Brno wants to terminate two lease agreements for buildings in the city center

Brno - Brno wants to terminate the lease agreements for two properties in the city center, namely the Klein Palace in Freedom Square and the Hlídka 2 facility in Špilberk Park. The reason is the disadvantageous contracts for the city, said Mayor Petr Vokřál (ANO) to reporters today. According to him, the city is losing millions. If an agreement on a peaceful termination cannot be reached with the tenants, the contracts will be terminated. According to Vokřál, the city would likely not oppose legal disputes either.

The council approved the commencement of negotiations today. The Klein Palace in Freedom Square, which currently houses offices and shops, was rented in 1994 for 90 years by Credit Lyonnais Bank Prague. The tenant does not have to pay rent for 40 years because they committed to renovate the building. According to Vokřál, the annual rent is approximately 14 to 15 million crowns, so the investment in the building should amount to almost 600 million crowns. However, the city is not convinced of this, and according to Vokřál, it will negotiate with the tenant about the amount of investments. "Since 1994, no city representatives have requested documentation on how much investment has actually been made in this building. There are reasonable doubts about whether the investment reached the promised half a billion," Vokřál added.

According to him, however, it is not yet possible to speculate on how much was spent on renovations. "It is therefore a question of whether the tenant is truly entitled to use the building without paying rent until 2034. If we are to manage property with the care of a good manager, these issues need to be addressed," Vokřál added. He indicated that the city could have lost tens of millions of crowns.

The Hlídka 2 facility, which serves, for example, for weddings, meetings, or corporate events, was rented by the city in 2000 to UNISPO. The contract runs until 2038, whereby the tenant pays 50,000 crowns annually and invested five million crowns in repairs. However, according to Vokřál, the rent is not adequate and the city will address this. He did not specify the amount of rent that the city wants. He wants to start negotiations with both tenants, and if an agreement on a peaceful termination of the lease cannot be reached, the city will consider termination. According to Vokřál, Brno would like to re-lease the property to a new or returning tenant, but under more favorable conditions.