The State Property Fund has reconsidered the decision on privatization of the Culture Palace “Metalurh” in Novomoskovsk
The State Property Fund reconsidered the decision on privatization of the state-owned Culture Palace “Metalurh” in Novomoskovsk and decided to long-term lease it in the interests of the town’s community
For the information, CP “Metalurh” was built at the expense of the Novomoskovsk Pipe Plant in Soviet times, and during the plant privatization in 1995 it was excluded from its property subject to privatization. Since then, the Palace of Culture has been on the balance sheet of PJSC “Interpipe Novomoskovsk Pipe Plant” as "non-statutory" state property.
On March 24, 2020, the Regional Offices of the State Property Fund in Dnipropetrovsk, Zaporizhzhia and Kirovohrad oblasts adopted a decision on CP “Metalurh” privatization by sale at the auction due to the Order № 12 / 01-86-RP. This decision was made in accordance with the principle of priorities choosing the method of state property management, which was not included in the companies authorized capital in the privatization process, but it’s on their balance sheet, compliance with which ensures funds to the state budget.
However, since the privatization decision, the Fund has received numerous appeals from the town’s community representatives, MPs, and the mayor of Novomoskovsk about the risks of change the Palace purpose, which includes the decision on privatization. According to the appeals, CP “Metalurh” is a meeting center for the creative and spiritual needs of the local residents, as well as the single municipal institution that has a professionally equipped stage, an auditorium for 700 seats and premises for creative associations. In their appeals, the town’s community representatives drew attention to the architectural replaning risks of the object, if it is in the interest of the profit maximizing of the new owner. Nevertheless, in the applicants opinion, such course of events will not be in the local community interests.
The State Property Fund has analyzed the Novomoskovsk community appeals and decided to change the investor attracting strategy for the Palace of Culture. Therefore, in order to be able to control the preservation of the purpose of object as a cultural institution, the Fund, as the authorized body to manage this property, decided on the feasibility of long-term leaseof CP “Metalurh” with additional conditions for the tenant investment in modernization, repair and preservation of activity profile, however, without the redemption right.
The decision on CP “Metalurh” privatization was canceled by the Fund's Order № 780 of May 13, 2020
Leonid Antonienko, First Deputy of the Head of the State Property Fund of Ukraine, emphasized on that the future tenant of the Palace of Culture will be determined by an auction through the electronic system “Prozorro.Sales”. He will also have the right to sublease part of the CP “Metalurh” leased premises to provide related services to its visitors. Subleasing will not require additional approvals from officials. The new lease law allows tenants, who have received the lease right at the auction, don't transfer the difference to the budget between lease and sublease payment and use the funds that were maked by this difference at the own discretion. According to the Fund’s opinion, these legislation innovations open up new opportunities to increase the investments profitability, the cost of tenants to leas and repair leased objects, and as a result - increase the demand for state property leasing.
Now consultations with the community representatives, potential tenants and other stakeholders on the future using specifics of CP “Metalurh” and the lowest amount of investment attracting in its development are ongoing.