No more mini Dubai: Budapest secures Rákosrendező plot, paving way for green urban development
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A decision in favour of the capital city has been made in the Rákosrendező (Grand Budapest) plot case: Budapest can use its right of first refusal to acquire the property, which was previously to have been purchased by the Eagle Hills Group of the United Arab Emirates.
The 85 hectares of land, which cost HUF 50.9 billion (EUR 126 million), is not just an empty piece of land: the recultivation and other preparatory works required for its development will consume significant additional funds. The original investor would have earmarked HUF 25 billion (EUR 61.9 million) for this purpose, which will now be the responsibility of Budapest.
The first instalment is HUF 12.7 billion (EUR 31.4 million), to be paid within ten days, fortunately, the money is already there, as the capital is financing the initial payment from the sale of the incinerator. This development could not only rewrite the real estate development plans but also put a heavy financial and legal burden on the capital. The decision will allow Budapest to replace the buyer and implement a completely new urban development concept.
Funding and the plans with the land
According to Világgazdaság, the remaining 75% of the purchase price is to be paid in instalments: a 35% instalment is due once all legal obstacles have been removed, while the remaining 40% is due by 2039. The cost of the infrastructure improvements undertaken by the state, amounting to HUF 303 billion (EUR 750 million), is also a significant factor. One potential source of funding for the capital could come from a lawsuit: Budapest is claiming back more than HUF 30 billion (EUR 74.3 million) from the state for the deduction of the solidarity tax. If it receives this, it could be a significant help in financing the investment.
Instead of developing the area itself, the capital is launching an international tender to develop it. Instead of the previously planned “Mini-Dubai,” a “Park City” concept is envisaged, with an emphasis on green spaces and housing solutions. It is envisaged that 8-10 thousand dwellings could be built, providing homes for 20-25 thousand people. These would not be luxury apartments, but affordable homes for the middle class.
The original investment plans supported by the government included skyscrapers that could have reached heights of up to 500 metres. This was rejected by Budapest’s authorities, who introduced rules to prevent the construction of skyscrapers that would spoil the cityscape. The capital’s vision is that only high-rise buildings that pass a visual impact assessment and do not disturb the harmony of Budapest’s iconic buildings can be built.
I am super glad the “mini-Dubai” project has been canned. That would’ve been an utter disaster, for too many reasons to count.
However, the way City Hall is handling it is also a disaster. These are eye-watering amounts of money being spent here, at a time when large parts of Budapest look like a dump.
But hey, leave it to a bunch of Commies to spend money they don’t have. What else is new!