In the past 17 years, The Croatian Civil Aviation Agency has spent around 7.4 million euros on renting office space, and in the next four years, it plans to allocate another 4.3 million. The government approved a new lease agreement yesterday for a space of about 3,700 square meters in Buzin, at a price of 14 euros per square meter, which would relocate the Agency from its current location on Vukovarska Street.
This would all be quite ordinary if the Agency had not been the owner of attractive land on Krajiška Street in Zagreb since 2014, where it announced the construction of its own office building. Eleven years ago, the Agency purchased the property at Krajiška 20 for 4.3 million euros, after receiving government approval for the purchase.
The purchase, as stated at the government meeting at the time, was supposed to be part of a ‘long-term project to address the Agency’s office space issues,’ which has been operating in rented spaces on Vukovarska since its establishment in 2009.
A Truly Long-Term Project
That ‘long-term’ project has indeed become long-term: since 2014, almost nothing has moved from the deadlock. The Agency continues to operate in rented space, and plans to remain in the new lease until 2030.
Initially, however, it seemed that the project on Krajiška would indeed get underway. As early as 2016, a competition was announced for the conceptual architectural solution for the reconstruction and renovation of the former DTR factory building located on that land, and a winning design was selected.
According to data from the spatial planning information system, the Agency obtained a building permit in 2018 for a building of public and social purpose, but construction never began. Since the purchase of the property, the only concrete action taken was the demolition of the old DTR building, which was damaged in the earthquake and posed a danger to passersby and neighboring structures.
Unprofitable Construction?
When we last contacted the Agency a year ago, they informed us that they were preparing a ‘feasibility study’ for the construction of an office building, and now they state that the project is unprofitable.
– In the process of analyzing possible spatial capacity solutions, before deciding on the lease and new location, the Agency first approached the preparation of a sustainability analysis of the project, i.e., the feasibility of further investment in the property at Krajiška 20. An assessment conducted by an engaged consulting firm showed the financial and logistical unprofitability of such an endeavor: all spatial needs of the Agency (offices, other necessary rooms, halls, and archives), the number of employees, and currently applicable building regulations and the share of green areas were taken into account, and the conclusion is that the project is neither financially sustainable nor logistically suitable for the needs of the Agency – stated the Agency.
They also explained that they have not built the office building so far because the earthquake in 2020 (six years after the land purchase, editor’s note) severely damaged the existing structure, making the entire reconstruction project unfeasible.
They did not provide specific figures as to why the construction of the building in Krajiška is unprofitable. According to our rough calculations, building office space on their own land would cost around 2,000 euros per square meter (the construction of a square meter of office building, according to data from the Croatian Chamber of Architects in 2023, amounted to 1,896 euros per square meter), which means that a building of the size they need would cost around 7.4 million euros – almost the same amount they have spent on rent so far. By 2030, just through new lease agreements, the Agency plans to spend another half of that amount.
Another Long-Term Strategy
However, it is evident that the Agency has some different calculations. After not putting the land into use for 11 years, they will now again develop a long-term strategy.
– The Agency plans to develop a long-term strategy that involves addressing the property issue in Krajiška and ensuring adequate property ownership. Possible options related to the land at Krajiška 20, as the study itself showed, are exchanging the property with another public legal entity or selling the land to a private investor. After conducting a market analysis and available options, it was concluded that both solutions cannot be realized in the short term and will be subject to a long-term strategy – they explain from the Agency.
Cursed Property
Judging by that response, it seems that the property on Krajiška may soon change owners again. And it would not be the first time. As if cursed, the address at number 20 has changed owners and users for years, but has never welcomed residents. The state acquired this property back in 2006, after exchanging it with the City of Zagreb for the complex of the former Military Hospital at Vlaška 87.
Two years later, it was assigned to the Ministry of Science, Education, and Sports, then in 2010 to the Ministry of Justice, and in 2012 to the Ministry of Environmental Protection. None of them put it to use, so in 2013 it was returned to the state, while in 2014 it was taken over by the Civil Aviation Agency. And demolished in 2020.
Even the City of Zagreb has since taken action: the complex of the former Military Hospital at Vlaška is soon expected to be revitalized. Only the land at Krajiška 20 remains vacant and has been waiting for a decade for the Agency, which has yet to take off in the right direction. Because who else, besides the state, would hold land in the very center of the city as dead capital since 2006?
