Budapest city council is locked in a power struggle with the national Hungarian government over the development of a derelict industrial area near the city centre.
The government of Viktor Orban wants to turn the Rakosrendezo district in northeast Budapest into a $12bn “mini-Dubai”.
It signed a preliminary agreement with UAE developer Eagle Hills in March last year (see further reading), and the deal was finalised on 20 January.
Orban is currently on a two-day visit to the UAE.
But the city council wants to make it into a “Park City” with “affordable housing and a lot of green space for many, rather than luxury for a few”, in the words of Mayor Gergely Karacsony.
Tallest towers in the EU
The government’s plan would turn the derelict 100ha site into a quarter with luxury apartments and the tallest towers in the EU. According to the government, it will contribute about 2% to Hungary’s GDP.
Eagle Hills said in a press release that its “Grand Budapest” scheme would “create a new world-class green district from an area that has been abandoned for decades”.
Today, the city council will debate the mayor’s motion to exercise a pre-emptive right to buy the land from Eagle Hills. This right belongs to Budapest Kozmuvek (BKM), the not-for-profit company that handles the city’s non-transport services.
Legal threat
Karacsony told the Bloomberg news agency that Budapest would “defend its rights, land and future” and rejected the government’s argument that the capital could not contest the sale.
The mayor said in a Facebook post on Sunday that BKM’s pre-emption rights were “clear and unequivocal”.
“Should the state violate them, BKM will immediately sue both the Hungarian seller and the UAE buyer,” Karácsony said.
Speaking about today’s debate, he said councillors would have to decide whether they are serving “Budapest’s future or giving in to the government’s machinations”.
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