1.6.2013

EN

Official Journal of the European Union

L 148/52

(1)

By letter of 10 September 2007, the Stichting Behoud Damplein Leidschendam (hereinafter ‘渢he Stichting‘�, a foundation set up in 2006 to defend the interests of residents located in the vicinity of the Damplein in Leidschendam-Voorburg (the Netherlands), submitted a complaint to the Commission concerning the alleged grant of State aid in the context of a real estate project initiated by the municipality of Leidschendam-Voorburg in co-operation with a number of private parties.

(2)

By letter of 12 October 2007, the Commission forwarded the complaint to the Dutch authorities for their consideration, along with a request to reply to a number of questions. The Dutch authorities submitted their reply by letter of 7 December 2007. The Commission sent further requests for information to the Dutch authorities by letters of 25 April 2008, 12 September 2008, 14 August 2009, 12 February 2010 and 2 August 2011. The Dutch authorities replied to these requests by letters of 30 May 2008, 7 November 2008, 30 October 2009, 12 April 2010, 29 September 2011 and 3 October 2011, respectively. On 12 March 2010, a meeting took place between the Commission services and the Dutch authorities and, as a result, additional information was submitted to the Commission by letter of 30 August 2010.

(3)

By letter of 26 January 2012, the Commission informed the Netherlands that it had decided to initiate the procedure laid down in Article 108(2) of the Treaty on the Functioning of the European Union (2) (hereinafter: ‘淭FEU‘� in respect of a specific measure taken in the context of the real estate project. The Commission‘檚 decision to initiate the procedure (hereinafter ‘渢he opening decision‘� was published in the Official Journal of the European Union (3). By way of this decision, the Commission invited interested parties to submit comments on its preliminary assessment of the measure.

(4)

By letter of 18 April 2012, the Dutch authorities submitted their observations on the opening decision, after having received two extensions of the deadline to comment and after a meeting with the Commission services on 12 March 2012 in the presence of the beneficiary of the measure.

(5)

By letter of 16 April 2012, the Stichting submitted its comments to the Commission on the opening decision. The non-confidential version of these comments was forwarded to the Dutch authorities by letter of 16 May 2012. By letter of 14 June 2012, the Dutch authorities submitted their reaction to the Stichting‘檚 comments.

(6)

The beneficiary of the measures is the partnership Schouten-de Jong Bouwfonds (hereinafter ‘淪JB‘�. This partnership was set up by Schouten & De Jong Projectontwikkeling BV (hereinafter "Schouten de Jong") and Bouwfonds Ontwikkeling BV (hereinafter "Bouwfonds") for the purposes of the contested real estate project and does not have legal personality under Dutch law.

(7)

As members of the SJB partnership, Schouten de Jong and Bouwfonds should also be considered beneficiaries of the measures (4).

(8)

Schouten de Jong, established in Voorburg, the Netherlands, is active in real estate project development in the Netherlands, in particular in the Leidschendam area. Its turnover amounted to EUR 60 million in 2011.

(9)

Bouwfonds, established in Delft, the Netherlands, and a subsidiary of Rabo Vastgoed, is the largest real estate developer in the Netherlands and among the top three largest players on the European real estate market. Bouwfonds is active, in particular, in the Netherlands, Germany and France. It had a turnover of EUR 1,6 billion in 2011.

(10)

The municipality of Leidschendam-Voorburg (hereinafter: ‘渢he Municipality‘� is located in the province of South Holland, close to The Hague, in the Netherlands.

(11)

A public-private partnership in the form of a vennootschap onder firma (hereinafter: the ‘淧PP‘� was set-up by the Municipality and SJB to undertake the ground exploitation phase of the contested real estate project. Each party to the PPP was to bear 50 % of the costs and the risks associated with the ground exploitation phase of the project. The decision-making of the PPP was to be by unanimity. According to the information provided by the Dutch authorities, Schouten de Jong and Bouwfonds are each jointly and severally liable ("hoofdelijk aansprakelijk") for the fulfilment by SJB of its obligations under the PPP agreement (5).

