The Fortina development in Sliema was approved by the Planning Authority in a vote on Thursday.
The approval, which saw just one board member voting against, will see the former hotel transformed into a 15-storey office block.
The owners are set to rake in millions from the development, to be built on land acquired from the government years ago for just €1.4 million, the Times of Malta is informed.
The former 4,878 square metres of public land was sold by the government on condition that it would only be used for an extension to the then Fortina Hotel.
The government, through the Lands Authority, is still negotiating with the owners on which terms the restriction could be lifted.
According to Lands Authority CEO James Piscopo, “discussions are still ongoing and any agreement would be referred to Parliament to approve”.
Last April, when the Planning Authority gave the green light for the site to be used for luxury apartments, the Lands Authority had said that an agreement with the owners on the release of the restrictions in the original contracts for the transfer of public land was at an advanced stage.
But it seemed that negotiations, now conducted under the guidance of Mr Piscopo following a change at the authority’s helm, were taking longer than envisaged.
Fortina Hotel is to be extended by another five floors
Government sources said the delay was due to differences between the authority and the developers.
“The developers want to compensate the government through the release of some of the land for a public road,” the sources said.
“On the other hand, consultants are advising the Lands Authority to ask for monetary compensation bearing in mind the current market price of the prime land being negotiated.”
Research by Times of Malta shows that a total of 4,878 square metres of public land were acquired by the private developers through three deeds signed with the then Lands Department.
In June 1991, a parcel of land, measuring 465 square metres, was sold for €253,000; another measuring 2,992 metres square was sold for €246,000 in 1996 and a contract for the last, measuring 1,421 square metres, was signed in 2000. The land was sold for €920,000.
The price of the public land was negotiated on condition that the site would only be used for an extension to the Fortina Hotel. The site transferred by the government forms more than half of the development planned by Fortel.
Apart from the block of offices and a retail area, the Fortina Hotel is to be extended by another five floors to reach 23 storeys.
In April, the developers obtained a planning permit to build a residential block of luxury apartments. However, just six days after the permit was out, they changed plans to convert the residential development into offices.
Today’s PA decision approve the change of use from residential to office space.
Fortina owners have already struck an agreement to sell the still-to- be-permitted office development to Bet365 – a major gambling company planning to relocate most of its operations from Gibraltar to Malta after Brexit.
Sources close to Fortel told Times of Malta that the gambling company would be paying tens of millions to acquire the block.
Asked to confirm the deal with Bet365, Edward Zammit Tabona, CEO of Fortel, did not reply.
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