Draft means gminas can veto large projects
A new draft of the zoning law that gives gminas more rights to limit large-scale retail developments could push some developers to locate their projects further from city centers, retail developers said.
"Simple retail projects (hypermarkets) could be pushed far from city centers," said Jacek Wesolowski, general director of Polinvest, a company developing the Klif shopping centers in Poland.
Last week the government approved the Economy Ministry's zoning law amendment, but the amendment still needs to be approved by Parliament before it becomes a law. If made into a law, it would give local authorities or gminas more rights to regulate retail developments.
Currently there are no restrictions on any retail projects located in areas defined as "retail zones," according to the government's housing and urban development office. The amendment, which would give gminas more power to limit the size of retail projects in these zones, is a move aimed at curbing the development of large-scale hypermarkets, the office said.
Gminas have said that they welcome the new legislation plan. "It's in the right direction; it would be a positive solution," said Stanislaw Osowski, director of the trade department at Warsaw's Gmina Centrum.
He said current planning regulations for retail zones allow for the development of anything from 300-10,000 square meters of retail space and that gminas have little power to regulate the size of the projects. "Saturation of large-scale projects is not good," Osowski said.
"We're not saying that large-scale projects shouldn't be developed, but density should meet demand," he said.
However, retail sources said that if some gminas look to limit large-scale projects, others want to attract them. "I think there will be a gmina that would like to benefit from that and attract investors," Polinvest's Wesolowski said.
Developers have said gminas can already simply deny construction permits if they don't want large-scale retail projects but rarely use that right. "I don't know of any case where a gmina blocked a large-scale development," said Grzegorz Pekalski, marketing manager at Cefic Polska, a unit of the French retail developer. "They have no will to do that," he said.
Pekalski said that a couple of years ago British legislators also gave more power to local municipalities to restrain retail developments, but the municipalities continued competing for those developments.
In Poland there is still a lot of room for additional large-scale retail projects and developers believe new regulations won't hinder fresh development.
"I don't think it will have a large impact on the market," Pekalski said.
Other companies developing retail projects also say they believe there is room for more large-scale retail services in Poland. "For sure it's not as saturated as in Western Europe," said Renata Juszkiewicz, a spokeswoman for German retailer Metro. "There will definitely be more hypermarkets developed in Poland."
Metro, which has eight large-scale commercial centers called M1, plans to expand. "We want to have the chain (present throughout) the entire country," she said.
Even some city and gmina officials say retail development shouldn't be curbed artificially. "Privately I'm against regulating the market," said Leszek Cislo, director of the development and the economic policy department at Gmina Centrum. "One shouldn't create artificial barriers," he said.
Polinvest's Wesolowski said such artificial barriers could also work against small retailers. For example, Polinvest's average Klif shopping center has 30,000 square meters of retail space, which qualifies it as a large-scale shopping center. However, Klif accommodates about 120 smaller retailers that don't occupy more than 500 square meters of space. By introducing artificial barriers, gminas could prevent small retailers from grabbing quality retail space in modern shopping centers, he said.
