Project worth 100 million euros: Government accepted Avenue group’s offer for Kupari

The government accepted the offer of Avenue group for the realization of the tourist development project Kupari, valued at approximately 100 million euros, which is expected to have around 800 beds with 4 or 5 stars.

This is a group of bidders consisting of Avenue Investments from Zagreb and Avenue Osteuropa based in Vienna, which is the only one that submitted a binding offer for the Kupari project. The Avenue group’s offer was accompanied by a statement of joint action in the realization of the project by the hotel management company Marriott International Inc., specifically the Ritz-Carlton brand.

Tourism Minister Darko Lorencin emphasized that this is a pioneering project for the preparation and activation of non-perspective military property, which has paved the way for the realization of other projects, for example at the locations Muzil and Šepurine.

He also reminded that only the Avenue group’s offer was received for the public tender for Kupari, published in May of this year, and stated that this was because the criteria in the tender were exceptionally high. “If a quality level of 3 stars had been requested, there would have been 50 investors, but we sought a level of 4 or 5 stars,” said Lorencin.
Additionally, he pointed out that with this project, Marriott is coming to this part of Europe for the first time with its most luxurious brand, Carton.

Prime Minister Zoran Milanović stated that he found complete neglect and disorder in Kupari, in both physical and legal terms, which has been formally organized over the past four years.

“These are not investments that can happen overnight; these are not kiosks but a huge investment with very high criteria. There are already top world hotels at neighboring locations, the best of the best, and this now raises that level even further. The entire Dubrovnik region has experienced a hotel renaissance in these four years; this area is now completely unrecognizable, from Plata and Srebreno to Mlini and Kupari,” emphasized Milanović.

He added that the realization of this project means several hundred new jobs in Kupari and several hundred more jobs in the service sector related to such a class and quality of guests.

The government’s decision actually pertains to three concessions granted for 99 years, namely the establishment of building rights, the lease of the Grand hotel, and the concession on the maritime property for the purpose of constructing and economically utilizing the beach in the Brašina area.

Among other things, the Avenue group offered 172 thousand euros annually for the establishment of building rights, then 58.5 thousand euros for the annual lease of the Grand hotel, a concession fee on the maritime property of 8.10 kuna per meter (about 640 thousand kuna annually) as a fixed part, and a variable part of the concession fee on the maritime property of 3 percent of the total annual income generated from providing services on the beach.

The area of maritime property being granted in concession as part of this project totals nearly 79 thousand square meters, of which 75.8 thousand is land and sea beach space, and 3 thousand square meters is the marine aquatorium of two separate moorings.

The value of the Kupari project is estimated at approximately 100 million euros, and ultimately this tourist complex is expected to have around 800 beds with 4 or 5 stars.

Additionally, the government accepted the proposal for an agreement between the state and the municipality of Župa dubrovačka, based on which the municipality would acquire the right to 25 percent of the revenue that the state will generate from the fee for establishing building rights and easements on state-owned land, as well as part of the revenue from the lease of the Grand hotel.
Lorencin emphasized that this municipality played an important role in preparing the Kupari project, which was developed from scratch, as when the work began, that location had neither catalog measurements nor land registries.

Before the government meeting, in response to journalists’ questions about whether a technical government can make such a decision, Deputy Prime Minister Branko Grčić stated that a technical government cannot make decisions that would impose new financial obligations on the government or the state.

“This is a project through which the government ensures an influx of approximately 100 million euros for Croatia through investment in the renovation of Kupari, the construction of hotels, new facilities, and so on, so everything is fine here,” said Grčić.

Among other things, the government also decided that state incentive funds for housing savings collected in 2016 will amount to 4.1 percent, or 205 kuna on the maximum amount of available savings.