Lido di Riva’s €50M Deal for Baltera Pavilions and Public-Private Management

With a fifty billion operation, Lido di Riva spa has purchased the two exhibition pavilions at Baltera, which are now owned by the company controlled by the municipality, and has leased them to Palacongressi srl, implementing the municipal council’s directive to separate ownership (public) from management (public-private partnership).

The operation was explained yesterday afternoon to the council group leaders by the negotiators, who discussed the deal that has been ongoing for nearly 18 months.

Alongside Mayor Malossini and assessors Mosaner and Marino, the presidents of Lido, Mauro Malfer, and of Palacongressi, Gianni Zontini, explained the operation, delegating the most technical parts of the presentation to financial experts Massimo Degara and Diego Nardini.

In summary: Baltera has three pavilions, A, the small one behind the two main ones; B, the “historical” pavilion, the first to be completed; and C, recently operational (where the Gs Riva would like to play).

Pavilion A is not involved in this operation: it was and remains leased to Palacongressi srl for 700 million lire annually.

Details of the pavilions

The B pavilion was initially valued at 21.6 billion lire and was leased to Palacongressi srl for 2.2 billion lire per year for eight years.

Ownership belonged to Fineco, a company that had itself acquired it from Rosmini Immobiliare.

Lido renegotiated the lease, deducting the already paid installments and extending the contract duration to 15 years. Each year, it will pay about 1.5 billion lire.

The C pavilion, the new one, was purchased for 24.15 billion lire from a company of Immobiliare Rosmini (plus VAT of approximately 5 billion lire).

Funding sources

Where did Lido di Riva get the money? 3 billion lire come from the municipality; 5 billion in cash from Tecnofin, as share payments; 10 billion from Tecnofin as a bond loan, on which for the first five years — that is, until 2005 — Lido will only pay interest: after that, it will have to start repaying the principal.

The remaining — about twenty billion lire — comes from banks, although it’s worth noting that in June 2001, the famous 15 billion lire in non-repayable contributions from the province will arrive (reserved until the land’s zoning is changed under the new urban plan).

Property management and future projects

The two properties are rented to Palacongressi srl, which will pay 2.8 billion lire for 2000 and 2001, 2.5 billion lire for the following two years, and then exactly 2 billion lire until 2006.

By 2006, when it will need to start repaying the installments of the 10 billion loan from Tecnofin, Lido spa will have to seek and find other financing methods both to meet existing commitments and to invest in the rest of the project (roads and parking for the exhibition area).

Dellai and Benedetti have repeatedly recognized the provincial interest in the Riva trade fair center: good words must be followed by concrete actions and additional investments in the coming years.