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Prague leaders agreed with the owner of the Skoda Palace, Copa retail, on a discount on the rent amounting to CZK 860 million, as Mayor Adriana Krnáčová (ANO) and Copa retail director Abigail Schaeffer told reports today. The company will provide a discount on the total amount that was originally supposed to reach 4.4 billion over a 20-year lease. At the same time, Prague agreed to give up its purchase option and to extend the lease contract by a year and a half. Prague originally leased the palace, which serves as the seat of most of the city administration, from 2006 to 2026.

“In 2003, the City Hall could acquire the building but several years later, it leased it for 4.4 billion. As the head of Transparency International I challenged the public tender but unsuccessfully. The only possible solution was to negotiate. Nonsensical criminal proceedings initiated by our colleagues from TOP09 and their standpoint made things last longer as they engaged Prague in pointless litigation in 2003 that Prague eventually lost,” said Krnáčová.

According to Councillor Radek Lacko (ANO), the city and the company agreed to put a cap on the inflation clause at 3.5% annually and Prague is abandoning a purchase option. The rent will newly be paid in euros instead of Czech crowns. “The lease is going to be extended by a year and a half,” Lacko said. The lease contract is to expire in June 2028.

“Even though we were in a much stronger legal position, our main priority and preference was to settle the dispute. This agreement is a reasonable compromise for each party,” said Schaeffer.

In the past, the city initiated two litigations because of the amount of rent but failed in court. Councillor Jan Wolf (KDU-ČSL/Trojkoalice) said that the city was also withdrawing all court claims. After Prague lost both litigations against Copa retail, attorneys originally said the city would seek an appellate review before the Supreme Court.

It remains to be seen if Prague relocates its administration elsewhere or extends the Skoda Palace lease. “It is too early to talk about this,” said Krnáčová. In the past, the possibility of erecting a new building in Florenc or at Knížecí in Prague 5 was discussed.

Last year, Krnáčová forwarded her e-mail exchange with Schaeffer to an opposition assembly member by mistake. In the e-mails, the two ladies discussed selection of legal advisors to represent the city. The opposition TOP 09 party filed a criminal complaint against Krnáčová because of this but the Police shelved it recently.

Source: Blesk, ČTK