RIGA - The Riga City Council has decided to lease a land plot to construction company Merks for the much-ballyhooed hockey arena needed for the 2006 World Ice Hockey Champion-ship.
The council made its decision upon receiving a document certifying that Multihalle, the entity previously chosen for the ice hall construction, refused its right to rent that particular piece of land.
Meanwhile, the Ice Hockey Federation appointed Merks as the official builder.
The company is prepared to build the hall under terms previously approved by the council, including the agreement to pay a 3 million lat (4.5 million euro) fine if it fails to complete the project by the Feb. 1, 2006 deadline.
Merks CEO Ivars Geidans told The Baltic News Service that the firm was satisfied with the city's terms for construction.
Merks estimates that total construction costs could amount to 30 million euros. The company itself will finance the construction at the initial stage, as one-quarter of the costs could be covered by bank loans.
The decision provides that Merks has rental rights over the property until May 2052 and can extend the contract to 2101. Plots of land next to the arena will also be sold to Merks.
However, if the builders fail to acquire these plots, the city will be forced to buy the arena for its actual price.
The council also plans to invest 2 million lats in the construction of streets and infrastructures next to the ice-hall.
The Riga City Council previously chose Latvijas Buvnieku Strategiska Partneriba (LBSP), an entity formed by Latvia's leading construction companies, to build the ice hall. However, in the end the city disliked proposals and requirements by LBSP for the project's implementation. Multihalle, the city's original choice, failed to secure financing for the project.
The International Ice Hockey Federation gave Latvia until July 1 to prove they were ready for construction.
