Throw out that rubbish!

“It is a lot of stupid rubbish, which could do much harm to the shopping centre industry. It is riddled with major flaws, starting from contravening the national constitution and EU legislation, through to its negative impact on developers, trade and the entire economy.”

We talked with Piotr Szafarz, legal counsellor to the Polish Council of Shopping Centres, about the Large-Scale Shopping Facilities Act

z Ewa Andrzejewska, ‘Eurobuild Poland’: The time is rapidly approaching when the new act on large scale shopping centres comes into force on September 18th, after being signed into law by President Lech Kaczyński on July 10th. What does the Polish Council of Shopping Centres intend to do in such a state of affairs?

Piotr Szafarz, Polish Council of Shopping Centres (PRCH): – We shall attempt to refer the act to the constitutional tribunal, but to do that a requisite application signed by 50 Parliamentary deputies or 30 senators must be submitted. Such an initiative may also come from the Prime Minister as well as the citizens’ rights spokesman. A theoretical possibility also exists for an employers’ organization to appeal, but it appears the constitutional tribunal treats such a possibility as rather limited in scope. We do hope that at least one of these organizations will submit an application. We shall support it by presenting an amicus curiae, that is a stand taken by an organization which is not a party in the procedure but has knowledge on the given subject and is able to assist the court in taking a decision.

z Those are activities that can be pursued in Poland. What steps can be taken with the EU?

In conjunction with other organizations, PRCH is opening a formal procedure to the European Commission. A plaint will be lodged against the act within the next few weeks. Fortunately, the European Commission requires no formal notification by a special institution for the given issue to be reviewed. In any case we have been informed that we can count on the Commission’s intervention.

z But these measures need time, which is precious – especially for investments currently under way for which building licences have not yet been granted.

True, the Commission sometimes drags its feet and can take as much as 2 or 3 years. The constitutional tribunal’s procedure, in the formal sense, lasts at least one year. We may be able to shorten that time a little by making clear to the tribunal the economic and social consequences as well as the irreversible effects of this new act.

z Do retailers really have anything to fear? Developers are already making it quite clear that they have not the slightest intention of getting out of the business and are stressing that ‘the show must go on’. Which areas will be hurt most by this new legislation”?

Most harm will be done to the development of modern shopping centres, due to the excessive investment risk that this imposes on developers. It also will hurt tenants who have not yet realised how great the danger really is. Many chains can only expand in shopping centres, which means that when this legislation becomes effective any possibility of expansion will disappear. The supply of modern space will become rigid, which means that potential tenants will have to queue up to get into existing centres, rents will soar and – as a consequence – so will the prices of end products. In a word, the circle will be closed.

z Does that mean the owners of existing shopping centres can heave a sigh of relief?

On the contrary. When the act becomes law, notifications of existing shopping areas will have to be submitted, which concerns around 8,000 large-scale centres and the need to have them measured. This will be an awful headache. Each change of tenants very often brings with it a change in the amount of retailing space and this will require permits to be re-issued.

z And what’s going to happen to those companies that have already started work on a project but have not yet been granted a licence?

Should a complete application for a building licence already have been submitted, then only notification is required and the licence will be granted by a simplified procedure.

z Is it possible to get around the act somehow?

One way is to pay a fine of PLN 1 mln – but this is not a one-off penalty, since if the centre continued to operate without a licence, then it could lead to it being fined several times over, until the whole thing is closed down.

z Which other ongoing measures might have a significant outcome for the industry?

I think it is important that the various operators should unite into a single group, but in the widest sense. With this in mind we are in contact with other organizations. Apart from this, we will try to work out a common interpretation of certain regulations to take us through the period in which we shall have to live with the act.