Another unexpected turn in the Grand Budapest project: here’s the National Asset Management’s reaction – UPDATED

Real estate around the Rákosrendező train station in Budapest may only be sold to a buyer designated by the the United Arab Emirates, with the prior consent of the government, according to an intergovernmental economic cooperation agreement promulgated in 2024, the Hungarian National Asset Management Company (MNV) said on Wednesday. Will the leaderhip of the capital not be able to halt the Grand Budapest project and create Park City instead?

Grand Budapest project: Budapest will not be able to exercise pre-emption right

Any pre-emption right may only be exercised if the party that holds such a right fulfills all of the conditions in a purchase agreement signed on January 16 by MNV, on behalf of the state of Hungary, and the buyer, UAE developer Eagle Hills Hungary, MNV said.

On Tuesday, Budapest Mayor Gergely Karácsony said the city’s utilities company would exercise its pre-emption right for the derelict area which is set to undergo a major rehabilitation.

In a message posted on social media on Wednesday, National Economy Minister Márton Nagy said the capital could not exercise its pre-emption right because of the UAE’s right to designate the buyer and called out the mayor for “political agitation”. He added that the mayor might see the benefits of the rehabilitation project in terms of job creation, the boon for the construction sector and the power to draw tourists, if he would look beyond “the goals of party politics and his own political survival”.

UPDATE: Budapest insists on preemption rights over Rákosrendező brownfield area, says Karácsony

The Budapest municipality will not waive its pre-emption rights over the brownfield area at Rákosrendező, the site of major reconstructions planned, Mayor Gergely Karácsony told a press conference on Wednesday, adding that statements by the government and ruling parties were contradicting each other.

The Hungarian National Asset Management Company (MNV) said earlier in the day that real estate around the Rákosrendező train station in Budapest may only be sold to a buyer designated by the the United Arab Emirates, with the prior consent of the government, according to an intergovernmental economic cooperation agreement promulgated in 2024.

Karácsony said the agreement published by MNV clearly showed that City Hall had pre-emption rights over the area. The municipality will exercise that right to “prevent a harmful investment the government is trying to force onto Budapest residents,” Karácsony said, adding that the municipality will build “Park City”, an earlier plan, in the area.

Budapest mayor misleading people concerning solidarity tax ruling, says government commissioner

Budapest Mayor Gergely Karácsony is “completely misleading people” through his remarks about a recent ruling concerning the city’s obligation to pay a solidarity tax to the central budget, Botond Sára, the city’s government commissioner, said in a video broadcast on Facebook on Wednesday.

“The ruling is just the opposite of what the mayor said,” Sára said, insisting that the court had not contested the lawfulness or the magnitude of the tax, nor did it rule that the state should reimburse the tax collected from metropolitan accounts.

On Tuesday, a Budapest court issued a binding ruling in favour of the city’s administration in its lawsuit against the state treasury over the solidarity tax, declaring the previous tax collection orders unlawful.

The Budapest metropolitan council filed its lawsuit in 2023 arguing that the 28 billion forints (EUR 67.9m) in solidarity tax it had paid to the state treasury was unlawful because it exceeded the funding it received from the government.

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