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Wanda To Resume Renovation Of ‘Edificio España’

21 April 2016 – Expansión

The Town Hall of Madrid and Wanda wrote another chapter in their tug-of-war story that began back in July 2014, when the Chinese Group purchased Edificio España from Banco Santander for €265 million, with the aim of converting it into a luxury hotel, shopping centre and homes.

The main sticking point in the negotiations between Manuela Carmena’s town hall team and Dalian Wanda has centred around the Town Hall’s requirement to maintain the façade of the landmark building, an idea that Wanda opposes. The group has threatened to look for alternative solutions and even to abandon the project.

But now, it seems that Wanda has accepted Carmena’s conditions to go ahead with its plans. In the face of the uncertainties generated by the Chinese company’s position, the Town Hall of Madrid sent a letter to Michael Qiao, the CEO of the Asian Group, on 6 April, asking him to confirm the decision regarding their plans for the building within 15 days. The councillor for Sustainable Urban Development, José Manuel Calvo, announced yesterday that the Asian firm has responded to the letter indicating that it still intends to construct a hotel and that, following this confirmation, it expects the project to resume “shortly”. Nevertheless, Calvo was wary of discussing timeframes.

In parallel, the Chinese group still has a mandate with the consultancy firm JLL to sell the property and its efforts to find a potential buyer are on-going, according to sources close to the process.

Other interested parties

As part of this process, the US fund Hines and the Philippine Group Emperador have both expressed their interest in the property. JLL declined to make any comment about the matter. (…).

The councillor for Sustainable Urban Development confirmed that “there is no way” that the property “will be demolished”, although “it is perfectly reasonable for any one element that is in poor condition to be replaced”.

Calvo referred to the leaked letter and highlighted that it contained the urban planning rules and corresponding exceptions, but insisted that “no-one has had to resort to selling out or changing any laws”.

At the beginning of March, the multinational company confirmed to the mayoress that it intends to stay in Madrid and implement its plans for Edificio España, after weeks of speculation regarding the possible abandonment of the project, which were fuelled by the Chinese group’s decision to close its headquarters in Madrid.

At the beginning of the year, Wanda Madrid Development decided to close the office that it had opened in the Spanish capital to undertake the remodelling of the landmark building, which has been empty for years.

The Town Hall has always maintained that Wanda purchased the building knowing that the building was a partial level 3 listed property, due to its historical-artistic value, which prevents it from being knocked down.

The Local Historical Heritage Commission, in which the Community of Madrid and the Town Hall participate, agreed to relax the requirements to promote the sale of the building, which is very run down due to inactivity, provided the façade is respected.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake