Tag: Local Heritage Committee

Carmena Grants Partial Demolition Licence For Former MOD Building

9 December 2016 – Expansión

The Town Hall of Madrid has granted a licence for the partial demolition of the Precision Artillery Workshop, on Raimundo Fernández Villaverde, despite opposition from Ganemos.

Cooperativa Maravillas, the property developer behind the residential project that is going to be constructed on a plot of land that used to be owned by the Ministry of Defence, on Calle Raimundo Fernández Villaverde, has received some good news this week. The Town Hall of Madrid has granted the management company Domo a licence to demolish the Precision Artillery Workship, now in disuse, despite opposition from Ganemos, one of the parties that forms part of the municipal government’s coalition.

Following a favourable report from the Community of Madrid’s Local Heritage Committee, the Town Hall has authorised the partial demolition of the building. The remodelling of the property forms an essential part of the management company’s plans, which involve the construction of more than 300 homes on this street, located in the Madrilenian neighbourhood of Chamberí.

In any event, the licence for the complete demolition is pending a decision by the Heritage Committee to determine whether the building’s basement still contains any old air-raid shelters from the Civil War, in which case, they should be preserved. In addition, the cooperative is waiting for the agreement reached between the Town Hall and the management company to be ratified.

Details of the agreement

According to this agreement, the Town Hall of Madrid will receive 5,422 m2 of land for residential use, corresponding to 10% of the obligatory concession.

Similarly, the Town Hall of Madrid will receive 3,360 m2 of green space and 1,000 m2 of space on the ground floor of the building, where it plans to building a primary school. It will also receive 250 m2 of free space.

Manuela Carmena’s urban planning team has reached an agreement with the property developer to assign the property in this way, rather than monetise it, with the aim of “covering the deficiencies of these types of facilities in the district of Chamberí”, explained the Town Hall.

The agreement, which is necessary for the approval of the urban planning project and the subsequent work and construction licence, will be circulated for public information purposes and referred to the Town Hall for its ratification.

Opposition from Ganemos

The decision to demolish this building does not have the blessing of Ganemos. The municipal platform, which forms party of Ahora Madrid, considers that “there is no reason” to grant a licence to allow the demolition of the historical building, given that the management agreement required to be able to construct the new buildings has not been approved. According to the platform, several legal cases are still open with the Prosecutor’s Office and the High Court of Justice of Madrid that may still result in the cancelation of the urban planning project. (…).

Meanwhile, the cooperative pointed out that the buildings belonging to the former Workshop are not classified as being of cultural interest, nor do they have any kind of offical protection. “The General Urban Planning Plan of 1997 and its subsequent review did not foresee the need to classify buildings or land as urban land for residential use.”

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Wanda Plans To Sell Edificio España Before August

26 May 2016 – Cinco Días

The Chinese group Dalian Wanda is pushing ahead with the sale of Edificio España, and at the same time it is continuing its negotiations with the Town Hall of Madrid to refurbish the building. The process to complete the transaction is progressing quickly. In fact, the company owned by the magnate Wang Jianlin expects to close the deal before the summer holidays, according to sources close to the talks.

Over the next two weeks, the Chinese group will receive the first non-binding offers from parties interested in buying the building, where Wanda plans to open a hotel and luxury homes, as well as a shopping arcade. These bids will be analysed and a due diligence process will begin. Wanda expects to have closed the sale before August.

For this process, the Chinese investor has engaged the real estate consultancy JLL to act as intermediary, which is pushing ahead with the transaction. Both Wanda and JLL are conducting the transaction with the utmost confidentiality. (…).

The sources consulted understand that Wanda has lost interest in this Madrid mega-project, as it has been unable to carry out its refurbishment plans, which included demolishing the property to reconstruct it from scratch in a similar form to the original. In the face of the rejection from the Town Hall, the Group has decided to forego the complicated refurbishment.

Nevertheless, Wanda is continuing its negotiations with the municipal technicians to find a solution for tackling its future renovation and whereby obtain the necessary construction permits. Market sources insist that it would be positive for the Chinese Group to have these permits, because they will add value to the property for the potential buyers, as would resolve the problems with the Town Hall of Madrid regarding the renovation.

Companies reported to be evaluating the purchase come from Asia, Europe and USA. In some cases, these companies and funds are looking to form alliances with Spanish partners or with firms that have knowledge of the local market, so as to entrust the refurbishment work to them. The figure being talked about in the sector for the sale amounts to just under €300 million.

Wanda paid Santander €265 million in 2014 for the skyscraper, constructed in the 1950s, which is currently unoccupied. It planned to undertake an ambitious renovation, which included reconstructing the building from scratch, but it met with refusal from the Local Heritage Committee, in which the Town Hall (Ahora Madrid) and regional Government (PP) participate, due to the protection afforded to the façades. However, differences of opinion started to emerge last year. The Asian conglomerate decided to put the building up for sale in February. In recent weeks, however, it has resumed talks with the Town Hall.

Nevertheless, there was a new twist in the tale on Monday. The President of the Asian conglomerate broke his silence to confirm that he is still waiting for official confirmation from the Town Hall that his company will be allowed to demolish the property and rebuild it from scratch. “The Town Hall is holding talks with us again saying that we can demolish it. We are waiting for a written document to confirm this, rather than their verbal promise”, said the Chinese magnate to CCTV, the state television channel in his country.

