The Taipei City Government announced the breakdown of negotiations with the management of the Taipei New Horizon (臺北文創) complex late on Friday, with daily NT$50,000 (US$1,626) fines to be levied against the firm for contract violations.
The city’s Department of Cultural Affairs said the breakdown came after four rounds of talks had failed to make meaningful progress, with the firm rejecting the city’s timeline for the Fubon Group (富邦集團) and Taiwan Mobile (台灣大哥大) to vacate their office space within the building.
The talks had been initiated in January following controversy over site usage and royalties.
Although the high-rise complex was intended to promote cultural and creative industries, city councilors have alleged that it has in practice served as a corporate headquarters, with the majority of floor space rented out as office space to subsidiaries of the Fubon Group and Taiwan Mobile Co, which together own the development’s contractor.
The Department of Cultural Affairs had demanded that Taiwan Mobile vacate a floor of the building by Friday, also demanding that less than 50 percent of the building’s office space be occupied by Taiwan Mobile and the Fubon Group by August.
The department announced that it would begin fining the firm NT$50,000 a day for violating contract provisions over site usage until the firm corrects the situation. It added that it does not rule out terminating the firm’s contract and buying out the firm’s lease if no improvements are made.
The department estimates that the firm’s current contractual royalties for using city-owned land shortchange the city by NT$3.6 billion to NT$7.2 billon, based on a January land-value appraisal by outside firms.
Taipei Mayor Ko Wen-je (柯文哲) on Friday said the breakdown in negotiations was expected and that there was no need to be anxious, because the city was “not finished yet.”
He added that he would personally oversee the city’s next moves.
Taipei City Councilor Wang Wei-chung (王威中) of the Democratic Progressive Party said the city lost its most important bargaining chip against Taipei New Horizon in December last year when the administration of former Taipei mayor Hau Lung-bin (郝龍斌), of the Chinese Nationalist Party (KMT), granted the registration certificate for the complex’s hotel.
Meanwhile, Taipei New Horizon said in a press release that the city government’s deadline for Taiwan Mobile to vacate the building was too rushed and would seriously harm profit due to the difficulty of finding an alternative tenant.
It added that the city government’s demands had already gone beyond the spirit of its original contract.
It said the city government should consider buying out the firm’s site lease for its full market value if it insisted on pushing its demands.
The Department of Cultural Affairs said that Taipei New Horizon’s registration estimates the building to be worth about NT$6 billion.
The city government has yet to conduct its own appraisal.
Additional reporting by Kuo An-chia
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