Shops in every city are a goose that lays golden eggs. Municipal premises leased for this purpose constitute an important item in income, and therefore in the budget. Can shops be sold to their tenants, who are earning increasingly more money from customers? Yes: substantial financial resources would flow into the budget, enough for a year or two of a “prosperous life” for the town on the Bóbr. What next? Well—somehow it will work out, as the nobility used to say in Mickiewicz’s “Pan Tadeusz”.
Councillors are responsible for the city’s fate, not merely for lining the pockets of the so-called middle class (that is: merchants, trade intermediaries and all sorts of schemers). It is therefore no surprise that, with the votes of the SLD clubs, the divided Freedom Union, divided independent councillors and the Community of Catholic Families, they rejected a motion for the total privatisation of shops operated by... the Freedom Union. The common-sense option therefore prevailed over collegial party particularism. But this also became the spark for a peculiar local “civil war”, under various banners. Its first casualty was the Chairman of the Municipal Council, Mr Władysław Landberg, a man of “consensus” who had managed to lead a team of 32 councillors and guide the city’s affairs harmoniously and without conflict for more than two years. The councillors who voted against the utopian concept were named and pilloried in a weekly publication claiming to seek “government of souls”; I will not name it, because why provide it with covert advertising?
I am opposed to the total privatisation of shops, a position in which I was reinforced, while serving as a member of the City Board, by President Józef Król. However, to avoid being accused of subjective judgment, I will quote—in full—the argumentation of the independently minded journalist of Gazeta Jeleniogórska (formerly Gazeta Robotnicza), Józef Wiklik (article dated 25 June 1996):
“In the photograph: Bolesławiec market square. It is over the shops on the ground floors of these tenement houses that the fiercest battle is being fought. And it is hard to be surprised, because this is enormous property, which can be valued differently from a trader’s perspective and from that of an average resident. I support privatisation to the broadest possible extent, above all in trade. I also support stable revenues for the city budget. And that is why, like the Bolesławiec City Board, I believe that we should not sell commercial premises right now, because it is not the best solution,” Bolesławiec President Józef Król told us.
The municipal council, meeting today for its next session, will have to settle the matter, because five Freedom Union councillors have submitted a draft resolution concerning the sale of municipal commercial premises.
The sale of shops in municipal buildings—which is mainly what is at issue—has been, or remains, a source of controversy in various cities, and each local government has tried to resolve it differently. Zgorzelec probably went furthest: it sold all the significant shops to their tenants at appraisers’ valuations, which will cause further problems for the local budget in the near future. Appraisers’ valuations are generally lower than auction prices, and, in addition, few buyers decide to pay the amount in a single instalment—which would at least provide a decisive cash injection—but instead spread the payment over many instalments. As a result, rental income immediately decreases, while no substantial funds for investment appear. Merchants, who build a strong interest lobby in every city, are pleased with this model because it resolves their professional problems, but what do others say? “Ordinary people, the so-called silent majority, have no representation in local government, so they say nothing—where could they?” we were told in Bolesławiec.
“I do not want to hold back privatisation,” President Józef Król argues. “However, I believe it can be accelerated even in premises that remain municipal property for the time being. Municipal ownership of premises does not obstruct private enterprise. It is untrue that merchants refrain from modernisation and renovations because they ‘do not feel at home’. Their agreements provide full guarantees of use of the shops. What is more, they also contain a provision allowing them to add their adult children to the agreements. This means that there are already legal grounds for creating stable, multigenerational family businesses. Sudden, widespread sales could, however, undermine the city’s current and long-term interests. Income from rents for commercial premises amounts to approximately 18 billion old złoty in the annual budget. Here, auction rates are two or even five times higher than appraisers’ valuations, and it is according to such valuations that we would be selling the shops. That is the first, visible measure of the losses. The second is the issue of maintaining the building in which the commercial outlets are located. If all the residential premises above a shop had already been sold to their occupants, then selling the shop as well would make deep sense, because it would create a community of owners that would resolve matters of maintenance, renovations and so on itself. But there are no such situations in Bolesławiec, and it may, for example, become necessary to replace the ceiling above a private shop or the floor in a flat that remains municipal property. Who would bear the financial consequences resulting from taking the shop out of use? The city budget. How great those consequences would be is difficult to estimate today. And there could be many such situations.
(...) No one denies that private ownership is currently proving more efficient, but no one has a formula for systematically replenishing the municipal treasury with its own revenues in any way other than rents. Everyone also has their own experience. For our part, we point to the possible consequences of Zgorzelec’s decision to sell, because they are symptomatic: the shops were sold, there was no money for renovating municipal properties, so it was decided to... replace the director of MZGM, because someone had to be found guilty. The truth is that the money from the sale of the premises, even if it did flow into the budget bit by bit, was used for purposes other than renovating flats. The proceeds were not taken over by MZGM, but by the local government, which has its own hierarchy of priorities. (...)
Bolesławiec councillors chose the common-sense solution. However, this is not the end of the problem.