(12)

On 6 April 2004, the Council of the Municipality adopted a Concept Ground Exploitation Masterplan Damcentrum and a Concept Masterplan Damcentrum laying down a framework agreement aimed at revitalising Leidschendam's city centre (hereinafter: the ‘淟eidschendam Centrum Project‘� (6). The Leidschendam Centrum Project concerns an area of approximately 20.7 hectares and consists of demolishing approximately 280 mainly social housing units, renewing public spaces and utilities (sewerage, paving, lightning, etc.) and constructing approximately 600 new housing units ‘�both social housing and free sector housing ‘�as well as approximately 3 000 square metres of commercial (shopping) space, a two-level underground parking garage, and the relocation and rebuilding of a school. The Leidschendam Centrum Project was divided into various sub-projects, one of which is the real estate project concerning the Damplein (hereinafter: the ‘淒amplein Project‘�.

(13)

On the basis of the Leidschendam Centrum Project, the Municipality concluded a co-operation agreement with a number of private project developers, including with SJB, on 9 September 2004 (hereinafter: the ‘�004 Co-operation Agreement‘�. The 2004 Co-operation Agreement stipulates that the private project developers would, for each of the specific sub-parts of the Leidschendam Centrum Project assigned to them, construct and sell, for their own risk and expense, the envisaged real estate.

(14)

According to the 2004 Co-operation Agreement, the construction works would begin once the land had been made ready for construction (see recital (22) below) and the necessary building permits had been obtained. However, as regards the construction of the free sector housing units, the private developers were allowed to postpone construction until 70 % of these units, whether or not in combination with social housing units, in the sub-project area concerned had been pre-sold (Article 7.5 of the 2004 Co-operation Agreement, hereinafter: the ‘�0 % clause‘�. This 70 % clause is commonly found in construction contracts in the Netherlands and seeks to limit the risks for project developers of constructing real estate which might not be sold. The agreement did not, however, provide for any possibility to postpone construction as regards the commercial premises and the underground parking garage.

(15)

According to both the 2004 Co-operation Agreement and a further project agreement concluded on 22 November 2004 (hereinafter: the ‘淪JB Project Agreement‘�, SJB would build a total of 242 housing units, of which 74 were initially planned to be built on the Damplein (7). SJB would also build approximately 2 400 square meters of commercial space on the Damplein and construct the underground parking garage, which apart from a private section (75 parking spaces) also included a public section (225 parking spaces). The commercial premises and the housing units would both be built on top of the underground parking garage.

(16)

The Municipality, as also explicitly emphasised by the Dutch authorities in its submissions, was not involved in the construction phase of the project and bore no risks in relation to the sale of the housing units and commercial premises. Profits from these sales, if any, would accrue directly to the private developers. The construction phase of the project should be distinguished from the so-called ground exploitation phase of the project, where the Municipality was involved through the PPP with SJB and bore 50 % of the risks (see recital 18 below).

(17)

Before construction works in each part of the real estate project could commence, the land had to be acquired, the public infrastructure had to be re-arranged and the land had to be made ready for construction. Since this "ground exploitation phase" of the project was expected to entail high costs (estimated at the time at approximately EUR 30 million) and significant risks, the Municipality decided to set up a PPP with SJB to carry out these works (8). To this end, the Municipality and SJB signed a ground exploitation/PPP agreement on 22 November 2004 (hereinafter: the ‘淕REX‘�.

(18)

In return for its participation in the ground exploitation phase of the project, SJB would obtain a share of the revenues of the PPP and receive the development rights on plots of land previously allocated to the Municipality (9). According to the GREX, both the Municipality and SJB would make a direct financial contribution to the PPP to carry out the ground exploitation works (10). The GREX further provides that the Municipality and SJB would each bear 50 % of the costs and the risks of the ground exploitation phase (Article 4.1 of the GREX) and that the final revenues/losses of the ground exploitation would be divided according to the rules laid down in the 2004 Co-operation Agreement (Article 14.3). This stipulated that at the end of the ground exploitation phase a negative or positive result of up to EUR 1 million would be equally divided between the Municipality and SJB, whereas the portion of a positive result exceeding EUR 1 million would be divided between the Municipality, SJB and the other private parties taking part in the construction phase of the real estate project (Article 10.9 of the 2004 Co-operation Agreement).

