"Job of the century" for care weighing 100 million

The arrangement of the century and the announcement of a new chapter in Montenegrin tourism, the Government in January 2007 called the multi-decade lease of the most elite summer resort and symbol of the country - city-hotel Sveti Stefan.

Exactly fifteen years later, since the development of the popular Svec - the tourist brand of Montenegro, but also of the former SFRY, only memories and the current threat that the arrangement of the former DPS authorities with "strategic partners" from the Virgin Islands could cost the state one hundred million euros.

Sveti Stefan was practically deleted from the list of the most luxurious resorts and this summer it did not even open its gates to tourists, although for decades, together with Dubrovnik, it was a symbol of elite tourism.

On July 13, 1960, the fishing village of Sveti Stefan near Budva was officially transformed into a city-hotel, a fashionable summer resort visited by the biggest stars of the world's jet set for decades. Just four years after its opening, the New York "Life magazine" included Sveti Stefan among the ten most exclusive hotels in the world, and in 1972 it received the highest international tourist award, the "Golden Apple"...

Today, however, Svetac is closed, and almost everyone is dissatisfied with the "business of the century" of the authorities from fifteen years ago - the tenant of "Adriatic properties", naturalized Montenegrins - a Greek businessman Petros Statis and a Malaysian millionaire Pua Wei Seng, they started proceedings before the Arbitration Court in London and are demanding one hundred million in compensation for non-compliance with the contract, the Government retaliated with a lawsuit, and the locals have been protesting for years because they are practically denied access to the island created by their ancestors, but also because of the devastation and concreting of Miločerski Park.

A silent item from the contract on the construction of apartments

It all started on January 15, 2007, when the then Prime Minister's Government Željko Šturanović gave the green light to conclude a 30-year lease agreement for the hotels "Sveti Stefan" and "Kraljičina plaža" and the villa "Miločer". The contract was then signed by the directors of HTP "Budvanska Riviera" and "Miločer", as well as representatives of "Aidway investments limited" from the British Virgin Islands, the Ministry of Tourism and "Aman resorts management" from the Netherlands.

According to the contract, the guaranteed annual rent is 1,6 million euros, but the contract also stipulates that it can be changed every third year. The lessee undertook to keep the hotels open for a minimum of 11 months a year, but also to invest 50 million euros in the reconstruction of St. Stefan.

The most important thing was kept quiet - the tenant was allowed to build a new one in Miločerski Park, on the site of the former "Kraljičina Plaža" hotel, as well as an annex with 66 apartments for the market, the value of which is more than tens of millions of euros, exactly as much as the reconstruction of the city allegedly cost. Hotel "Sveti Stefan" and Villa Miločer".

The past year represented a turning point, and the change of government was an occasion for Svetac to play political games.

After the locals objected to concreting, in which they were supported by the Budva government, as well as the new management of "Morski dobr", which established that the tenant had illegally appropriated the beaches for a full decade, the company "Adriatic properties" already announced in the spring of 2021 that he will not open the Saint. They accused the Government Zdravka Krivokapića not to honor the contract, and the gates of St. Stephen's remained closed during the season.

The announcement that Svetac will not be opened practically coincided with the optimistic, but will turn out to be accurate, announcements of the new government - that the state will earn 700 million from tourism, despite all the problems with the coronavirus pandemic...

The tenant is demanding 100 million euros before the court in London due to alleged breach of contract and inability to work, in the name of investments in the hotel complex, as well as lost profits for this year and all the following until the lease contract expires.

The government company that owns the city-hotel "Sveti Stefan" and the villa "Miločer" initiated arbitration proceedings before the court in London against the lessee, in order to protect its rights from the contract, but also the shareholders' capital and the company's property. The Ministry of Economic Development (MER) has announced an advertisement for the selection of a legal team that will defend the state...

