ECE halted the project for the commercial gallery in Liberec

Liberec - The company ECE Projektmanagement has halted the construction of the shopping center Galerie Liberec. It has already informed the tenants of its decision. According to the original plans, the department store was supposed to welcome its first customers by the end of this year or at the beginning of next year. However, the opening date has been postponed several times due to illegal delays in administrative proceedings, and the company is unable to promise the realization of the project, even though it has recently obtained a building permit. ECE's executive, Josef Tobek, said this today.
    The construction of Galerie Liberec has been accompanied since the beginning by competitive disputes with the Dutch company Multi Development, which is literally building a shopping center called Forum across the street. The company appealed against the original zoning decision, and the Czech authorities blocked the entire construction of ECE.
    According to Tobek, the main reason for halting the construction was the behavior of the building authority, which interrupted the construction proceedings without legal reasons; the other issue was the illegal actions of the Ministry of Regional Development. The center was already 60 percent leased. "However, it was not possible to prolong the contracts indefinitely; it would harm our good reputation and our relationships with the tenants," Tobek explained.
    According to the server Euro.cz, ECE is negotiating with the Ministry of Finance about a financial settlement; if they do not reach an agreement, the company is prepared to demand compensation through arbitration. "The current costs for construction and financial losses have been estimated at around 55 million euros (over 1.5 billion CZK)," noted the executive. According to him, the company is no longer interested in continuing the project in Liberec, but it is not offering the land for sale yet. "It will depend on the Ministry of Finance; perhaps the state will be interested in the land," Tobek explained.
    The Ministry of Finance confirmed today that it has initiated negotiations within the standard six-month pre-arbitration period. "We are currently studying and analyzing the entire situation. At this time, we do not believe that the investor has suffered damages that could be claimed against the Czech Republic based on the investment protection and support agreement," stated the office spokesman Ondřej Jakob.
    Galerie Liberec was to be constructed in the Perštýn locality near the city transport terminal. The project, estimated at about 100 million euros (approximately 2.85 billion CZK), also included solutions for traffic in this part of the city. A roundabout near the center, which is already at the limit of its capacity today, was to be replaced by a traffic-light-controlled intersection. The five-story building was to be embedded in the hillside with plans for a park on its roof. It was supposed to offer 35,000 square meters of commercial space and parking for 850 cars. However, today there is just a huge construction pit at the site.
    The ECE Group manages a hundred shopping centers in 14 countries. In the Czech Republic, it has so far invested more than 200 million euros (almost five billion CZK). In Brno, it built the shopping center Galerie Vaňkovka, and this year it opened the Arkády Pankrác shopping center in Prague. According to Tobek, the halt of the project in Liberec is certainly not related to the economic crisis. "We do not have problems financing our projects, as evidenced by our activities in Hradec Králové," he said. In Hradec, ECE plans to build another shopping center by 2012.