In this way, he contradicted the team led by Manuela Carmena, which has stressed to date that it will not allow the demolition. Sources close to the project say that they do not know why the Chinese officials in Spain agreed to not demolish the building after months rejecting the municipal proposal and they consider that they have gone to the limit to obtain the upper hand in the negotiations.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Wanda Sounds Out Market Re: Sale Of Edificio España

4 February 2016 – Expansión

The Wanda Group has started to sound out the real estate market regarding its possible sale of Edificio España. A priori, the group’s only requirement is that the transaction price be at least equal to the amount the Chinese company paid Banco Santander when it acquired the property in 2014, in other words, €265 million.

However, unless those terms are relaxed, the operation has little chance of success. According to the first round of preliminary conversations, investors with a potential interest in acquiring the skyscraper would be willing to pay between €180 million and €220 million. That amount could increase to €240 million if the Local Heritage Committee changes its mind and allows the demolition of the building’s façades; however, that is unlikely, at least until there is a change in the Government of the Community of Madrid (which chairs and holds a large majority on the board of that body), but in any case, the figures fall well short of the amount set originally by the holding company led by Wang Jianlin.

Although the sale of Edificio España is now its preferred option, Wanda has not yet ruled out the possibility of pushing ahead with the renovation of the property, which would involve the construction of around 300 luxury homes, a 200-room hotel and a five-storey shopping centre, with a budget of €700 million. The last meeting with the representatives of the capital’s Town Hall was held last Wednesday, and the only message to emerge from it was that the company’s spokespeople did not declare that they are planning to abandon the project, despite weeks of speculation to that effect.

There is also a third hypothetical scenario, assuming that the sale of the building does not go ahead and that Wanda rules out the option of renovating the property without demolishing the façades. This option, which Jianlin’s company is currently evaluating, would involve keeping the property in its portfolio for four years, whilst they wait for a change in Madrid’s government, which may result in urban planning actions that would not require it to conserve the skyscraper’s external structure.

Real estate sources indicate that the only option that the Chinese tycoon is not considering is that of abandoning the operation as he does not want to send the message that he has lost money. They also say that Edificio España is still a very attractive asset, thanks not only to its location, but also to the combination of authorised uses (hotel, residential, commercial). (…).

Although the renovation project has not been ruled out completely, the company has now rescinded the contracts that it had signed with several architectural firms and legal advisors in Madrid. It is keeping its sales office open in the hope that it may help the group achieve its goal of transferring the skyscraper to a new owner.

Meanwhile, Grupo Wanda suffered a further setback yesterday, in addition to the huge losses it has experienced on the stock market since the start of the Chinese crisis last summer: the ratings agency Fitch lowered its credit rating to BBB from BBB+, on the basis of lower sales forecasts for 2016 and 2017.

Original story: Expansión (by Luis M. De Ciria, M. Belver and R. Bécares)

Translation: Carmel Drake

Carmena: Town Hall In Talks With Wanda Over Edificio España

27 January 2016 – El Economista

At a press conference yesterday (Tuesday), the mayoress of Madrid, Manuela Carmena, announced that the Town Hall of Madrid has made “a new proposal” to Wanda regarding its Edificio España project…and she added that she does not expect the Chinese investor group to abandon the project, given that it is continuing to participate in negotiations. (…).

Representatives from the Town Hall of Madrid reportedly met with the Chinese investor group last week and the conversations are on-going. (…).

At no point has the possibility of demolishing the façade and rebuilding it brick by brick been entertained, given that it is something that is actually technically unfeasible. The solution involves aligning legal compliance and maintaining the protected features, with the transformation of building that Wanda wants to undertake. (…).

Lots of options

In light of the widespread media attention, Carmena said that “our conversations with the group are on-going” and she added that the Town Hall “is very interested in the fact that this group may construct a hotel in Plaza de España”. (…).

The delegation pointed out that the protected features are not determined by the Town Hall, but rather by the Local Heritage Committee, in which the Town Hall participates and which is chaired by the Community of Madrid, which holds the majority. At the time, thhat body ruled that “it was feasible to undertake the building work, whilst maintaining the protected features”, in other words, it ruled that the proposal to demolish the façade was not an option. (…).

José Manuel Calvo, from the Department for Sustainable Urban Planning, insisted that the project was progressing “as normal”, given that talks are on-going with the company, just as they are with other companies. This normality manifests itself by the fact that the Town Hall has already prepared the compulsory detailed study and that it will process the initial approval as soon as the investor group gives them the go ahead. The Town Hall “will be delighted” to proceed. Following that approval, construction work may begin within two or three months.

The representative of the Department for Sustainable Urban Planning added that if the construction work begins, the Town Hall reserves the right to “secure guarantees” from Wanda to ensure the progress of the work. (…).

Meanwhile, Manuela Carmena answered that “of course she was unable” to guarantee that the renovation of Edificio España would be completed before the end of her term in office because she doesn’t even know how long the construction work will take. (…).

When asked about whether the Town Hall would be more flexible in the face of the hypothetical exit of the investor, Carmena answered that the Town Hall “is not afraid”, but does have a “responsibility” to ensure that Madrid is a more “beautiful and prosperous” city. (…).

Original story: El Economista

Translation: Carmel Drake