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Guggenheim contract to include cancellation fine
Millions of euros to be paid by whichever side pulls out after signing
Helsingin Sanomat has learned that a clause for a cancellation fine worth millions of euros is to be included in a contract between the City of Helsinki and the Guggenheim Foundation on the construction of a Guggenheim museum in Helsinki.
The fine would be paid by whichever party to the contract pulls out of it once it is signed.
“We are talking about a payment in the millions”, said Helsinki Mayor Jussi Pajunen to Helsingin Sanomat.
Lawyers of the City of Helsinki and the Guggenheim Foundation are ironing out the details of the contract. There is a degree of urgency in the matter, as the letter of intent is to be put forward to the party groups of the City Council already this week.
Two fairly big issues remained open on Monday – the size of the cancellation fine and of the licence fee.
Helsinki has said that the EUR 24 million licence fee for 20 years needs to be covered from outside funds.
The Guggenheim contract is scheduled to come before the City Board on January 30th, and the City Council will debate it on February 15th. The Board of Directors of the Guggenheim Foundation will meet immediately after the City Council meeting to decide on the matter.
If both sides agree on the matter the project will move forward already in February. At that time an architectural competition is to be launched, along with preparations for the next phase.
A separate foundation is to be set up for the proposed Helsinki Guggenheim project.
The contract will be very complicated, especially as a new City Council will be elected in the autumn. If the project moves forward in February, it will keep the new City Council busy for quite a while.
“When the results of the architecture competition come out, the next decision would come before the City Council before the summer of 2013. At that time a decision would be made on the costs and zoning changes required by the museum”, Mayor Pajunen says.
The architecture would also require the approval of representatives of Guggenheim. If there are disagreements, the matter would go into arbitration.
Pajunen says that representatives of Helsinki and the Guggenheim Foundation agreed on the schedule when they met in New York in December.
On Monday Helsingin Sanomat was in contact with Guggenheim’s Deputy Director Eleanor Goldhar, who says that the tight schedule was set by the City of Helsinki, and not Guggenheim.
“Negotiations on the letter of intent are still going on, and it is too early to disclose the conditions”, Goldhar wrote in an e-mail to Helsingin Sanomat.
Goldhar would not say if a cancellation clause was included in the Guggenheim projects in Taiwan, Rio de Janeiro, and Guadalajara, and if the foundation received payment for the projects’ cancellation.
“That is confidential information”, Goldhar says.