City council decides to launch sales procedure for city centre properties E 3 and E 4

Yesterday, the city council commissioned the city administration to put the two attractive development sites in Chemnitz city centre, Quartier E3 - "Carrée am Tietz" and Quartier E4 - "Neue Johannisvorstadt", out to tender for sale and structural development at the end of April 2016. An investor selection process is to be carried out for this purpose and an external contractor is to be engaged to provide expert support for the selection process.

In June 2015, the appraisal process for the urban development of the city centre in the area around Bahnhofstrasse and Brückenstrasse was concluded. First prize was awarded to the consortium led by lohrer.hochrein landschaftsarchitekten und stadtplaner gmbh from Munich/Magdeburg. In its unanimous decision, the jury concluded that the winning design made clearly positive contributions to the further development of Chemnitz city centre in all construction areas. The particularly high proportion of housing, which contributes significantly to the development of urbanity in the city centre, should be emphasised.

The two new neighbourhoods E3 and E4 are to be built along Bahnhofstrasse. Attractive inner-city residential neighbourhoods can be developed in the vicinity of neighbourhood-forming squares with a view of the landmark buildings (St. John's Church, Tietz and smac).

The brief for the expert appraisal process already emphasised that the creation of a strong spatial edge along Bahnhofstrasse between Tietz and the new Technical Town Hall would be a key driver for the further structural development of the city centre. It is therefore an objective to prioritise the preparation and promotion of structural development in these two areas.

Last September, the Planning, Building and Environment Committee passed the resolution to draw up the development plan for the "Neue Johannisvorstadt" in order to accompany the construction development in terms of planning law. The parallel process for the 41st amendment to the land use plan was started in November.

With yesterday's resolution, the city council launched the public, non-formal tenders for the two neighbourhoods E3 and E4. A two-stage investor selection process will be carried out to reach a decision. Due to the complexity of the task, external support will be contracted to provide technical support.

The two neighbourhoods E3 and E4 have an area of around 25,000 m², which is larger than the sites of Galeria Kaufhof and Galerie Roter Turm. The size of the neighbourhoods means that the broadest possible group of interested parties must be approached for successful marketing. The express aim is to address regional and supra-regional interested parties in particular, in addition to the local players known to the city. Addressing a broad target group promotes healthy competition, which in turn, in conjunction with the two-stage investor selection process, ensures that the city receives financially attractive purchase price offers that are also of high architectural and urban development quality. The fact that the time is extremely favourable for "new" investors - also due to the current low interest rate environment - is conducive to this.

Selection process and timeline

The investor selection process offers the city as the property owner a high degree of transparency and is also comprehensible for the participants (prospective buyers). The decision is based on careful documentation of the bids submitted and the bid responses. Starting with the information on the result of the investor's first architectural design, the technical support continues until the first bids are submitted. Once the best and economically "strongest" offers have been selected, the purchase agreements are negotiated in a "final round" in order to contractually bind the construction project objectives in terms of type of construction, investment amount and realisation period. The administration will select an investor/buyer for each construction site according to the equally weighted criteria of purchase price, utilisation concept including investment period and volume as well as construction and architectural concept, taking into account the handling of the winning design by lohrer.hochrein landschaftsarchitekten und stadtplaner gmbh, finalise the purchase negotiations subject to a city council resolution and then obtain a sales resolution for the respective buyer.

The external partner to be involved in the process must have expertise in property management and legal knowledge as well as in assessing and advising on utilisation and location concepts derived from the specific requirements of urban development. In order to select a suitable partner, a market sounding procedure will be carried out at short notice. Financing will be provided from the proceeds of the sale of the properties.

The invitation to tender for the sale of the E3 and E4 neighbourhoods is to be published in the relevant media at the end of April in order to attract potential investors. The submission of initial indicative offers is scheduled for the end of July. This will be followed by the review, examination and assessment of the initial offers. Councillors from the specialist committees will be involved in this process. As a result, a maximum of six interested parties will be identified for the second selection round. The submission of a bid is planned by the end of September, which should also include a description of the financing of the projects. These bids will also be scrutinised and compared in cooperation with city councillors from the committees. Final negotiations with the investors are planned by the end of October. The selection of the final investors and thus clarity for the development concept should be finalised in November. It is intended that the city council will make a final decision on the sale before the end of the year. Before the actual construction work can begin, excavations must be carried out on the site in question by the State Office for Archaeology. These archaeological excavations are expected to continue throughout next year. The first building construction work on the properties is then expected to begin in 2018.