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City of Tallinn fines Porto Franco developers €90,000 over missed construction deadlines

The Porto Franco development on Tallinn harbor's waterfront.
The Porto Franco development on Tallinn harbor's waterfront. Source: Siim Lõvi /ERR

Developers of the Porto Franco site in Tallinn's Old City Harbor area have been fined €90,000 by the City of Tallinn over missed deadlines, including those relating to land use permissions, and the completion of the development's promenade zone.

The fine was reached as part of an out-of-court settlement and is lower than the €150,000 sum which the developers, Porto Franco OÜ and DeltaMax Group OÜ, could have been liable for.

Tallinn Deputy Mayor Tiit Terik told ERR that the agreement was good for the city.

Terik said: "The negotiations were protracted, but we found a compromise via thee lawyers. Had it gone to the courts, I doubt that a court would have demanded the full amount of the fine in favor of the city."

Tiit Terik (Center). Source: Siim Lõvi /ERR

The sum of €90,000 was reached via out-of-court settlement; Tallinn City Government decided at a session on Thursday that developers Porto Franco OÜ and DeltaMax Group OÜ will be jointly and severally fined the €90,000 over non-compliance with the contractual construction deadlines.

The commercial register lists the real beneficiary of both companies as businessman Rauno Teder, ERR reports.

As of now, 79 percent of thee development's surface area lacks the correct permit to use, which means the fine should have been as high as €151,000.

The developers did not agree to pay that sum, leading to negotiations on an out-of-court settlement beginning.

The €90,000 is to be paid to the City of Tallinn in three installments.

In addition, the contract has been altered to require the developer to build 100 percent of the promenade area, instead of the previous 75 percent. This must be completed no later than the end of 2028.

The building deadlines for properties at Kai tänav 4, Kuunari tänav 1 and Laeva tänav 1  were also excluded from the contract, while the city only requires the completion of publicly used roads and city squares by the deadline.

In January 2021, an Internal Security Service (ISS) investigation into goings on with the Porto Franco project revealed allegations of bribery, an illegal donation of a million euros, and money laundering activities aimed at concealing this activity. This was all linked to the Center Party, in office at both national and capital city levels at the time, and led to the resignation of Jüri Ratas as prime minister and the collapse of the Center-EKRE-Isamaa administration.

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Editor: Andrew Whyte, Marko Tooming

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