On Wednesday 19 July, the European Parliament’s Committee on Budgets (BUDG) approved by a comfortable majority (26 votes in favour, 11 against and 3 abstentions) the signing of an emphyteutic lease for a new building in Strasbourg, the Osmose building, currently being acquired by the French authorities. The procedure stipulates that the parliamentary committee’s decision does not have to be put to a vote in plenary session.
This is an emphyteutic lease for 99 years, with the option to terminate the contract after the 18th year. The proposed annual rent is €700,000, which will be indexed every 10 years.
The costs of maintaining, servicing, operating and cleaning the building are estimated at €514,000 per year, energy consumption at €246,000 and security and surveillance costs at €450,000. In addition, for the years 2023 and 2024, there will be costs for fitting out the premises (€10.4 million), furniture (€1.9 million), technological equipment (€970,000) and personal equipment (€809,000).
“The overall cost of this rent would therefore be €1,919,000 per year from 2025, without taking into account indexation every 10 years”, explained rapporteur Olivier Chastel (Renew Europe, Belgian).
Emphyteutic lease
The Committee on Budgets had been asked by the President of the European Parliament, Roberta Metsola, to sign the lease for this building. The French authorities plan to complete their purchase once the Committee on Budgets has approved the property deal.
This has now been done, much to the dismay of the S&D group, which had asked, just before the vote, for a legal opinion to be provided beforehand so that it could vote in full knowledge of the facts.
“I don’t understand how, from a legal point of view, it is possible to vote to lease something from someone who only plans to buy it in the future”, said Latvian Nils Ušakovs.
Under this contract, Parliament may at any time exercise a purchase option at the price paid by the French administration for the acquisition of this building, less the cumulative amount of rent already paid.
Mr Chastel announced the purchase price of €53.5 million by the French government, which had been known since the previous evening. He questioned the proposal to sign an emphyteutic lease rather than acquire the property outright. “If Parliament leased the building for 99 years, as written in the contract, it would cost a minimum of €69.3 million (99 times the €700,000 annual rent), plus indexation every 10 years. If you only take 1% indexation per year, whereas last year we had indexation of almost 10%, that costs an extra €40 million”, he said. He added that, as part of an emphyteutic lease, the costs of renovating the building would also have to be covered.
Questions about the need to acquire
Rasmus Andresen (Greens/EFA, German) deplored the fact that the contract was only available in French. More generally, he questioned the need for the European Parliament to have a new building.
“I don’t think the Osmose project is essential. There is no useful office space. What we need are meeting rooms, rooms for trilogues, and Osmose can’t help us with that”.
Nils Ušakovs wondered how citizens would react: “Is this really necessary in times of crisis?”
Echoing Mr Chastel’s comments, Joachim Kuhs (ID, German) felt that “although this rental rate may seem advantageous, we have to take into account all the additional costs that will be added later on”.
On behalf of the EPP, Germany’s Monika Hohlmeier said that Parliament needed buildings that were energy-efficient (built in 2021, equipped with the latest technology, connected to the district heating network and over 70% powered by renewable energy). In her view, the French government is also offering a favourable rental fee. “It’s true that the strategy is more often to buy, but this rent is so low compared to the market price that it’s no big deal to wait 1, 2 or 10 years”, she points out. (Original version in French by Pauline Denys)