Lipscani
Esplanada and Centrul Vechi
By: Gijsbert Huijink
Are there surprises in store for the potential investors in the area?
Posted: 14/05/2006
A few weeks ago I came across this quote in Ziua from Bucharest’s Mayor, Adriean Videanu:
“In proiectul Esplanada avem 25 de puneri in posesie, care totalizeaza aproape un hectar, dar mai sunt si alte cereri pe Legea 10. Vom urgenta procesul de restituire astfel incat, asa cum am promis si investitorului, in jurul datei de 30 iunie sa avem o situatie clara din punct de vedere juridic al terenului”, a declarat, ieri, Adriean Videanu.
Esplanada is a big project and I am certainly in favour of the development of the open, ugly expanse on Bd Unirii. The American-Hungarian investor might be up in for some surprises though. Bucharest’s mayor, Adriean Videanu promises that by the end of June, all legal problems will be solved and the Esplanada land will be owned by the Primaria Municipiul Bucuresti (PMB). So in order to respect his promise, Mr Videanu needs to return all the properties to their rightful owners, negotiate with each of them and sign all these deals over the next three months.
Looking at our experience of the ambitious promises of the PMB, it is a safe bet to say that this will not happen. We have been promised by Mr Videanu personally for over a year that the existing lights in the Centrul Vechi will be repaired. We talked to the lighting company and even showed them which lights did not work. Still half of the 57 streets in the Lipscani area continue to be unlit at night.
So let’s consider all these people whose houses were destroyed under Ceausescu and who have been fighting with the PMB and in the courts for the last 16 years to get their property rights recognised. Now that they have finally received recognition, will they sell to the ‘enemy’? Some will sell if the price is right (and the current market price for that area is greater than 1500 euros per square metre). Others will think that they can cut a better deal later. Some ownership rights are split between four heirs in three different countries who do not understand what’s going on. Making a deal with them will take a lot of time. Then you have the crazy people who seem to enjoy the negotiations but in fact do not want to sell.
Anyone who has been seriously involved in real estate negotiations in Romania since 1989 has come across these types of owners.
Rumor has it that a similar plan will be launched for Centrul Vechi. During one of the meetings with AICI, Mr Videanu said that he intends to create an investment company for Centrul Vechi which will purchase all available buildings and then restore them. If this is correct, it might explain why the PMB does not care about the reduced value in the area caused by the closure as they have every motive in keeping prices down.
The problems in Centrul Vechi are even more complicated than at Esplanada. Not only are there many more owners to deal with. You also find that commercial spaces of many buildings have been sold by the PMB to the ‘renters’. The rightful owners have to start legal proceedings or pay them, to get them out of their own property! Apartments in buildings were sold ten years ago by PMB under law 112 and you also have people living in the buildings with rental contracts. On top of that you have illegal occupants who are basically squatters.
My business partner and I bought the property rights of several buildings in Centrul Vechi from the rightful owners and are currently waiting for the answer from the PMB regarding their return. We therefore follow the actions of PMB towards Esplanada with great interest. If the PMB indeed wants to buy up most buildings in Centrul Vechi, we will have to decide what our negotiation strategy will be. I am already beginning to feel a bit crazy …
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