Warsaw's slope set for the chop
The peculiar but popular ski slope in the centre of Poland's capital, Całoroczny Stok Narciarski (All-year ski slope) Szczęśliwice, will be closed down unless City Hall changes the property taxes the owner of the complex has to pay.
The year-round ski slope was built and financed by Energopol Trade SA in 1998 and 1999 at a cost of zł.48 million. It is located on what was a dumping site before the war. Its business activities include hosting sports clubs, ski and snowboard schools, and leasing rooms to sports equipment companies. Although the owners claim that the place is extremely popular and attractive, especially for the citizens of the Ochota district, profits have eluded it to date, and Energopol say extortionate property tax is to blame.
Energopol, as the owner of the slope and complex, leases land of 35,000 sqm from City Hall, at a cost of about zł.10,500 per month. The highest cost, however, which is largely contributing to the company's troubles, is the real-estate tax, and more specifically, the tax on the structure/building, which is calculated at two percent of the building's value. As the building is worth around zł.46 million, the owner has to pay a massive zł.73,500 in tax every month.
Energopol claim that the valuation includes the costs of forming the slope and the ground, which involved the transportation of 50,000 sqm of waste from the site, firming 200,000 sqm of soil to heighten the slope by 14 meters, and securing the trees in the area. At the same time, the formed soil was included in the building's value as a capital asset, which increased the tax basis and the tax cost by 100 percent.
The owner's standpoint is that assets such as chairlifts, T-bars, watering and snowing systems, access routes, car parks, and sewage should be valued at about zł.20 million (which would agree with the estimates by one independent expert) and that only this amount should constitute the tax base. Thus, Energopol is arguing for a major reduction in the real-estate tax, which would allow it to get rid of its deficit and continue operating.
The owner cannot increase the ticket price, as this would make it unattractive to customers. The average price of a one-hour ticket in the winter months is zł.21.50, and to break even it would have to be zł.50 per person per hour. The income for the period between April 2004 and April 2005 was zł.816,500, out of which zł.725,300 was from ticket sales and the remaining part from leasing office rooms, a bar and advertisement spots. In the same period, expenditures reached zł.1.982 million, which involved media (zł.833,000), and tax together with lease rent (more than zł.1 million). This sum excludes amortization costs. As a result, the deficit exceeded zł.200,000 every month. "We know how to make business, how to work out a business plan. Unfortunately, the whole falls apart because of the tax," says Henryk Zebrowski, the president of Energopol Trade SA.
Marcin Blauth, the president of the Warsaw Ski Club (WKN - Warszawski Klub Narciaski), stressed the importance of the slope for skiing development and Polish sport in general. "This slope is the backbone of alpine skiing in Warsaw. There must be a place where young people can at least start skiing. The only thing we need is goodwill and action. We want to influence the decision makers so that the sporting atmosphere will not disappear from the city."
Energopol and WKN last week called a press conference to which it invited City Hall representatives and the vice president of Warsaw, Władysław Stasiak, in particular. However, he did not deign to appear.
"The City authorities seem not to be interested in the case at all. This is a lack of competence and shows disrespect," said Zebrowski.
The year-round ski slope was built and financed by Energopol Trade SA in 1998 and 1999 at a cost of zł.48 million. It is located on what was a dumping site before the war. Its business activities include hosting sports clubs, ski and snowboard schools, and leasing rooms to sports equipment companies. Although the owners claim that the place is extremely popular and attractive, especially for the citizens of the Ochota district, profits have eluded it to date, and Energopol say extortionate property tax is to blame.
Energopol, as the owner of the slope and complex, leases land of 35,000 sqm from City Hall, at a cost of about zł.10,500 per month. The highest cost, however, which is largely contributing to the company's troubles, is the real-estate tax, and more specifically, the tax on the structure/building, which is calculated at two percent of the building's value. As the building is worth around zł.46 million, the owner has to pay a massive zł.73,500 in tax every month.
Energopol claim that the valuation includes the costs of forming the slope and the ground, which involved the transportation of 50,000 sqm of waste from the site, firming 200,000 sqm of soil to heighten the slope by 14 meters, and securing the trees in the area. At the same time, the formed soil was included in the building's value as a capital asset, which increased the tax basis and the tax cost by 100 percent.
The owner's standpoint is that assets such as chairlifts, T-bars, watering and snowing systems, access routes, car parks, and sewage should be valued at about zł.20 million (which would agree with the estimates by one independent expert) and that only this amount should constitute the tax base. Thus, Energopol is arguing for a major reduction in the real-estate tax, which would allow it to get rid of its deficit and continue operating.
The owner cannot increase the ticket price, as this would make it unattractive to customers. The average price of a one-hour ticket in the winter months is zł.21.50, and to break even it would have to be zł.50 per person per hour. The income for the period between April 2004 and April 2005 was zł.816,500, out of which zł.725,300 was from ticket sales and the remaining part from leasing office rooms, a bar and advertisement spots. In the same period, expenditures reached zł.1.982 million, which involved media (zł.833,000), and tax together with lease rent (more than zł.1 million). This sum excludes amortization costs. As a result, the deficit exceeded zł.200,000 every month. "We know how to make business, how to work out a business plan. Unfortunately, the whole falls apart because of the tax," says Henryk Zebrowski, the president of Energopol Trade SA.
Marcin Blauth, the president of the Warsaw Ski Club (WKN - Warszawski Klub Narciaski), stressed the importance of the slope for skiing development and Polish sport in general. "This slope is the backbone of alpine skiing in Warsaw. There must be a place where young people can at least start skiing. The only thing we need is goodwill and action. We want to influence the decision makers so that the sporting atmosphere will not disappear from the city."
Energopol and WKN last week called a press conference to which it invited City Hall representatives and the vice president of Warsaw, Władysław Stasiak, in particular. However, he did not deign to appear.
"The City authorities seem not to be interested in the case at all. This is a lack of competence and shows disrespect," said Zebrowski.