(19)

Besides making the land ready for construction, the ground exploitation phase also covered the construction, temporary exploitation and reselling of the public part of the underground parking garage and the building of the school (Article 4 of the GREX). To this end, the PPP agreed with SJB that SJB would construct the underground public garage, which was considered to be intrinsically linked to the private section of the parking garage (article 9 of the GREX), for which SJB would receive a maximum amount of approximately EUR 4,6 million (value on 1 January 2003) from the PPP (Article 6 of the SJB Project Agreement). The construction of the private section of the parking garage would be financed by SJB itself. The PPP intended to sell the entire parking garage to a third party and the revenues from that sale were to flow to the PPP, which would share them between the Municipality and SJB.

(20)

Finally, the PPP would also contribute 50 % of the costs for the construction of a school in another plan area of the Leidschendam Centrum Project. The remaining 50 % would be financed directly by the Municipality (Article 8 of the GREX).

(21)

As follows from recitals 17 to 20 above, the costs of the ground exploitation phase of the project consisted essentially in the costs of the acquisition of the land insofar as it was not already owned by the Municipality, the costs of making the land ready for construction, the costs for the public section of the underground parking garage and 50 % of the construction costs for the school.

(22)

The PPP would generate revenues from the ground exploitation phase, first and foremost, through the sale of the land to private project developers, including SJB, after the PPP had made the land ready for construction. Each project developer was to purchase the part of the land assigned to it to construct housing units and commercial premises. The prices for the land were laid down in Article 10 and Annex 3a of the 2004 Co-operation Agreement. The 2004 Co-operation Agreement explicitly stated that these prices were minimum prices, which could be increased if more than the planned floor space was constructed. These prices were based on an independent expert valuation report, dated 11 March 2003, which considered the prices to be market-conform. Payment of the land price was due at the moment the private developer concerned obtained the necessary building permits and would take place, at the latest, at the moment of the legal transfer of the land (Article 10.5 of the 2004 Co-operation Agreement).

(23)

The price of the land sold by the PPP to SJB for the overall Leidschendam Centrum Project was determined at minimum EUR 18,5 million (value on 1 January 2003). The land in the Damplein area sold by the PPP to SJB was determined at minimum EUR 7,2 million (value on 1 January 2003), yearly indexed with 2,5 % until payment.

(24)

Second, the PPP was to collect additional revenues by charging each private project developer a ground exploitation fee and a quality fee pursuant to Article 10.3 of the 2004 Co-operation Agreement (11). These fees were calculated on the basis of the number of housing units to be built by the private project developer and could be increased or decreased depending on the number of units actually constructed. These fees were due on 1 July 2004 at the latest and needed to be paid in a single instalment for all housing units constructed in the Leidschendam Centrum Project by the private developer concerned.

(25)

As regards SJB, the total ground exploitation fee was determined at approximately EUR 1,1 million and the quality fee at approximately EUR 0,9 million (value on 1 January 2003), indexed yearly by 2,5 % until payment, for all the housing units it planned to build in the Leidschendam centrum area. The final ground exploitation fee and quality fee due would depend on the number of housing units actually built.

(26)

According to the timeline which was set up in March 2004, construction works on the Damplein were initially planned to start in November 2005. However, due to several national court proceedings, the building permits SJB needed to commence construction were delayed and eventually only obtained in November 2008.

(27)

SJB started with the pre-sale of housing units in February 2007, but experienced difficulties selling these and eventually managed to pre-sell only 20 of the 67 planned units. Because of the delays encountered in obtaining the necessary building permits, these pre-sale contracts were annulled in September 2008 so that, when SJB finally obtained the permits to start construction works in November of that year, none of the housing units SJB was required to build on the Damplein had been pre-sold. In the meantime, the financial crisis had started and affected the Dutch real-estate market in particular.

