"There is a lease between Stará Tržnica a.s. and the city which is valid for 38 years. It is not possible for one side to cancel it."
Alexander Pereszlényi, Stará Tržnica a.s.
A landmark slumbers. While the city of Bratislava and Stará Tržnica a.s. negotiate the completion of reconstruction on the old market, golden real estate sits unused.
Optimism flourished in May 1992 when Bratislava Mayor Peter Kresánek agreed to lease Stará Tržnica to Rudolf Mosny, a Slovak-American entrepreneur whose East-West Capital Corporation had won a competition for the rights to transform the 4,800-square-meter hall into a modern shopping center.
Four years later, Mosny has yet to secure the necessary finances, Kresánek has felt the heat of public scrutiny, and the building continues to crumble. The difference is that now the city has the money to move forward, thanks to backing for a bond issue from the Japanese bank Nomura, and there is hope that work may begin on the building as early as this autumn.
But before any hammers are lifted, the ongoing negotiations between Kresánek and Mosny must answer the question: Who controls the Old Market and to what extent?
The City owns the building. Stará Tržnica a.s., a joint stock company owned 100 percent by Mosny Holdings, now possesses the 38-year lease, which it gained from East-West Capital Corp. Both City Hall and Stará Tržnica a.s. want to renovate the building.
Over the past several years, Mosny had several attempts at securing the money fall through before finally getting a commitment from Tatra Banka. First Western partners backed out, fearing instability, and then a loan from Bank Austria failed to transpire. Now Mosny says Tatra Banka is ready to give a loan if the 38-year lease is respected.
Early this year, Stará Tržnica a.s. approached City Hall with a new proposal comprising three possibilities: 1) the City buys 100 percent of the shares in Stará Tržnica a.s., 2) the City buys 42 percent, Mosny Holdings keeps 42 percent, and Hydrostav, the project's main construction company, buys 16 percent, or 3) Stará Tržnica a.s. progresses without the City as a partner. "Nothing is clear now," said Alexander Pereszlényi, one of Mosny's closest associates. "It all should be decided by the end of September."
City Hall, however, seems to have its mind made up. Kresánek has felt the need to defend himself against public criticism over the delays and Milan Vajda, the mayor's press secretary, said the criticism was justified but misplaced. "If we are going to be criticized, at least let's be responsible," he said. "If we are going to enter a shareholding company on our own property, why can't we do it ourselves?"
The City was emboldened last December when Nomura announced it would back a 1.88 billion Sk bond issue for the City. Now City Hall is less willing to wait for anyone and Vajda said the City Council is prepared to spend 320 million Sk from the bond issue on the Old Market.
But the City cannot progress without the Mosny's consent, Pereszlényi said. "There is a lease between Stará Tržnica a.s. and the city which is valid for 38 years. It is not possible for one side to cancel it." Therein lies an issue to be resolved in the current negotiations.
Whether the market is developed by Mosny, the City, or an amalgamation including the two, it is likely to be based on the design that was created by the architectural firm CD Team and submitted with Mosny's 1992 winning bid.
Beyond that, Mosny's vision may be a bit upscale over the City's. Where he had talked about renting for 10,000 Sk per square meter per year, Vajda estimated around 7,000 Sk per square meter per year. Mosny said tenants would have to show "substantial security" and be "reputable." Vajda, in contrast, said the City would expect more than green grocers, but "no Calvin Klein, no Estee Lauder."
31. Jul 1996 at 0:00 | Rick Zedník