The lease was reduced to the construction of a condo-hotel

One of the initiators of the initiative to return the city-hotel to state ownership, a local Blazo Kazanegra he told "Vijesti" that 15 years ago the residents believed in the project of the company "Aman Resorts" and were ready to suffer in order for it to come true.

"Consciously or unknowingly, they sacrificed their centuries-old rights and freedoms, as well as the basic human right to freedom of movement (guaranteed by the UN Declaration on Basic Human Rights and the Constitution of Montenegro), believing that something useful was being done for all of them and for the wider community. For a long time, they endured illegal fences and gates in front of Kraljičina beach, which their ancestors used for centuries for fishing, sailing and trade. They endured barricades in front of the city-hotel 'Sveti Stefan', which their ancestors built with their own sweat and hands and lived in for centuries. They kept silent about various forms of injustice and humiliation, respectfully respecting the investor and distinguished guests. They suffered some form of tourist apartheid on their territory, probably the only one in the world in the 21st century - the century of freedom and progress. With this sacrifice of theirs, they essentially became co-investors in the project of the company 'Aman resorts' in a way, because they invested a lot, but they were not accounted for".

Kažanegra added that in the end it became clear that all their restraint, patience and silence was leading to something that no one had originally expected - that, as he said, the entire lease project of "Sveti Stefan" and Miločer is largely based on the construction of a huge condo-hotel in Miločerski park, a significant part of which is intended for the sale of apartments for the market.

He emphasized that the state of Montenegro did have certain benefits from "Amman", but it can be assumed that "the Socialist Republic of Montenegro benefited much more from that 'Saint Stefan', thanks to whom the world heard about Montenegro and Yugoslavia".

"Today's Montenegro would benefit much more if this project were conducted in a different way, with respect for the local community, culture and history, as well as the principle of freedom of movement."

A deal is needed until the court has its say

Kažanegra said that the Miločerski Park is not yet protected as a cultural asset, so the magnificent royal gardens from the XNUMXs are officially recorded in the cadastre as meadows and pastures, and the royal villas and castle as buildings in the economy.

"'Aman resorts', as a renowned global company that has several sites under UNESCO protection in its portfolio, should probably have been the first to offer help in protecting Miločerski Park as a cultural treasure, but for some reason that didn't happen."

He said that the locals expect the city-hotel to open this year at least for daily visits with the payment of an entrance fee, despite the arbitration proceedings in London.

"In this sense, an agreement is needed between the companies 'Sveti Stefan hoteli' and 'Adriatic properties', to contribute at least to some temporary solution in order to preserve our cultural and tourist treasures from further degradation. We expect the Government to seriously understand how important it is that Saint Stephen, as a national treasure, be returned to full state ownership, because the current situation is humiliating, both for Paštrović and for the whole of Montenegro. Therefore, we expect that the Government will soon initiate the procedure to return this illegally privatized (42 percent) valuable cultural heritage to its ownership".

According to him, the locals hope that the days of "tourist apartheid, discrimination and devastation of the cultural heritage of Paštrović and Montenegro" are over.

"For a project to be successful, all parties must be satisfied, and the local community is an important factor in all of that. As far as I'm concerned, despite everything, I wouldn't be opposed to the company 'Adriatic Properties', or any similar investor, being given another chance, but on the condition that they truly understand their previous mistakes and completely change their business policy and the concept of the offer. especially, in terms of relations with the local community, basic human rights and the rich cultural heritage and history of this region".

False opening directed by the minister

The story of the arrangement of the century has been accompanied by numerous controversies from the beginning - the reconstruction lasted six years instead of one, the Svetac was opened several times, and performances for journalists and citizens are just some of the bitter anecdotes.

Two years after the conclusion of the contract, the city-hotel was still in the dark, and from the company "Adriatic properties", which at that time he was running Victor Restis, one of the largest ship owners in Greece, in the summer of 2010, they are announcing their first guests. However, this did not happen.

