Arena Hospitality purchased the Pula hotel Riviera from the state for 36.5 million kuna

The hotel group Arena Hospitality has become the owner of the historic hotel it has managed for decades in Pula 'Guesthouse Riviera', signing a purchase agreement with the state as the owner of the property for a price of 36.5 million kuna, Arena announced via the Zagreb Stock Exchange.

Namely, the state had initiated legal proceedings for the return of possession of the historic hotel and payment of compensation for use, but at the end of April, the state and Arena Hospitality reached a settlement, and on Tuesday, the purchase agreement was signed.

Arena considered the settlement proposal and on April 28 reached a settlement with the Republic of Croatia, and consequently on Tuesday, June 2, signed a purchase agreement with the Republic of Croatia, with the aim of acquiring ownership of the Riviera for a purchase price of 36.5 million kuna, Arena stated in the announcement.

This hotel, known simply as Riviera, is located in the old town center, about one hundred meters from the Pula Arena. It is housed in a neo-baroque building from the late 19th century, has 67 rooms, and is currently categorized with two stars.

– The purchase resolves the ownership status of this historic hotel and represents an important step that allows the company to begin planning the renovation of the hotel into a luxurious branded hotel with 80 rooms, thereby restoring the former glory and status it deserves. This project is of strategic importance to the city of Pula, the county, the company, and Croatian tourism in general – Arena stated in the announcement on the Stock Exchange.

Otherwise, the government accepted the decision to resolve the dispute with Arena Hospitality at a meeting in early April and expressed its intention to sell the Riviera hotel. As explained by the Minister of State Property, Mario Banožić, although the Riviera hotel was not valued in the core capital of the former Arenaturist (the predecessor of Arena Hospitality), the hotel has always been in the possession of Arena Hospitality without legal basis, and therefore legal proceedings were initiated before the Commercial Court in Pazin (in March 2019).

The state also requested payment from Arena for the use of the hotel, and at the first hearing in the lawsuit before the Commercial Court (in January this year), Arena presented a settlement proposal under which it would agree to pay the amount of the requested compensation for the last five years if the hotel was sold to them at an estimated value of 35.9 million kuna.

Arena Hospitality had previously, in April 2018, submitted a request to purchase the Riviera hotel, but no agreement was reached regarding the price before the contract was concluded.

To resolve the dispute, collect claims for use, and enable investment to raise the hotel’s category, the government agreed in early April that, after payment of compensation for unlawful use (from 2014 onwards, with default interest), a settlement would be reached with Arena Hospitality, which would pay the compensation for use until the purchase agreement was concluded.

After the settlement was reached and all obligations regarding use (from 2014 until the conclusion of the purchase agreement) were settled, the conditions were met for the government decision to sell the Riviera hotel for a price of 36.5 million kuna, the government stated in the explanation of the decision accepted in early April, and Minister Banožić emphasized that the state would ultimately receive just over 50 million kuna.

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