13 Years Later, 46 Times More Expensive
Real Madrid’s imagining of the future apperance of its stadium on the Paseo de la Castellana.
The current stadium. The plots of land to be given to Real Madrid are outlined in red. The strip between the Green Zone (on the left) and the Stadium (blue) is labeled “preferred use of the Paseo de la Castellana.” The section to the lower right is the New Green Zone.
13 Years Later, 46 Times More Expensive
An error by City Hall in 1998 has obligated it to compensate Real Madrid now for land whose value has risen from €500,000 to €22.7 million. As compensation for the land that was never given up as promised, the club will obtain other land that can be developed: a plot in Valdebebas and a strip that surrounds its stadium.
El País: Trece años después, 46 veces más caro
Elena G. Sevillano reporting from Madrid November 3, 2011
Florentino Pérez’s plans to remodel Santiago Bernabéu Stadium have obligated the club and City Hall to update reciprocal debts stemming from the agreements they signed in the 90s, among them the one for the Four Towers in the Sports City (Ciudad Deportiva). There was a loose end to tie off from that era: a 70,000 square meter parcel in Las Tablas which City Hall promised to give the club in 1998.
It was worth 488,000 euros. But someone made a mistake. A glaring error. It obligated City Hall to give up land that was intended for basic sporting use, that is to say, for public ownership. By definition, it couldn’t be passed into private hands. Thirteen years later, with the necessity of bringing the debts between the club and the city to zero, Gallardón has had to compensate Real Madrid for the land it is owed. A new valuation showed that its value had multiplied by 46. The tract in Las Tablas is now worth 22.7 million euros.
In 1998, Las Tablas was little more than a dry plain. The parcel in question was a field not yet urbanized which, according to the experts at the time, was not worth more than half a million euros. Real Madrid, in its economic report for 2010-2011, still valued the land at €488,000 and defined it as “property of the club, obtained during a previous land exchange with the Most Excellent City of Madrid.” It adds that “this land has not been exploited, nor does it have a defined use.” But things have changed. Las Tablas is today a growing residential area to which the metro arrived in 2007 and in which big businesses like Telefónica have established headquarters. City Hall put a price on the land “conforming to its current value,” following the agreement it made with the club on July 29, and that value is €22.7 million.
“Despite the time that has passed since the agreement, and though the land still has not been given up,” the agreement has been verified, and it has the signature of the Councillor of Town Planning, Pilar Martínez, on behalf of City Hall. In order to compensate the club, the city will give, among other things, four plots of land in Opañel (Carabanchel) to make chalets. They add up to 8,000 square meters and are classified for residential use for “semidetached single family homes.”
The agreement also includes a parcel in the Airport City’s Valdebebas Park (3000 square meters for tertiary usage such as offices and hotels) and other property situated in the Santiago Bernabeu itself. This last, 3600 square meters, is a small parcel of land in an irregular shape. It includes a band three meters wide around the perimeter of the stadium, corresponding to the pillars and buttresses supporting the third level and the cylindrical evacuation towers. These are regions whose surface the club occupied and which will now become its property.
The parcels for chalets are valued at €4.4 million; the area in Valdebabas is worth €8.7M and the towers of the Bernabeu €6.9M. The sum, less value-added tax, is still €2.7 million short of Las Tablas’s value. However, the agreement between the club and city recognized that the club did not undertake some works – constructing an underground parking area on the corner of Rafael Salgado and Concha Espina Streets and lowering the connecting street and a public plaza – which agreed to undertake in 1991, and because of that the debt is considered settled. City Hall has also subtracted 92,036 from the club’s debt because despite not owning the property of Las Tablas, Real Madrid paid the corresponding tax for it each year between 2002 and 2010.
City Hall has not explained how such an error could be made. When the agreement was signed May 29, 1998, establishing that Real Madrid would receive Parcel B-32 in Las Tablas, the land was already zoned for basic sporting use. The agreement signed this spring affirms that and classifies the land as “resources with public title”; “its surrender is not feasible, and municipal ownership should be maintained.”
According to urban regulations of the current General Plan for Urban Ordination (PGOU), it cannot be passed into private hands. The agreement signals that “it is not a physical impossibility but a juridical one.” If the land had really been surrendered, City Hall would have had to expropriate it later.
Real Madrid has been demanding the Las Tablas land for years, most recently January 28 of this year in a writ presented to the urban planning registry. Knowledgeable sources of the negotiations between the club and city assure that Florentino Pérez wanted the land to be reclassified because he was interested in keeping the land, which is close to the club’s current sporting city. City Hall would have had to buy land from private owners to compensate for the public land it was giving up, and this would have cost more than €22.7 million. Pérez also threatened to rescind the 1998 agreement because he considered it incomplete, according to the same sources. This would have devolved the land for the Four Towers to Real Madrid and cost the public treasury €40 million.
Municipal sources assure that “the city isn’t worse off” for its agreement with Real Madrid. If the city had compensated the club years ago, it would have had to rid itself of other properties, just as it is now. What value would that land have had now? Would it have multiplied by 46 like the tract in Las Tablas did over the last 13 years? It’s impossible to know. A spokesman for the Urban Development Department said the valuation was made with “official scales”. The agreement signed in July stated that the valuation of this land and those City Hall has surrendered as compensation would “conform to their current value”, and the regulations obligate “equivalent payment or substitution conforming to the current value of the real estate which was not surrendered.”
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