Warsaw is cashing in

The City of Warsaw will sell its stakes in the Rondo Wasa and Złote Tarasy joint-venture companies this year. In both cases, the city provided the land for the developments. It currently owns 48 and 23 percent of the companies, respectively, and is expected to obtain zł.95 million for its Rondo Wasa shares. The value of the Złote Tarasy stake has yet to be appraised.

"In March, we will begin negotiations concerning the sale of the shares in Złote Tarasy. In the case of Rondo Wasa, the negotiations are already nearing completion," Warsaw's Deputy Mayor Jarosław Kochaniak recently told Rzeczpospolita. "The [Rondo Wasa] company is set to build office buildings, but this is not a task for the city," he added.

Rondo Wasa was established in 1997 by the authorities of the now-defunct Gmina Centrum administrative unit in Warsaw and the Swedish developer Skanska. The company was to construct a complex of office and service buildings on the city-provided 9,700-sqm plot along Al. Jana Pawła II. At present, Skanska is developing the land with its Atrium City project and plans to erect two more buildings on the plot's southern area.

The establishment of the Złote Tarasy company in 1998 resulted from a similar deal, and led to the construction of the Złote Tarasy shopping mall by developer ING Real Estate.

Warsaw's partnerships with Skanska and ING Real Estate, however, have stirred controversy from the very beginning. Critics have decried the deals as favoring private firms and they have suggested that the city did not properly appraise the value of the land designated for the newly-formed companies' use.