(28)

In this context, SJB informed the Municipality that it would not start any of the construction works, notwithstanding the fact that the 2004 Co-operation Agreement only allowed it to postpone construction of the housing units if less than 70 % of these units had been sold. As explained in recital 14 above, the 70 % clause did not cover the construction of the commercial premises or the underground parking garage.

(29)

In the Autumn of 2008, SJB made a proposal to the PPP to pay EUR 4 million for the land on the Damplein, instead of the EUR 7,2 million (value on 1 January 2003) originally agreed, whereby SJB would start the construction works in April 2009 regardless of whether the housing units had been pre-sold. In return for this decrease in price, SJB was therefore willing to waive its right to invoke the 70 % clause contained in the 2004 Co-operation Agreement. SJB further proposed to contact an investor who would guarantee to buy the unsold housing units. According to the Dutch authorities this resulted in a price lower than that expected from a direct sale to private persons.

(30)

On 18 December 2008, the PPP and SJB decided in principle to the price decrease, but before seeking approval from the Municipality‘檚 Council, the Municipality contacted an independent expert to determine whether the price calculated by SJB was a market-conform price. In its report of 11 February 2009, the expert concluded that EUR 4 million (value on 1 January 2010) could, on the basis of the residual value method, be considered a market-conform price for the land on the Damplein in 2010, taking into account the fact that SJB committed to sell the unsold housing units to an investor and had agreed to lower its initially foreseen profit and risk margin from 5 % to 2 %. The report did not take into account the lowering of the ground exploitation fee and quality fee.

(31)

On the basis of this report and because, according to the Dutch authorities, the Municipality feared further delays and considered it of general interest that the construction phase was started as soon as possible, the Municipality's Council, in its meeting of 10 March 2009, decided that the PPP would agree to lower the price and fees originally agreed in 2004 with SJB for the land located on the Damplein. A proposal of 18 February 2009 from the Municipality, which was sent to the members of its Council, refers to a decrease in price for the land and a decrease in the ground exploitation and quality fees. The proposal further states that this decrease would turn the ground exploitation phase, which was budgeted to be break-even, into a loss-making project. The proposal also requested the Municipality to foresee the necessary provision for 50 % of the losses. The proposal further mentions that due to the financial crisis SJB was not able to obtain the necessary financing for the development of the Damplein.

(32)

The price decrease was formalised in an agreement concluded on 1 March 2010 (hereinafter: the ‘淪upplementary Agreement‘� between the Municipality, the PPP and SJB. This agreement amended the 2004 Co-operation Agreement, the SJB Project Agreement and the Municipality Project Agreement of 22 November 2004. Article 2.1.2, first paragraph, of the Supplementary Agreement provides that, contrary to what was agreed to in the 2004 Co-operation Agreement, the price of the land on the Damplein to be sold to SJB would be EUR 4 million. Article 2.1.2, second paragraph, of the Supplementary Agreement provides that the previously agreed ground exploitation fee and quality fee were no longer due. No reference is made in that second paragraph to the land on the Damplein in particular (12).

(33)

The Supplementary Agreement also states that SJB started the construction works on the Damplein on 7 July 2009 and that it had to undertake those works without interruption. The works should be finished by December 2011. In case of late delivery, SJB was to reimburse part of the decreased price. Delivery of the land would take place at the latest in mid-March 2010 and payment would take place at the latest on the day of delivery.

(34)

Furthermore, on 13 July 2009, the PPP and SJB concluded a new agreement concerning the underground public parking garage (13). According to this agreement, SJB would start the construction works on the public parking garage during the second quarter of 2009 and would complete these within a fixed period of time. The PPP would pay SJB EUR 5,4 million (value on 1 April 2009) for the construction of the public parking garage (14); this amount would be fixed until delivery and would not be indexed.

(35)

On 15 January 2010, SJB and Wooninvest Projecten BV, a company related to one of the project developers who signed the 2004 Co-operation Agreement, signed a purchase/construction agreement (‘�span class="italic">koop/aannemingsovereenkomst