PRAGUE

Prague did not agree on the lease of the Škoda Palace, it will file a lawsuit against the owner

The Prague municipality did not agree with the owner of the Škoda Palace, Copa Retail, on the amount of rent for the building in which the municipality is located. He insists on filing a lawsuit. Although Copa Retail offered the city a 35 percent reduction in the new lease, it made it conditional on extending the lease for another fifteen years.

The current lease from 2006 is for twenty years. Annually, the city pays approximately 200 million crowns for rent, i.e. almost one thousand crowns per square meter. “We will file a lawsuit against the landlord. It is not possible for the municipality to pay more than double the market price in this location today. The amount we pay for the Škoda Palace is at least immoral,” said Deputy Mayor Pavel Richter.

He added that according to the assessment available to him, an adequate rent would be 53 percent of the current price. With the lawsuit, the city only wants to challenge the amount of the rent, not the entire contract. The municipality would like to keep the space in the Škoda Palace. “The residents have gotten used to it and the place is not bad,” Richter said.

The current contract, which Richter says is extremely unfavorable to the city, because of the inflation clause, which would make the lower rent equal to the current level in a few years anyway.

The details, mostly of the cases connected with Bém, surfaced only after he left the municipality in the fall of 2010 and started working as an ordinary member of parliament. Four years earlier, after his first term as head of the municipality, Bém’s political star was rising. In the municipal elections in October 2006, the ODS led by him won overwhelmingly in the capital and took control of the municipality alone. Until then, the coalition Social Democrats still occupied a number of positions, for example, in city companies.Author: E15

Prague moved the majority of municipal officials to the Škoda Palace years ago. The municipality originally estimated that they would save tens of millions of crowns annually by moving them out and renting the vacated buildings. “Under Pavel Bém, the town hall made a masterpiece. First, in 2002, he refused to buy the Škoda Palace for approximately 1.5 billion crowns as part of the state’s right of pre-emption to historical buildings, only to rent the same building a few years later for 20 years for four billion crowns,” said Richter.

On the building in Jungmannova street, which the municipality rented from the company Copa Retail of entrepreneur Sebastian Pawlowski, the city has the right of first refusal. Richter said that they had not yet discussed the purchase with a representative of Copa Retail. “It hasn’t been talked about yet,” he said.

According to Sebastian Pawlowski, the rent paid by the capital for rent is rather at the lower end of the market rent value. For example, according to him, common rental commercial space on the ground floor in the Copa Centrum Národní building, which Copa Retail is building next to the Škoda Palace, ranges from 80 euros per square meter to 150 euros per square meter. “The capital city of Prague pays approximately twenty euros per square meter for the ground floor in the Škoda Palace building. All areas were also made turnkey for the capital in 2006 and during the interior modifications, taking into account all the special wishes of the city,” Pawlowski told the E15.cz server earlier.

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