The state loudly advertised the contract as an exceptional business move, and the then director of HTP "Budvanska riviera" Dusko Lalićević, who after the contract was promoted to ambassador, said that "Aman" is one of the world's most famous hotel companies.

However, nothing happened since the opening, so the then Minister of Tourism stepped in Predrag Nenezic (DPS). He introduced journalists into the excavated "Sveti Stefan". In the villa at the other end of the island, they were met by a famous foreign football player who allegedly came on vacation, which was supposed to send an image to the citizens of Montenegro that the hotel was open.

"What we saw was really impressive," said Nenezić at the time.

A year later - in 2011, there were protests by the locals demanding that the church dedicated to Alexander Nevsky, which was walled up in the casino, be rebuilt. The tenant refuses, but the then Government also opposes it. Police forces broke up the locals' protests and entered the island with an inspection to demolish part of the restored church. This was followed by the agreement of the then prime minister Igor Lukšić and Metropolitan Amphilochia, and the restoration of the church was completed.

The city-hotel was finally opened in 2013 in full capacity. Restis is withdrawing from Montenegro and leaving the business to long-term partners Statis and Pua.

Illegal construction with the permission of the authorities

The renovation of "Svetog Stefan" was illegal, and the tenant practically built two large buildings opposite the city-hotel of 1.600 square meters - without a single piece of paper. They were silent about it, but the then minister also approved it Branimir Gvozdenović and the Budva DPS-SDP government.

In 2010, the NGO MANS warned that it was being built illegally.

"The Greek company 'Adriatic Properties' was already at the end of 2009 carrying out construction works on the Sveti Stefan peninsula. In November 2009, the media announced that the Greeks were "intensively reconstructing Saint Stefan". This information was additionally confirmed in January 2010, when 'Adriatic Properties' assured that around 30 villas on Sveti Stefan would be completed by the summer season. This reconstruction from the end of 2009 to May 2010 was illegal. Namely, on May 4, 2010, the Ministry of Spatial Planning and Environmental Protection issued the Budva Riviera Hotel Group, as the owner of the hotel, a construction permit for reconstruction. It follows from this that the Greeks have been carrying out works illegally for more than half a year", MANS stated at the time.

They pointed out that "Adriatic properties" started the illegal construction of two buildings in Miločerski Park in early 2010.

"In March, it was announced that two buildings with a total area of ​​1.600 square meters were being built, which should be used for hotel service. The company announced at the time that the construction of the facilities 'began after it was determined that the previous plan, which we inherited, did not provide for a large enough storage area and space for a laundry that could serve the hotel complex on Sveti Stefan. On March 9, 2010, the competent inspection for the protection of the area determined that 'Adriatic properties' was carrying out works without an issued construction permit and indicated a ban on the execution of all further works. An extraordinary inspection on May 10, 2010 found that 'Adriatic properties' continued with the construction of buildings, so the inspector issued a demolition decision on the same day.

That's when the municipal government enters the scene, finding a Solomonic solution in order to meet Minister Gvozdenović. includes two concrete buildings in the plan of temporary buildings - classifying them as kiosks and stalls. The buildings were never demolished...

With the request of the "first sister" and the support of Pajović for a lower rent

The government led by Prime Minister Krivokapić, after ten years, removed the secrecy mark from the documents related to the lease of the hotels "Sveti Stefan", "Miločer" and "Kraljičina plaža".

Lawyer Ana Đukanović, the sister of the current president of the country Milo Đukanović, she wrote on November 6, 2012 to the then Prime Minister Lukšić, asking to reduce the rent paid by "Adriatic properties" according to the contract. After her letter, on November 29 of that year, the Government adopted the annex proposal for three hotels and forwarded it to the Assembly, which adopted the annex only after three years, because the then coalition of DPS and SDP did not have a majority for that act. Later, Đukanović's government received the support of part of the then Pozitivna, and the annex for Sveca and Miločer was adopted at the end of July 2015.

