use of real estate leasing in the country’s public sector, opting
for a “leasing in costruendo” formula to finance a military police
station.
among the first local authorities to finance public property with a
leasing solution that benefits from recently introduced legislation
for the purchase of real estate.
The new legislation, which brings the public sector in line with
the private sector, allows local authorities to request lessors
themselves to arrange for the construction of buildings based on
the lessee’s requirements.
Follonica had delayed the construction work for several years,
but was convinced it should go ahead with it after the introduction
of the new laws in 2007.
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The property, which will include barracks and garages, will cost
almost €6 million and will be built on a piece of land owned by the
town.
Lessors had to present their applications to provide the finance
for the project by last month. Lease contracts will last 20 years
following the completion of the construction work.
The choice of leasing, according to a Follonica spokesperson,
derived from the acknowledgement that it was the “easiest way to
finance the police station without having to access a mortgage
loan”, which would have represented a heavier burden for the
administration’s budget.
“The municipal budget only needs to take into account the yearly
instalment and not the overall amount of the investment,” which
happens in the case of a mortgage, the spokesperson added.
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By GlobalDataThe leasing company that wins the tender will have to bear the
expenses of the construction of the property and pay the builder,
and will then receive the first two instalments from the
municipality. In total there will be 40 half-yearly instalments, to
be paid on 30 June and 31 December each year.
At the end of the contract Follonica will be able to purchase
the property with a balloon payment of 1 percent of the total value
of the property. It will take 510 days to construct each
building.
According to the spokesperson, the choice of the leasing
solution was made only after several examinations and meetings with
experts, including one with legal and financial experts from the
renowned Bocconi University in Milan.
