The Bucharest City Hall doesn’t have EUR 115 million to pay to businessman Costică Constanda following a court decision, mayor Gabriela Firea said, G4media.ro reported.
The High Court of Cassation and Justice ruled last week that the Bucharest municipality needs to pay EUR 115 million to Constanda after a land swap contract agreed between the two parties was canceled. Under the contract, the City Hall offered Constanda a plot of land in the capital’s French Village (Satul Francez) residential area, in northern Bucharest, in exchange for the land representing Bordei Park, also in the northern part of the capital. The court also ruled that the Bucharest City Hall will get the land in Satul Francez back. Of the sum that needs to be paid, the cost of the land is of EUR 69 million, and the remainder are interests and other expenses.
The EUR 115 million stand for 20% of the yearly budget of the Bucharest municipality, mayor Firea said. She also ruled out paying the sum in one installment.
“This is a burdening expense. […] There is no way to pay the money in one installment, we don’t even have the money […] Once we are convinced we can receive the 28,500 sqm in Satul Francez with no tasks […], then we will see what the situation of the payments will be; under no circumstance will it be a one, two or three-installment payment,” Firea said.
The lawsuit between the City Hall and the Constanda family has been going on for more than 10 years. In 2003, Bucharest gave the land in Bordei Park to Lincaru and Dumitru families, in exchange for a land in Satul Francez, on which the two had property rights, Firea explained. Costanda purchased the litigious rights from the two families, who also received damages from the state, the mayor said. The businessman requested a permit to build a real estate complex in Bordei Park, but the Bucharest General Council denied the request since the land was meant to be used as a park, the Bucharest City Hall said.
In October 2007, the City Hall signed an agreement with Constanda, through which it received the Bordei Park, in exchange for Satul Francez. The City Hall also committed to granting the businessman “certain urbanistic quotas.” Later, in 2009, Constanda proposed an urban planning (PUZ) for Satul Francez which the City Council rejected twice and failed to discuss a third time for lack of quorum. In January 2010, Constanda went to court, because the City Hall did not issue the requested PUZ and also asked the Bucharest City Hall to pay the value of the land in Bordei Park, which in the meantime had been included in the public domain as a park. The City Hall issued the PUZ requested by Constanda in December 2010.
According to the mayor, a 2002 emergency ordinance explains how a public institution needs to close its debts. In the case of payments paid in installments, the urgent debts need to be paid first. In the case of the Bucharest City Hall, the subventions for the heating supplier RADET and the public transport company, the 19 hospitals in its administration, the salaries and running expenses are a priority, Firea said.
The Bucharest City Hall is “unpronounced bankrupt,” mayor Gabriela Firea said, quoted by Mediafax. Ahead of an executive...