The annex for Kraljičina Beach was adopted half a year later.

The annex for "Sveti Stefan" extended the lease for 12 years until 2049 and reduced the rent from 1,6 million to 1,1 million euros. The annex for Kraljičina plaža extended the lease from 30 to 90 years and enabled the construction of a condo-hotel, with half of the apartments for sale and half for hotel business.

The voice of the leader of Pozitivna Darko Pajović He "decided" that the Assembly should extend the contract, and he was given an ambassador's position in Beijing...

Đukanović was a guest at the wedding of Statis, the Greek reciprocated when he married Blažo

The president of the country, Milo Đukanović, was linked to the project in Miločerski Park and the leasing of "Sveti Stefan", but he denied it on several occasions, as did Statis. Nevertheless, the ties between DPS leaders and tenants have been "unbreakable and friendly" for years.

It all started in 2007 when Đukanović was one of the guests at the wedding of Petros Statis in the "Splendid" hotel in Vienna. Đukanović responded 12 years later, when he invited Statis to his son's wedding Milder, in the "Sveti Stefan - Miločer" complex.

The locals, as well as the Budva government, publicly said that Đukanović was building apartments for the market in Miločerski Park. Statis denied this, stating that Đukanović was not his business partner.

Nevertheless, Đukanović took on the role of spokesperson for "Adritic Properties" last summer, using the fact that the hotel was closed to lash out at the Government.

"Only an absolutely irresponsible government could make a representative part of our tourist offer almost equal to a mockery, to lose an investor and to call into question the realization of the projection I was talking about, Montenegro as a competitive tourist destination in the Mediterranean. Aman is not opening Sveti Stefan this year, Milocer is not opening," said Đukanović, announcing the possibility that the tenant would initiate court proceedings, which has come true.

The head of the state and DPS also commented on the clip on social networks, after citizens were allowed to swim at Kraljičina beach after a full decade and a half.

"Kraljičina beach, where we were the envy of the whole world, I read today on the clip you saw - selling beer and kebabs for one euro. They all came with their blankets and umbrellas and are trying to alienate something that is not theirs".

Kazan: Porto Montenegro raised the value of Tivat

In order to adequately assess the effects of the lease of "Sveti Stefan" and Miločer, a comparison should be made with somewhat similar projects, such as Porto Montenegro, perhaps Porto's, Blažo Kažanegra assessed.

"When we compare Sveti Stefan and Porto Montenegro, we see two very different projects with diametrically opposite effects. Porto Montenegro is open to everyone and yet it is full of rich guests who come with expensive yachts and private jets. Sveti Stefan is closed to locals and citizens, and again its guests are no more elite than those from Porto. Guests from Porto are not bothered by the locals and citizens who walk right next to the expensive yachts, while in the case of Amman, the locals and citizens were not even allowed to approach the ramparts of the city-hotel, so that supposedly elite guests would not be disturbed".

He pointed out that Porto Montenegro significantly increased the value of the entire Tivat and its surroundings, while Aman decreased the value of private accommodation over time, because guests had nowhere to swim.

"Porto non-stop improves culture, while Aman and Adriatic properties directly or indirectly participated in the devastation of the valuable cultural heritage of Paštrović, Montenegro, and Europe. Porto adapted and upgraded the old shipyard, while Amman and Adriatic demolished the old Royal Garage from 1936 (because it was not protected on paper as a cultural asset, but it had to be), not to mention the interventions on the six-century-old St. Stephen's . Porto made a brand out of a neglected and dilapidated shipyard and military base, while Aman made a new brand out of the great brand of old Yugoslavia, which did not succeed in overpowering the previous one even close".

According to him, Porto has preserved the soul and shipyards that are only a hundred years old, creating a museum, while Aman and Adriatic "behaved very irresponsibly towards the cultural heritage that is six centuries old".

