Harpa too expensive to run?
Harpa Concert Hall and Conference Centre has to pay one third of their operating revenues in property taxes. Photo: Júlíus Sigurjónsson
The Reykjavik District Court has accepted the ruling of the Supervisory Committee on Property Valuation that the real estate value of Harpa is 17 billion ISK (approx.115 million Euros). The Reykjavik concert hall and conference centre had demanded that the ruling should be nul and void.
When the real estate value of the building was announced to Harpa in 2011, the owners of Harpa - The City of Reykjavik and the Icelandic state objected and believed it to be far too high. They asked Pricewaterhouse Coopers and Capacent to make a realistic property valuation of Harpa and they used the 'free cash flow' (FCF) method to determine the value of the property. Their conclusion was that the property value was much lower, at 6,8 billion ISK.
The new ruling in the matter will no doubt come as quite a shock to Harpa who have to pay one third of their operating revenues in property taxes.
Director of Harpa, Halldór Guðmundsson, said to mbl.is this morning that Harpa will be responding to the ruling by the Reykjavik District Court but could not say at the moment in what manner the response would be.
Harpa, designed by Henning Larsen Architects and Batteríið Architects in cooperation with artist Ólafur Elíasson was completed in 2011.
The building was originally part of a redevelopment of the east harbour area and was to be financed by Landsbanki Íslands. Construction was abandoned when the financial crisis took hold until the Government and the City of Reykjavik decided to take over the construction costs for the half-finished building. It was seen as a somewhat bold move in the midst of an economic crisis, but Harpa, since opening, has become a firm fixture for cultural events, conferences and events in the city.
In 2013, the building received the prestigious Mies Van der Rohe award for architecture.
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