Daily: Tallinn city government sold Porto Franco land at big discount

The Porto Franco development in Tallinn.
The Porto Franco development in Tallinn. Source: Siim Lõvi /ERR

A businessman currently detained under corruption suspicions enveloping a Tallinn real estate development was able to negotiate a far better land deal with the capital's government than the asking price had been. A security service investigation into the project led to the resignation of Jüri Ratas (Center) as prime minister last week.

Hillar Teder, a major Center Party donor, was able to reduce the price of the plot of land in Tallinn's harbor district by €660,000, from one million, over the course of two meetings, investigative weekly Eesti Päevaleht reports (link in Estonian). Tallinn's Center Party-led city government had previously denied any wrong-doing in the case.

Tiit Mäger, head of Tallinn City Government treasury's legal department, told Eesti Ekspress that the original asking price had been provisional and not finalized. Developers of the project, the multi-use Porto Franco complex, wanted the land for traffic access. Porto Franco is majority-owned by Rauno Teder, the son of Hillar Teder.

The two Teders were involved in a heated negotiation which saw the price reduced to €777,000 with no extension of payment schedule; this price was subsequently reduced to the "winning" deal in March 2020. The deal also involved the cancellation of a penalty in excess of €190,000, issued by the city due to delays in construction (Porto Franco is still under construction – ed.).

Smaller payment installments were also set up.

Hillar Teder is one of five suspects following the investigation which became public on Tuesday, January 12, into activities at state loan agency KredEx, which issued a €39-million loan to Porto Franco at a time when aid was mainly required for existing businesses struggling under the coronavirus crisis.

While the Center Party is in office alone at city government level, the latter denied any wrongdoing in the case. Center as a whole was declared suspect, with its secretary-general, Mihhail Korb, resigning the same day the investigation became public.

Korb had allegedly struck a €1-million deal with Hillar Teder in return for favorable treatment from city authorities in obtaining the land needed for access roads to the Porto Franco site.

Jüri Ratas resigned in the small hours of Wednesday, January 13.


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Editor: Andrew Whyte

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