"The residents of Tivat are mostly satisfied with Porto, the residents of Sveti Stefan are mostly dissatisfied with Amman. We would like it all to be different and to say now that we are satisfied, but unfortunately it is not so".

Svetac had an annual profit of half a million dollars when the cottage was built for 3.000

Kažanegra assessed that the investor clearly did not adequately integrate the local community, nor did he take into account local traditions and culture.

"As the architect Slobodan Bobo Mitrović said, there was nothing on Sveti Stefan that indicated the history of the place and local tradition. The whole concept should be based on the rich cultural heritage and traditions of the local community. The summer stage, which was designed in 1982 by academician architect Brano Mitrović, a native of here, was systematically degraded. The investor obviously did not need theater performances within the 'City Theatre', nor various events promoting local culture, while we often see members of the world's elite in the media happily visiting and sponsoring various cultural events. In the last few years, this stage has been completely neglected and turned into a landfill...".

According to him, the "Queen's chair", which they often visited as children, was also not needed after the Nobu restaurant moved from there next to the Summer Stage a few years ago. Kažanegra says that the location was first devastated by various plastic awnings and constructions, and then neglected, with a complete ban on access.

As he emphasized, "they still have to be realistic and admit that there were certain benefits in the Aman resorts project".

"But when we compare it with the old St. Stephen's from the Yugoslavia era, we see that it is not of particular importance. A certain number of locals were employed in Amman's Saint Stefan and had stable incomes with paid contributions, which is commendable, but still many more were employed during Yugoslavia, with much higher incomes. Aman has set some new standards in terms of management, organization of management, quality of offer, but even the old city-hotel, which was awarded the Golden Apple, was not far behind in these aspects. Aman brought quality and famous guests, but many more such guests came during the old St. Stephen's time. Not to mention many well-known names from that time...".

He assessed that Amman generated income and paid certain taxes and contributions, but old Sveti Stefan had much higher incomes.

"According to the words of the former director Vladimir Mitrović and the Minister of Tourism, Sveti Stefan made a net profit of 540 thousand US dollars in one year during its golden age, while the revenues were in the millions. Economic experts can easily calculate how much that sum would be today, with the necessary adjustment of monetary parameters. For example, the construction of a small cottage back then in Pržno cost about three thousand dollars. The company always operated in the red, claims Mitrović, and the workers had up to 19 salaries. From the business earnings of the company, workers went abroad for education and training, supplementary salaries were distributed, the Maestral hotel was built, and there were also plans to build a new hotel in Kamenovo, considering the financial possibilities at the time".

The government expects it to open this year, regardless of the dispute

In situations where it is evident that a certain contract is not respected, it is the duty of every responsible government to review the arrangement and take the necessary actions to protect its contractual rights, the Ministry of Economic Development (MER) said.

"In relation to the existing lease agreement, the lessee is obliged to keep 'Sveti Stefan' open for at least eight months during the year, so we expect that, in accordance with the contractual obligations, the lessee will open the hotel in 2022," informed "Vijesti" from the department of Jakov Milatović.

When asked if they expect the Government to resolve the dispute with the investor, they said that the Government has chosen the American law firm "McDermott Will & Emery", which will protect the interests of the state.

"As it is a confidential proceeding conducted before the London Court of International Arbitration, at this time we would not prejudge the way in which the dispute will be resolved, but we would like to point out that we believe that the investor will recognize that it is in their interest to respect its contractual obligations until the final decision is made in the arbitration procedure".

They state that the issue of Miločerski Park is of great importance for the Montenegrin economy, tourism and the residents of Budva.

"However, bearing in mind that Montenegro relies heavily on tourism, it is very important that there are serious investors and that recognized names from the world of hospitality come, which will improve the tourist offer of our country and additionally attract tourists. On the other hand, the Government will require every investor to comply with the obligations from the contract, because only by fulfilling the obligations can we build a correct relationship to mutual satisfaction".