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Fortina Group Claims €8.1m Price Tag For Change Of Use Is Excessive

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Fortina Group says the €8.1 million premium requested by the Lands Authority to allow it to build shops and apartments on land meant only for hospitality was “far in excess of market value”.

“The Group has long been in negotiations with the authorities to lift a restriction on development, other than for touristic purposes, on part of its site, which concerns a circa 1,250sqm landlocked plot that has been owned by Fortina for 30 years,” the group said in a press statement reacting to a story by Times of Malta.

“Following the Group’s application to lift this restriction over two years ago, the Lands Authority carried out a valuation of effecting this change in line with the law. The Authority requested a premium of €8.1 million.”

The group went on to say that “although Fortina considered this premium to be far in excess of market value, especially considering similar agreements that have been approved by Parliament in the past”, the Group decided to meet this request.

“The premium upon which we agreed works out at circa €6,480 per square metre of buildable area, which is an enormous sum of money especially when one considers that we already have full ownership of the land in question.”

“Furthermore, it is pertinent to point out that 85 per cent of this plot will still be
occupied by a newly refurbished 5-star hotel and associated amenities, so what we are effectively talking about is a very small landlocked area which is being converted to residential and commercial use.”

The group also said that it was a travesty to suggest that the plot should have been offered by tender, when the land has been fully owned by them since the 1990s. “It’s truly a shame that such a major investment on our part is being portrayed in a negative manner.”

According to Times of Malta, the owners of Sliema’s Fortina Hotel will now be able to build shops and apartments potentially worth tens of millions.

This valuation followed reports submitted by government architects. However, instead of paying the agreed sum all at once, as would normally be the case, the government has agreed to take a payment of just €1 million upon the signing of the contract, Times of Malta reported. The rest – more than €7 million – will be paid interest free at the end of a 10-year period from when the deed is signed.

The land in question was acquired the Zammit Tabona family through various agreements dating back to the 1960s. They acquired 4,000 square metres of public land in 2000 for which they paid €1.4 million on condition that it could only be used for tourism-related purposes.

Last year, Edward Zammit Tabona, CEO of Fortina Developments Company, acquired a permit to demolish one of the hotel blocks and instead build a 15-storey office block on its existing land. At the time, there was no approval yet from the Lands Authority for this development.

Christian is an award-winning journalist and entrepreneur who founded Lovin Malta, a new media company dedicated to creating positive impact in society. He is passionate about justice, public finances and finding ways to build a better future.

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