Rae Municipal Council agrees to sell property outside Tallinn to IKEA

Põlluvälja property in the village of Külma, site of the proposed IKEA store.
Põlluvälja property in the village of Külma, site of the proposed IKEA store. Source: Facebook/Rae vallavalitsus

In a 14-6 vote on Tuesday, Rae Municipal Council decided to sell the 20.73 hectare Põlluvälja property in Kurna village to Swedish furniture group IKEA. Previously, the municipal council's budget and economic council had proposed not selling the property to IKEA, but rather putting it up for auction.

Following half a year of negotiations, IKEA and Rae Municipality reached an agreement regarding the property in early October. The municipal government then sent the agreement to the municipal council for confirmation.

Prior to Tuesday's council meeting, its budget and economic committee had voted 8-2 to propose to the council not to approve the sale of the property, writes regional paper Harju Elu (link in Estonian).

Rae Deputy Municipal Mayor Priit Põldmae said that IKEA representatives had promised to build a new exit off of Tallinna ringtee, roundabouts on the property, as well as collector roads. This was also one of the reasons why the municipality was interested in continuing talks with IKEA. The municipality's concern was that IKEA might follow up with a low price offer; according to Põldmäe, there have been cases elsewhere in the world in which IKEA wanted land for free in exchange for their establishing of a new store.

Nonetheless, the Swedish furniture giant made an offer — €10 plus VAT per square meter — which was higher than negotiators on the municipal side could have expected. As payment conditions didn't suit the municipality, however, talks continued. A deal was finally struck once IKEA agreed to pay the majority of the cost by concluding a contract under the law of obligations, and one third after planning took place.

Economic and Budget Committee chairman Agu Laius told the paper that the committee had several doubts, including regarding the risk of pollution, which is why the committee recommended a public auction, not the direct sale of the property to IKEA.

Former Rae Municipal Mayor and current MP Mart Võrklaev (Reform) said that the €2 million the municipality is to receive from IKEA may not seem like much, but in addition to the money, IKEA will help boost the area and increase the property's value.


Download the ERR News app for Android and iOS now and never miss an update!

Editor: Aili Vahtla

Hea lugeja, näeme et kasutate vanemat brauseri versiooni või vähelevinud brauserit.

Parema ja terviklikuma kasutajakogemuse tagamiseks soovitame alla laadida uusim versioon mõnest meie toetatud brauserist: