In order to pay off debts that have been weighing down the party, the Czech Social Democrats (CSSD) have sold off the Lannova palace across from the Masaryk train station in central Prague to the building’s main tenant: Finep. The residential developer maintains offices and a showroom in the building, where a major reconstruction was undertaken. The price is was reportedly CZK 201 million. CSSD’s spokeswoman told Novinky.cz that the party expects to be able to pay off the vast majority of its debts during August. Finep has been renting the building since 2014 through a subsidiary (Pensum) on the basis of a 25 year lease. The company participated in the building’s CZK 70 million renovation, which took place in 2015.
CSSD disappeared from the political scene after the last elections because it received less than the 5% necessary to have seats in parliament. That result also meant it lost CZK 22 million in annual funding from the state budget, making it even more difficult to cover interest payments of over CZK 1 million per month. “Long-term, it wasn’t sustainable to continue financing the party with an bank overdraft where we owed more than CZK 200 million,” the party’s chairman Michal Šmarda told the daily Pravo. He said there’d been other potential buyers, but Finep’s long-term lease made the investment unattractive to them. Investors continue to look for over-leveraged owners of property in the hope to picking up buildings, but there have been relatively few examples so far.
