It’s business as usual in Budapest District 5 warns Juhász

October 28, 2015

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It’s business as usual in Budapest District 5, whose local government is getting ready to sell yet another ground floor property at a substantial discount to a tenant of just six months.

Opposition party Együtt (Together) held a protest in front of the building at 21 Alkotmány street to call attention to the pending sale by the District government of an 840 square meter, downtown real estate for what it claims is substantially below market value.

Together founder and deputy chairman Péter Juhász claims the current tenant of six months will pay HUF 150 million (HUF 178,000 per sqm)—HUF 65 million less than an official appraisal of the real estate earlier this year.  The district assemblyman emphasized that flats typically sell for between HUF 800,000 and HUF 1.1 million per square meter in that location.

Ground-floor shops in that location rent for around HUF 4,000 (USD 14.8) per square meter per month.

Juhász also called attention to the fact that the current tenant was awarded the right to rent the premises without tender, having declared its intention to create a “meditation and recreational center” that was “obviously of public interest to those living in the downtown”.

Juhász further pointed out that the tenant indicated from the outset its desire to acquire the property.

(The obvious question being why the government didn’t sell the property for full market value then instead of renting it out-ed.)

Claiming opposition assemblymen did not vote in favor of selling the property, Juhász announced his intention to report district mayor Péter Szentgyörgyvölgyi to the authorities if he signs the sales contract.

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Pro-government Magyar Hirek (Hungarian Times) reports the following:

“The District 5 local government says Péter Juhász is deliberately distorting the facts about the sale of a downtown real estate. . . .

In a statement given to MTI, the local government stated that Péter Juhász had the opportunity to state his opinion at the district general assembly meeting, but that he did not participate, as he does not participate in common work in many cases.

They emphasize that the Alkotmány street property is one that is in a state of deterioration that has stood empty for many years, whose renovation would cost HUF 100 million.  Since the property in question is not a flat, but a workshop it would be necessary to invest many times this amount in order to utilize it.

The 5th district is also aware that the sale of the property does not result in merely a one time income, but rather generates many millions of forints over time in the form of local tax on company turnover or real estate.

It mentioned that Collina Dm Kft. indicated its desire to rent the property in the Autumn of 2014  The real estate was rented for a recreational activity.  After signing the contract, they routinely paid the rent.

The maintenance of the real estate has cost the local district government HUF 1o million over the past 5 years.”

(All of which again begs the following question: If the district government knew all of this, then why didn’t it opt to sell the property at full market value six months ago instead of renting it out?-ed.)