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State Aid

The City of Reykjavík's lease of Gufunes did not entail state aid

26.4.2017

PR(17)14

EN | IS 
The rental agreement between the City of Reykjavík and Íslenska Gámafélagið for the Gufunes area in Reykjavík was concluded on market terms.

Íslenska Gámafélagið did not receive an economic advantage from the rental agreements made with the City and therefore no state aid was involved,” says Sven Erik Svedman, president of the EFTA Surveillance Authority (ESA) as ESA closes an investigation today.

Reykjavik

ESA opened an investigation in 2015 after receiving a complaint that Íslenska Gámafélagið had received unlawful state aid through its lease of land and buildings in Gufunes at rates below market price. The City had bought the property in 2002, and in 2005 concluded a lease agreement with Íslenska Gámafélagið without a tender. Íslenska Gámafélagið took on an obligation to lease, clean up and supervise the area, and accepted short termination clauses. The lease agreement was extended three times. In May 2016, the City terminated the rental agreement and sold the area to a film production company.

In determining that state aid is not involved, ESA assessed whether a private operator, under normal market conditions, would have accepted the same terms as the City did when renting out the property.

ESA has found that the agreement was concluded on market terms. ESA received information about a similar industrial property owned by the City that was advertised and rented out following a tender process for a lower price than Gufunes. Further, an independent valuation of the 2005 agreement with Íslenska Gámafélagið found that the monthly fee was higher than the market rental price.

A non-confidential version of the decision will shortly be published on ESA's website and in the Official Journal of the European Union.

For further information, please contact:

Ms. Anne Vestbakke

Head of Communications
tel. +32 2 286 18 66
mob. +32 490 57 63 53




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