The Prague City Hall will forgive the City Hall of Prague 8 with a debt of CZK 244.84 million, which were to be used for the completion of the Palmovka Center, which did not happen. The reason for forgiveness is the poor financial situation, when the town hall does not have the money to pay the debt. Debt recovery was approved today by the Municipal Finance Committee. Prague 8 originally received a loan of 300 million crowns, of which so far it has managed to return only a part to the city. Debt forgiveness has yet to be approved by Prague councilors.
“I am not happy about the situation as a whole, but no other solution was currently offered. The city district does not have these funds. If it had to return them to us, it would go bankrupt,” said Deputy Mayor Pavel Vyhnánek (Prague Sobě).
Debt forgiveness is part of the overall agreement between Prague 8, the municipality and Metrostav Alfa. The town hall will pay about CZK 142 million to the developer. It will receive a subsidy of CZK 550 million from the city, which will be provided in the coming years. Prague 8, on the other hand, will transfer the unfinished building and land to the municipality. “I think it was the only possible solution that was offered and thanks to it we will avoid a situation bordering on insolvency on the part of the city district, which we have never experienced in Prague,” said Vyhnánek.
According to the deputy, the impending insolvency was the main reason why the city forgave the debt. According to Vyhnánek, this would mean that 100,000 Praguers would lose the services that the town hall provides, such as education or care for the elderly.
The construction of the building, where the town hall was to have a new headquarters and which included commercial premises, was approved by the previous management of the city district in 2010. The costs were then estimated at more than a billion. The previous management of Prague 8 stopped the construction and subsequently tried to own it.
In the future, the Palmovka center should be part of the transformation of the entire locality, where new houses will be built and the current bus station will disappear. The current square of Bohumil Hrabal will also undergo the transformation, greenery, benches and a café will be added. What exactly will be in the building of the Palmovka Center is not yet clear. According to an earlier statement by Deputy Mayor Petr Hlaváček (TOP 09), these should be administrative premises and apartments will be built around the building.
Source: CTK
