Tallinn shelves Linnahall project

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The Linnahall from the air.
The Linnahall from the air. Source: Siim Lõvi /ERR

The Tallinn city government decided on Wednesday it is insensible to pursue the Linnahall building's development project in the conditions of modest investor interest and unstable situation of the construction market.

It is not sensible to move forward with the Linnahall project based on the current plan and we should revisit the decision once the economy and political situation have stabilized, investors can once again make carefully considered decisions and adequately gauge their risks, the city government said in its decision.

Tallinn in February hired KPMG Baltics as consultants to find investors willing to join the city in renovating the imposing but nearly derelict Linnahall building into a conference and concert venue.

KPMG Baltics found that investors have become uncertain in a situation where contractors are not willing to draw up long-term forecasts or enter into fixed-price contracts. Lackluster investor interest means that sufficient competition in choosing a partner for the city would likely not be created.

Tallinn is also unsure of how much it could invest in the renovation. "Calculating the project cost has become impossible in the current market situation, which fact considerably hikes risks. The feasibility and volume of the city's contribution should be decided and potential investors' expectations mapped once the economic and political situations stabilize to ensure sensible use of municipal resources," the Wednesday decision reads.

Mayor: We will reevaluate come fall

Tallinn Mayor Mihhail Kõlvart told ERR that the project will not be axed and that whether a competition to find a partner could be held and when will be reevaluated after the summer.

"But we will be working on competition conditions and negotiating with potential investors moving forward," Kõlvart said, adding that entrepreneurs still take an interest and occasionally contact the city government.

Tallinn studied the willingness of companies to participate in the project last fall, with four companies expressing interest, Kõlvart said at the time.

The Tallinn Linnahall (originally the V. I. Lenin Palace of Culture and Sports) is a multi-purpose venue situated in the harbor, just beyond the walls of the Old Town. It was completed in 1980 and is not to be confused with the Tallinn Town Hall which is what its name literally translates as (city hall).


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Editor: Marcus Turovski

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