From the developers of the Žižkov freight station, Prague will receive 1.53 billion CZK

Prague – The Prague City Hall will receive approximately 1.53 billion CZK in the coming years from so-called contributions, meaning payments from developers planning construction in the area of the Žižkov freight station. The money will be used for the construction of schools and kindergartens, parks, and other infrastructure. Overall, the city could gain up to ten billion from investors in other development areas. This was stated today by Deputy Mayor Petr Hlaváček (TOP 09). The methodology according to which developers will contribute to the city for infrastructure construction was approved by the Prague councilors during their meeting on Thursday.

"In Žižkov, the funds will create five or six kindergartens, an elementary school, land for parks, and a tram line," said Hlaváček.

A new district will emerge in the area. Several development companies are planning projects. The functionalist station will be preserved and is expected to house, among other things, an elementary school or the headquarters of the National Film Archive. The plans are not liked by some local residents who have written a petition against the land use plan change allowing for construction. According to them, the project does not include enough space for schools, parks, and other community facilities, and the population density is expected to be too high. Hlaváček rejected the criticism.

The City Hall and city districts will now be able to use the methodology under which developers will contribute to the construction of infrastructure necessitated by their projects. An Investor Participation Fund for area development will be established. The reason for this is the lack of funds for building new infrastructure that the city has to construct. Investors will pay either 700 CZK or 2300 CZK per square meter of gross floor area if they need a land use plan change.

"This methodology is a unification of city approaches, a standard that indicates how the city collaborates with investors, how the contract is negotiated, there is a contractual basis, and the material states that it is good to reach an agreement. All these funds return to the area where the burden is created," said Hlaváček.

There are currently eight so-called development areas in Prague where extensive construction is set to take place. Among them, besides the freight station, are areas such as Bubny-Zátory in Prague 7 and an area in Letňany. More than 51,000 apartments could be built on the sites, and the city might receive up to ten billion CZK from developers. According to Hlaváček, the exact amount cannot be anticipated at this time.

Some councilors criticized during Thursday's meeting that developer contributions would lead to higher apartment prices. According to Hlaváček, this may happen at the beginning of the methodology's implementation; however, over time, the number of apartments will increase, and a higher supply will lower prices. According to the chairman of the city council's Committee for Urban Development, Petr Zeman (Praha Sobě), the city would not have money to build infrastructure without developers' contributions.

Mayor Zdeněk Hřib (Pirates) stated that the city's costs are additionally raised by the amount required for changing the land use plan. "The costs of processing one change are around one million crowns, and one is dealt with every day, while applicants incur no costs for the change," said Hřib.

In the past, the City Hall and city districts concluded extraordinary contracts with developers in which the developer committed to meet the city's requirements beyond their obligations. The current methodology will unify these procedures; however, the municipalities will be able to adapt it to their needs.