Negotiations are to be held with Fubon Financial Holding Co chairman Daniel Tsai (蔡明忠) over the Taipei New Horizon complex, Taipei Mayor Ko Wen-je (柯文哲) said yesterday amid a dispute over one floor in the 13-story building.
A standoff between the city and Taipei New Horizon — whose management firm is owned by Fubon — was sparked after the firm rejected the city’s demands that the Fubon subsidiary Taiwan Mobile Co vacate a floor by the end of last month.
Ko dismissed Taipei New Horizon’s strong response and said he was confident that Tsai would be more willing to make concessions.
Taipei Department of Cultural Affairs Commission Ni Chung-hwa (倪重華) denied that negotiations had “broken down,” saying that the talks are a “drawn-out process.”
He said he could not believe Taipei New Horizon’s initial response was that the city should buy out its lease on the property, which was constructed on city-owned land under a build-operate-transfer (BOT) contract.
“Is clearing out one floor all that serious?” Ni said. “If they did not agree with the timeline we could have held consultations — I do not understand why they decided to play hardball.”
There are limits to what businesses can be defined as belonging to the “cultural and creative industries,” he said.
The company’s contract with the city requires that 65 percent of the building be occupied by cultural or creative companies and groups.
The city has said that Taiwan Mobile fails to meet the definition of a “cultural and creative industry.”
None of the main businesses listed by Taipei New Horizon in its tax returns meet the Ministry of Economic Affairs’ definition of “cultural and creative industries,” the Department of Cultural Affairs said, adding that the firm had also been unable to produce evidence that its offices were used for that purpose.
Taiwan Mobile and other Fubon subsidiaries occupy more than 60 percent of the complex.
Meanwhile, Taipei New Horizon said it sought to terminate the BOT contract as a last resort to resolve the row with the city government.
The company said its investment on the complex totaled NT$13.87 billion (US$450.7 million), including construction costs and royalty payments to the city.
The Department of Cultural Affairs recently released assessment said Taipei New Horizon should pay a royalty fee of between NT$3.7 billion and NT$7.3 billion.
Under the contract, Taipei New Horizon is required to pay 0.5 percent of its total leasing revenue as royalty to the city, so the city’s request to raise the royalty fee and change the terms of calculation have violated the agreement, the company said.
The city government said it wants to use the total revenue of the commercial space as the basis for calculating the royalty fee instead of leasing revenue.
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