The project will be discussed on Oct. 5 or 11, according to council spokesperson Anneli Berends.
The project developed in the city government proposes selling the square to the highest bidder at auction at a starting price of 63 million kroons ($3.48 million). The goal of the sale is to stimulate the reconstruction of the square in the framework of the city's development general strategy, it said in the government's statement.
"The project will be discussed in early October, and if the council approves the project, the auction will be announced in October," said Jaanus Nurmoja, spokesperson for the city government. "The issue is rather important and will become a hot topic in the council, and debates are unavoidable."
One of the companies interested in buying the square, SRV Kinnisvara Ltd., owns the Viru hotel and shopping center on the edge of the square. SRV has shown an interest in buying the square since last year, according to board member Indrek Toome.
"We worked out our own plan of the square's future development, and it coincides with the project made by the city government," said Toome.
SRV's project would expand the Viru hotel and the shopping center, and new parking spaces would also be added.
Toome confirmed the price would probably be much higher than the stated 63 million kroons minimum bid. "Even if we buy the square at the starting price, we would spend about 140 million kroons more to build the structures we want."
According to Toome, there is substantial work to do at the square, so several companies may combine efforts.
But one central question remains to be discussed: Should the city sell the square or lease it? Real estate experts say it would be more profitable if the city sold it.
Heiki Bergson, director of the real estate company Kinnisvarakeskus, said there is no point for the city to lease the square. because the interest of bidders would significantly decrease.
"And as to the potential buyers, most of the major companies that might buy the square belong to foreign capital," he added.
In January 2000, the city government originally planned to sell the square without an auction. But the Reform Party opposed the mayor's idea, saying that any municipal-owned real estate should be sold at an open auction according to a coalition agreement it signed along with the Moderates and the Pro Patria Union as well.
The City Council members' views on turning the central square into non-municipal property are still unclear. Matti Tarum, chairman of Pro Patria's City Council faction, said his colleagues had not yet worked out a strong position on selling the square. Nevertheless, Tarum said he thinks the city government's plan will be approved.
The new owner of the square will have to meet special requirements set by the city government, one of which is to build a bus terminal. If the City Council approves the project, the municipality of Tallinn will specify other conditions to the buyer. In any case, the city government said it will prevent selling the square to buyers whose intentions aren't known.
"To qualify as owner of the square, a company must also present the schedule of investments in it and the project of rebuilding parts of the streets connected to the square," said Udo Klopets, head of property sales department of the Tallinn city government.