Tallinn Mayor Peeter Raudsepp (Isamaa) asked the city’s Environment and Public Utilities Department to review whether it would be possible to reach a settlement in the dispute with Viru Center and still jointly rebuild the sidewalk.
Raudsepp said at a City Government press conference on Tuesday that the city cannot act in a way that backs out of agreements previously signed with private companies and that such agreements must be honored.
“I asked the Environment and Public Utilities Department to take another look and see whether it might be possible to find a solution that satisfies all parties,” Raudsepp said.
Agreement signed already last year
Last November, the large Viru Keskus shopping mall in downtown Tallinn and the city’s Environment and Municipal Services Department signed an official cooperation agreement under which both parties would contribute to upgrading the pedestrian and cycling path along Estonia Boulevard next to Viru Keskus.
Since three-quarters of the section — from the Kaubamaja intersection to the edge of Viru Keskus by Tammsaare Park — belongs to the city and one quarter to Viru Keskus, the agreement stipulated that costs would be split in the same proportion.
However, at a meeting held last week, Deputy Mayor Kristjan Järvan (Isamaa) told Viru Keskus representatives that because the project is not a priority for the current city government, the reconstruction would be put on hold. The city, he said, is not willing to finance its agreed-upon share.
Järvan told ERR that the decision to abandon the project followed budget cuts in the municipal sector.
“I explained to Viru Keskus that since we have cut the Environment and Municipal Services Department’s budget by several tens of millions, our priorities are, first, threats to human life; second, threats to property; third, maintaining existing infrastructure to required standards — and only after that, aesthetic improvements. This particular project falls under aesthetics. The pavement there is not worn out or broken,” Järvan said.
He added that, under the original agreement, plans included changing the pavement surface and adding greenery along the stretch.
For Viru Keskus, the reversal came as a major surprise.
“For Viru Keskus, the city’s decision is deeply regrettable and, frankly, shocking. We do not share the deputy mayor’s assessment that this is merely an aesthetic project. The area along Estonia Boulevard next to Viru Keskus is not just a ‘sidewalk with pavement in acceptable condition,’ but an embarrassingly outdated, post-Soviet concrete wasteland by the standards of central Tallinn, where it is unsafe for both pedestrians and cyclists,” said Viru Keskus CEO Enn Parel.
“The issue is not only whether the asphalt or paving stones are still technically usable, but the quality of the urban space, safety, greenery, ease of movement, and the overall dignity of downtown Tallinn,” he added.
Parel pointed out that, in cooperation with the city, Laikmaa Street next to Viru Keskus was similarly transformed into a modern, people-friendly space, and the same goal applied to the redevelopment of the area along Estonia Boulevard.
Center has already spent €50,000
As noted, most of the section belongs to the city and a smaller part to Viru Keskus, and financing for the reconstruction was agreed accordingly. The city’s initial estimate put the cost at €350,000, Järvan said, but since unexpected issues almost always emerge beneath old pavement—especially in the city center—the city assumed early on that the final sum could be somewhat higher.
While the city deliberated and then reversed course, Viru Keskus proceeded with the project under the agreement, investing about €50,000 in design work and preparations. Now, the center’s CEO says, that money appears to have been wasted.
“For this reason, the city’s current desire to back out of the agreement is extremely disappointing for us. Cooperation between the city and businesses can only work if agreements are honored. Tallinn speaks of being business-friendly, involving the private sector, and encouraging investment, but in this case the city is acting in exactly the opposite way: it does not value the private sector’s willingness to invest in the urban environment, does not acknowledge work already done and investments already made, and is trying to simply wipe a previous agreement off the table,” Parel said.
Järvan said he fully understands the frustration felt by Viru Keskus representatives.
“But the issue is not a single object; it’s a matter of principle. Otherwise the question arises: why wouldn’t we fund the next similar project? If we do one in one place, why not another? Yes, it’s unfortunate that they’ve already done the design work and spent time and money,” the deputy mayor said.
“Still, the urban space there functions today, and there is greenery in place. At the same time, I understand Viru Keskus’s anger that the city has changed its decisions,” he added.
Center considers legal options
According to Järvan, last week’s meeting left him with the impression that “this matter is not yet over,” precisely because Viru Keskus has already invested money in the project. “For example, the question of whether they would be willing to increase their own contribution — there was even an impression that they might be,” he noted.
Parel said the city cannot expect Viru Keskus to shoulder most of the costs, and that the city government itself should make a greater effort to find a reasonable solution. However, he said, that was not the impression he got from the meeting with Järvan.
“We went into the meeting with the deputy mayor with an open mind and proposed various solutions. We have been ready to discuss postponing the city’s contribution to future budget periods and increasing Viru Keskus’s own share. Essentially, we have offered that a private company invest even on city-owned land so that Tallinn’s residents and visitors would have a better, safer, and more modern public space.
What followed was, to put it mildly, strange. The deputy mayor’s message to us was essentially that if Viru Center paid for almost the entire development itself, then perhaps the city would consider adding a small portion,” Parel said.
If the proposed split moves toward Viru Center paying 90 percent and the city perhaps 10 percent, that can no longer be called a partnership, he added.
Parel stressed that Viru Center is willing to cooperate with the city, but that something is fundamentally wrong if the city backs out of an agreement and expects a private company to effectively finance the development of public urban space on city-owned land on its own.
“We expect the city to honor its commitments or reach a reasonable, mutually acceptable solution with Viru Keskus,” he said. Viru Keskus is currently continuing to assess its options, including from a legal perspective, Parel added.
“Viru Keskus’s goal is not to buy itself a prettier front yard, but to help fix up one of the most visible and heavily used stretches in downtown Tallinn,” he said.
Järvan points to the previous city government
Järvan said the promises to Viru Keskus were made by the previous city government, of which he himself was also a member — though not in charge of municipal services at the time. When the agreement was ultimately signed, the Environment and Municipal Services Department reported to then-Mayor Jevgeni Ossinovski (Social Democratic Party).
Ossinovski told ERR that when the project was brought to him last year, after the departure of then–Deputy Mayor for Municipal Services Pärtel-Peeter Pere and the Reform Party from the city government, the Environment and Municipal Services Department asked him how to proceed. Ossinovski said he had a few questions about the project but ultimately decided to move forward.
“Yes, it was an expensive project, but my position was that since this had already been agreed with Viru Center, the city could not behave dishonorably. That’s why the project moved ahead. I thought it was sensible and welcome that cooperation with the private sector could deliver a new level of urban quality,” he said.
Ossinovski called the current city government’s withdrawal “outrageous” and said Viru Keskus’s anger was justified, especially given the €50,000 already spent. “The city itself asked for that money to be invested there—that was the agreement,” he said.
This story was updated to add comments from Tallinn Mayor Peeter Raudsepp.
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