The leadership of Prague approved the agreement for the purchase of land under the "marshmallow."

Prague – Today, the city council approved an agreement with the owners of the company Praga Progetti e Investimenti, which is constructing the residential building U Milosrdných in the Old Town, previously nicknamed the marshmallow, after several attempts. The land under the building is half-owned by the city and according to the plan approved today, it will be sold to the owners for 123.7 million crowns. The city representatives will still vote on the decision. The plan for the sale has long been criticized by the coalition 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 presented a proposal, whose visualizations featured a façade in white and pink. Based on this, the project received the nickname marshmallow and faced a wave of criticism. After taking over the project, the developer V Invest proposed a new version of the building.

Around the land under the construction, there is a complicated legal situation because the city owns half of it and the building owners have a preliminary agreement with the city council. City councilor Jan Chabr told ČTK that while the city can lead a legal dispute over the validity of the agreement, according to analyses, it would likely result in the need to pay compensation for damages and lost profits of the investor. Therefore, according to him, the city leadership chose to negotiate a compromise solution.

According to him, the result is an agreement with a price five times higher than the original preliminary agreement. "The funds obtained can be exchanged for apartments that the investor offers us in other projects of theirs, with a discount on the developer's margin," added the councilor. He believes it is the best possible solution, even though he understands that the planned building may be objectionable to some people. "If this solution does not happen, the investor will complete the project and insist on the original agreement with a price of 27,000 crowns per square meter, which would result in a loss for the city compared to this construct," he stated. According to him, the contract now stipulates a price of 128,000 crowns per square meter.

The long-term plan to sell the land has been criticized by former mayor and now opposition councilor of Prague 1, Pavel Čižinský (Prague 1 Sobě), and at today’s council meeting the Prague Sobě club opposed the proposed solution according to ČTK's information. Čižinský wrote to Mayor Zdeněk Hřib (Pirates) that the final owner of the project is the Olomouc billionaire and owner of Creditas bank, Pavel Hubáček, who, according to media information, has connections with the politician ANO Jaroslav Faltýnek and the Moravian Stoka case being dealt with by the courts. "We only learned that Mr. Hubáček became the final owner a few months ago. I have never negotiated with him, I do not know him, we tried to negotiate the best possible conditions," said Chabr regarding this.

Čižinský further stated that Chabr is mistaken in thinking that the sale of the land is the only solution. "The developer's agreement is likely invalid and the developer cannot be acting in good faith, as they well know they should have been paying rent for the long-term use of the land in question. However, this rent (due to extremely dubious if not outright criminal actions by certain representatives of the city of Prague) has not been paid," he wrote in a letter to the mayor. He added that the sale would prevent the city from addressing earlier illegal use of the land.