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The so-called envelope method used by the City of Brno to sell its property, which guarantees the transparent sale of a property to the highest bidder, will be transferred to a virtual environment from April. The city hopes to raise CZK 850 million from the sales, to fill the gap in its finances caused by the pandemic. Photo Credit: NS / BD.

Brno, Apr 27 (BD) – The extended duration of the pandemic has placed a great strain on public finances, including in Brno. Resorting to austerity measures, Brno City Council intends to cover the shortfall in the budget by selling assets designated as “redundant assets”, such as buildings in severe disrepair, to bring CZK 850 million into the city budget. 

Róbert Čuma (Piráti), Brno city council member for property, quoted in Seznam Zprávy, defined a redundant asset as “a property for which the city has no use, typically long-term dilapidated, and with no prospect that its repair would be profitable.” However, some of the buildings earmarked for sale are still inhabited by tenants, for whom the city districts will have to find new housing.

David Oplatek (Green), a district councillor in Brno-Stred, questioned the logic of the sale: “It seems that these are mostly apartment buildings. At a time when Brno, like many other cities, is suffering from a housing crisis, this does not seem completely sensible to me. With these sales, the city will lose dozens, maybe a hundred apartments, which could have been quickly repaired and resold.”

In addition, although they are not considered redundant assets, the city is also considering the sale of two large apartment buildings on Dornych, near the new district in the former Vlněna complex. Development company CTP, which owns Vlněna, expressed an interest in buying them, and Brno Mayor Marketa Vaňková (ODS) wrote to Brno-stred council to recommend the sale. District authorities will now decide on the next step, but if they eventually sell both houses, the district will have to provide new housing for the 77 people who currently live in 27 apartments. 

However, according to Jiří Oliva (ČSSD), Deputy Mayor for Housing and Property Management, most of the houses to be sold are vacant and in poor condition. “Originally, it was planned that all the houses would be reconstructed, but due to Covid, the city’s revenue shortfalls are dramatic,” he told Seznam Zpravy. The municipality thus divided the houses into two categories – part of them will be repaired and the rest sold. Some of the decisions were taken with regard to future construction, according to Oliva, with high-value properties sold to maximise revenue for the city.

Talking to Seznam Zprávy, South Moravian Regional Assembly member Michal Doležel (Together for Moravia), expressed concern that the sale of real estate to private companies may have a negative effect on the city’s architecture. “While the city is getting rid of structures that are not economically viable, it should think about whether these buildings have any architectural, urban, or original value,” he said.

Until now, the sale of municipal property has taken place using the so-called envelope method. According to Deputy Mayor Tomáš Koláčný (Piráti), the move to online auctions is a significant step towards transparency. “Also, the sale to the highest bidder is insurance against corruption and clientelism. The transition to an electronic auction is one of the next steps in how we want to bring modern, digital processes and more open administration to the city,” he added.

Last month, councillors approved the cooperation with Neutrics a.s., which will implement the project for now, until a company is selected via an open tender to operate the project long-term. 

The city plans to start releasing offers soon, with each sale advertised on aukce.brno.cz, and open to an unlimited number of interested buyers. 

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