regulatory conditions were a welcome gesture towards the investor. Amádeus, according to Hájek, as a professional firm underestimated many things, especially the urban planning requirements for the project and communication with the public. The lawsuit is merely a cover for their mistakes, he added.

The judge today reminded that Amádeus is also engaged in a similar multi-year dispute with the city of Ostrava, from which it is demanding over 1.5 billion crowns.