Outlet Village would bring Kotka tens of millions
The almost half-a-billion euro designer outlet village project that is afoot in Kotka, Kotka Old Port, has inched forward.
The Kotka City Council unanimously approved the land use changes as well as the lease and other agreements required for the development project in early July, effectively guaranteeing that the project can proceed to the construction stage next autumn.
The City of Kotka has entered into an agreement with Kotkan Kantasataman Kehitys, a development company domiciled in Kotka and founded by Cameron Sawyer, an American real estate developer based in Russia, and Gerald Parkes, a real estate investor based in the United Kingdom.
The other contract partner is another company founded by Sawyer and Parkes, Kotkan Kantasataman Outlet. Both of the companies have an equity capital of 2,500 euros and are according to Sawyer backed by holding companies.
The City of Kotka has agreed to lease the plot to Kotkan Kantasataman Kehitys.
Sawyer declined on Tuesday to shed light on both the owners of the holding companies and the financial backers of the development project, revealing only that the latter are from Western Europe. The tenants of the entertainment complex have similarly yet to be disclosed.
“What I can say is that the project is moving forward extremely well in every respect,” he told Helsingin Sanomat.
The agreements approved by the Kotka City Council stipulate that the first part of the outlet village, which is to house some 200 shops offering last season's fashion at reduced prices, must be completed by the first half of 2017. The first hotel, in turn, is scheduled to open its doors to visitors in December 2018. The final part – the second and third parts of the outlet village, a second hotel, cinema, fitness facilities and residential buildings – will be completed step-by-step by 2025.
Altogether, the entertainment complex is projected to bring 700 full-time jobs to the waterfront of the unemployment-ridden town.
If the project is not realised, the land use agreement will be voided. However, no financial penalties will be imposed because the businessmen have already invested millions of euros in drawing up the plans, says Markku Hannonen, the director of city planning at Kotka.
The costs incurred by the city will be an estimated ten million euros. Kotka has calculated, however, that the outlet village will start turning a profit already before its full completion. “We'll pay slightly in the early years, but over 12 years the net income will amount to 20 million euros. It's a very profitable project,” Hannonen highlights.
It has been called into question whether the 55,000 residents of Kotka will be enough to fill the vast aisles of the entertainment complex. Both Sawyer and Kotka emphasise that the outlet village will not life off of the local population but will also appeal to residents of the capital region and international cruise passengers.
Sawyer also points out that customers tend to spend more per visit at outlet centres than regular shopping centres.
Source: Helsinki Times