Prague will sell the land under the former "marshmallow" for 123.7 million CZK

Prague - The Prague City Hall will sell land in the Old Town near the St. Agnes Convent to a private investor for 123.7 million crowns including VAT, where the residential project U Milosrdných is being developed. This was approved today by city councilors. The project is owned by CREDITAS Real Estate through the company Praga Progetti e Investimenti. The city owns half of the plots under the building, and in 1999 the city signed a preliminary contract for their sale. The sale was criticized by the opposition party Prague Sobě.

The residential building on U Milosrdných Street has been planned for more than 20 years. The original Italian investor Francesco Augusto Razetto previously proposed a design, the visualization of which featured a facade in white and pink. Because of this, the project earned the nickname "marshmallow" after the similarly colored marshmallow candies, and faced a wave of criticism. After the project was taken over, a new design was proposed by architect Zdeněk Fránek and the development company V Invest, now CREDITAS Real Estate. The building is now nearing completion.

According to the original preliminary contract from 1999, the city was to sell the land to the developer for a price of 27,750 crowns per square meter after the project's approval. In the previous electoral period, the investor approached the city with a request for an earlier purchase, which led to negotiations about the price. According to the city councilor for property Adam Zábranský (Pirates), the resulting price is a market price based on an expert report. The city will also have the option to acquire apartments from the offer that the investor will present instead of the cash payment.

The plan to sell the land has been long criticized by former mayor and now opposition councilor of Prague 1 Pavel Čižinský (Prague 1 Sobě). He stated in today’s meeting that the original contractual documents from which the agreement is derived are, in his opinion, invalid. Even if the contract were valid, he claims that the landowner should have been paying rent, which he did not. He added that the city should strive for better terms, such as demanding a portion of the apartments in the new building in addition to the money. His brother and head of the Prague Sobě councilor club Jan Čižinský also criticized the plan.

According to Zábranský, the situation is historically determined, the building is already standing, the city is bound by valid contracts, and it must somehow resolve the situation. "If we were now in a position where we have a vacant plot suitable for residential construction, I would obviously not propose its sale," he stated, adding that it does not seem appropriate to him to initiate lengthy legal battles on behalf of the city for many more years. He believes that the apartments in the project, given their premium nature, are not suitable for the city's residential fund, and the contract includes penalties in case they are used in the future for short-term rentals like Airbnb, which Prague 1 opposes.