Budapest intends to exercise pre-emption rights, moves to block controversial mini-Dubai development

The Budapest city assembly on Wednesday passed a resolution expressing the metropolitan council’s intention to exercise its pre-emption rights over the city’s Rákosrendező development area.
The proposal submitted by Gergely Karácsony, the mayor of Budapest, was approved with 23 votes in favour and 10 votes against cast by the city councillors of the ruling Fidesz-Christian Democrats. Under the resolution, the city assembly calls on the head of Budapest utility company BKM to exercise its pre-emption rights in connection with the agreement concluded on 16 January 2025, between the Hungarian state and Eagle Hills Hungary over the sale of the Rákosrendező development area in Budapest’s 14th district.
The city councillors have appointed Karácsony to develop in cooperation with BKM “an urban development and business concept for the utilisation of the properties covered in the purchase agreement that complies with the relevant regulations and resolutions of the metropolitan assembly”. The proposal noted that the state sold the Rákosrendező development area to Eagle Hills for a net 51 billion forints without calling a tender, with the purchase price due to be paid by 2039. It, however, notes that once the buyer pays 25 percent of the whole purchase price it obtains ownership rights over properties on the plot. In the purchase agreement, the Hungarian state informed the buyer that BKM has pre-emption rights when it came to the purchase of a property.
Meanwhile, at the initiative of Dávid Vitézy, the leader of the Podmaniczky Movement group in the city assembly, the councillors declared in a document that they rejected and condemned that the purchase agreement signed by the government had ignored the city assembly’s earlier resolution on the area’s development concept. The purchase agreement sets as a condition the creation of a green area no larger in size than 10 percent of the entire plot, the construction of a parking lot for a large number of cars and the construction of an up to 500-metre high office building.
The metropolitan assembly also established that the investment project planned by the Hungarian government and the UAE-based investor in its current form ran counter to the preservation of Budapest’s built heritage and the maintenance of its world heritage status and in all to the interests of Budapest residents.
Addressing the debate, Karácsony called it “a historic challenge to ensure quality living in the capital in the coming decades” which, he said, required quality housing areas and green areas. “Budapest does not need to be remembered in history as a city that allowed the construction of central Europe’s tallest building, as one that attracted another 3 million tourists to visit it for the purpose of spending time here as if in Dubai…” the mayor said, adding that “the government’s sweetheart project” did not have “a single element not running counter to the interests of Budapest and the country as a whole”.
“The contract that the Hungarian state concluded with the Arab investors is about nothing more than how to sell Hungary’s most valuable land without a competitive bidding process,” Karácsony said. He said the city of Budapest had drafted its concept dubbed “Park City” in 2019. “The Rákosrendező development project is about teaching the city and the country how to make use of plots that used to be owned once by the state rail company,” he said. “It is not an exaggeration to say that the future of Budapest depends on it.”
Fidesz group leader Alexandra Szentkirályi said Karácsony wanted to develop the area in question “without even having completed the handkerchief-sized area that would be City Hall Park in five years”. She said Karácsony had not done anything with the Rákosrendező area either in his first term as Budapest mayor or before that as the mayor of the 14th district, but was trying to block the development of the area now that there was an investor to do it. Szentkirályi said it would be preferable if the Rákosrendező area was redeveloped by an investor instead of from public funds, arguing that the construction work would create thousands of jobs and opportunities for Hungarian SMEs.
Dávid Vitézy said the clean-up of the area “would have been the state’s job”, adding that it was up to “Budapest residents and not Arab investors or [Construction Minister] Janos Lazar” to decide how the city should be developed. He said the question was whether the city should be developed in public ownership and in line with the interests of the public and whether the city’s sovereignty and the interests of its residents could be enforced.
Balázs Balogh of the opposition Tisza Party said “the Arab ruler has been given a blank check” while the opinion of Budapest residents and the city assembly was being ignored, adding that no one other than [ruling] Fidesz supported the project.
Read also: