Vítek: They offered me the Sazka building for 100 million

Prague - The Supreme Audit Office (NKÚ) has decided to purchase the Sazka building for 300 million crowns, which is three times more than it was available for two years ago. In an interview with ČTK today, the owner of the investment and development company CPI Group, Radovan Vítek, stated that his company rejected a significantly lower offer because the building is unsellable.
     "When Sazka and its insolvency were being discussed, we talked with the other largest creditors about what would happen to the building where it was located. They offered me to buy it for 100 million crowns. I said then that it was worthless and rejected it," said Vítek to ČTK. Since then, the building has been empty for two years, and the situation on the real estate market has deteriorated further, with prices for old office buildings in Prague rather declining. "I don't think that its price has risen like this in two years," Vítek said.
     The office claims not to know of any other, lower offers. "It is not up to the NKÚ to comment on alleged offers that were supposedly made to Mr. Vítek in the past. However, it is a fact that the Sazka building is being offered to the NKÚ for the price of 300 million crowns, while the expertise from YBN Consult - Expert Institute, a.s. estimated its price including the land at 575 million," responded NKÚ spokesperson Olga Málková.
     Vítek is personally involved in the dispute, as the NKÚ is currently located in Prague's Holešovice in the Tokovo building, which CPI Group purchased in a bundle of properties from the PPF group in 2011. With the departure of the state office, which currently rents 10,000 square meters, the current owner will lose an interesting client. The NKÚ paid 44 million crowns last year, sending even 80 million crowns to the previous owner every year. The problem with the inflated rent has in this way been inherited by the current owner from the previous one. This is also why in February of this year, CPI Group proposed to reduce the annual rent to as low as 19.9 million crowns.
     "Last week we even offered the office 16.696 million crowns, which is nearly below our costs. I still think they will reject it. They wouldn't accept even if we came with a rental offer of one euro," Vítek claims, stating that the decision about the NKÚ's departure from their building had supposedly been made a long time ago. "This has been talked about since the middle of last year. Various parties have an interest in selling the Sazka building," confirmed the owner of CPI Group.
     The NKÚ claims that this proposal was presented late by the building's owner. Apparently, last spring they were negotiating with representatives of CPI Group about a possible extension of the lease, but the building owner did not respond to the request to submit an offer. "The first written offer only arrived on February 13 of this year. The latest was on March 8. In both cases, it explicitly states that they are not legally binding," Málková warned, according to whom it is a lie that the NKÚ did not respond to the last offer. According to her, the office requested further clarifications.
     "It is a question of why CPI Group, if it truly wants to extend the lease with the NKÚ, did not come with one of these offers during the past year. I believe that the only reason for these attacks is the effort to influence the atmosphere before the government meeting, which is to decide on the release of funds for the purchase of a new NKÚ headquarters on Wednesday," said NKÚ Vice President Miloslav Kala to ČTK.
     The NKÚ also labeled Vítek's claim that the decision about the NKÚ's departure from the Tokovo building was made already in the middle of last year as false. According to Kala, the NKÚ conducted a demand survey when searching for a new headquarters, during which they contacted 26 real estate companies, published an advertisement in the press, and also issued an invitation on their website. The opening of envelopes with offers took place on December 3, 2012. "The offer to purchase Sazka was one of them. It is therefore absurd to claim that a decision was made in the middle of last year when invitations to submit offers had not yet been sent out at that time. Another evident lie from Mr. Vítek," emphasized Kala.
     Whether the NKÚ can purchase the building after the bankruptcy of Sazka will be decided by the government on Wednesday. Previously, the control committee of the Chamber of Deputies approved the office's move. This was based on an expertise commissioned by the NKÚ management. CPI Group criticizes it as distorted; NKÚ Vice President Miloslav Kala claims he intentionally divided it by two. He argues that a second, unspecified state office would also move into the Sazka building along with the NKÚ.
     "If he did not do it, it would not add up for him. The costs of acquiring the building, necessary investments, and ten years of operation amount to 710 million crowns even according to the expertise. The difference compared to the current advantageous rental conditions is thus 400 million crowns. And I'm not even talking about the fact that the costs for necessary adjustments before moving in and acquiring new equipment are significantly undervalued," Vítek emphasized.
     ČTK reiterated earlier information that his company is preparing a criminal complaint. However, it will only be filed after the government decides on the purchase of the building, although according to Vítek, the outcome is already clear. "We will file a criminal complaint against both evaluators for a falsified report and against Kala for fraud and mismanagement of state property as well as against all government members," said Vítek to ČTK.
     He claims that he is not so much concerned about money as about principle. "The annual income from rents for all our buildings reaches a quarter of a billion euros (6.4 billion crowns); this is just pocket change. However, because this specifically affects me, I have spoken up. But everyone will lose money from their taxes," added Vítek, noting that everything has already long been decided. "I will try to make this a little unpleasant for them anyway," Vítek explained his motivation.
     The state office has also launched a counterattack and accused the developer of immoral profits. "The NKÚ has paid 450 million crowns for six years of renting the Tokovo building. That is an immoral amount. CPI Group entered negotiations about extending the lease with the feeling that the state guarantees similar profits. This was also reflected in the representatives of CPI Group's approach to negotiations, where, for example, delivering their rental offer took several months despite repeated urgencies from the NKÚ. In a situation where the supply of office space clearly exceeds the demand, the representatives of CPI Group panicked at the thought of losing a reliable and long-term tenant. To prevent this, they do not hesitate to lie and slander. However, I will not yield to such blackmail," added NKÚ Vice President Miloslav Kala.
     The problem of inflated rent, however, arose under the previous owner of the building, the PPF group. The decision to rent the Tokovo building was made by the then president of the NKÚ, František Dohnal, back in 2006. CPI Group acquired the building in 2011 and has since reduced the rent to nearly half since February 2012.