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Oops, Marbella Goes Back to 1986

Marbella planning lawsThe story starts with a 2005 investigation into drug-related money laundering codenamed Operación Ballena Blanca  (Operation White Whale).  In fact, the drugs originated in France but the money trail led to Spain, specifically Marbella property.  Subsequent phone taps showed the Marbella Town Hall knew rather a lot about money laundering.  As a result, the police launched a separate investigation into bribery and corruption, this one called Operación Malaya.  Finally, the Marbella planning laws were under the microscope.

Consequently, within a year the town council was dissolved and placed in administration.  In addition, 18,000 properties were classified as illegal.  The reasons? Either built on land not zoned for development or the developer built more than the planning laws allowed. And that was the problem.  These dated from 1986 and the mayor thought them too restrictive.  That mayor was Jesús Gil y Gil, elected in 1991 with a mandate to put Marbella on the international map as a destination of choice for the jet-set.  And clean up corruption.

Licences for everyone

Inevitably, it didn’t turn out well.  More a case of opening the door to the chicken coop and inviting the fox to help himself.  Gil took municipal corruption to a new level and on an industrial scale.  Marbella planning laws?  What Marbella planning laws?  Over the next 15 years building licences fluttered down like confetti at a wedding.  Unfortunately, many of these licences did not conform to the planning regulations valid at the time.  Nevertheless, everyone turned a blind eye; architects, lawyers, planners and agents.  Gil and his town hall officials acted as though the planning regulations had already been revised.

In fact, everyone agreed the 1986 planning regulations needed updating  to reflect the growth of the area.  However, there was disagreement not only at local council level but also at regional government in Seville, on the grounds that the amount of construction planned was excessive.  As a result of this opposition, Gil failed in his repeated attempts to push through new planning laws to relace the 1986 regulations.  Undeterred, Gil went on as before, acting as though new planning regulations actually existed.

Gil falls but nothing changes

Finally, Gil’s reign ended abrutly in 2002.  Multiple corruption and embezzlement charges, some related to his tenure in Marbella, others to financial irregularites connected to other business activities, led to him standing down as Marbella mayor.  He was banned from holding public office for 28 years.

However, in spite of the fall of Gil, nothing changed at the Marbella Town Hall. He had trained his successors well.  As a result, under, first, Julián Muñoz and then Juan Antonio Roca, everything went on as before.  Inevitably, until his death in 2004, everyone assumed that Gil was still pulling the strings.

Of course, that meant compensation  ‘in kind’ being paid for building licences for several more years.  After Operation White Whale and Operation Malaya led to their arrests ‘compensation’ turned out to include racehorses, mansions, a private jet, vintage cars and art works by Picasso, Dali and Miró and much, much more.  Roca, who first arrived in Marbella as an unemployed builder, explained away €200 million in cash by claiming he had won the lottery eighty times during his life!

Prison sentences for everyone

When the court case finally opened in 2010 there were 95 people in the dock.  When it finished in 2013, 53 of the accused were convicted.  the result?  Long jail terms and massive fines.  Assets were seized and subsequently auctioned.  In July 2015, Roca’s 11 year sentence was increased to 17 years although Muñoz’s original sentence of 11 years was reduced on appeal.  His partner, the super-famous Spanish singer, Isabel Pantoja, who claimed she knew nothing about any of it, served a two year sentence for money laundering although she was regularly let out for weekend ‘rests’.

A new beginning

Finally, in 2010 a newly-elected administration oversaw the ratification by the Junta de Andalucía in Seville of the revised Plan General de Ordenación Urbanística (PGOU) which would control what was allowed over the next decade at least.  At the same time, 16,500 of the 18,000 illegal builds received retrospecive approval.  Of the balance some were demolished while others remain in limbo, most notably Banana Beach and Casablanca.  This is because no one could think of a formula to include them, they were just plain illegal and always would be.

We  all thought the problem was over and once the recovery was underway Marbella would move on a better, less corrupt future.  That was the plan, at least until 2015, when the Supreme Court in Madrid sat in judgement on three appeals.  One was from a community of owners and two from constructor. In all three cases the judgement was in favour of the appellants and ordered the annulment of the 2010 PGOU.  At a stroke, the judgement reinstated the 1986 planning laws and made 16,500 properties illegal again.  The reasons given were:

  • The town planners did not have the legal capacity to legalise something that was illegal.
  • The required environmental impact analysis was not done.
  • The required assessment of economic viability was not carried out.
  • The planners did not have the right to alter the designation of consolidated urban land.
  • The system of compensation was illegal.
  • The plan freed owners of illegal properties from any obligations and assigned it to developers and in the opinion of the Court no obligations can be imposed on someone who is not an owner.

When will it end?

The last reason is the one that will worry the 16,500 owners affected most of all as they had been assured by the then mayor, Ángeles Muñoz, that fines would not be imposed on them as they had bought in good faith.  Instead, fines, some of them very substantial and running into €millions, were imposed on the developers involved, at least those that hadn’t already gone bust in the crash.  I imagine they will want their money back but as the town hall has already said that won’t be happening I see a lengthy court case in my crystal ball.

So, there it is, back to where we were ten years ago.  Of course, the overwhelming majority of properties in the municipality are not affected.  The once-again valid 1986 Marbella planning laws were, and remain legal.  But for thousands who bought new-builds in the boom years things are less certain. And that’s also true for developers about to start or already building new projects on plots zoned as development land in the 2010 revision but not under the 1986 one.

However, not everyone is unhappy.  Some developers didn’t like the new plan including Ricardo Arranz, who heads up the National Association of Developers. He is on record as being pleased with the outcome.  Many in the industry felt the Marbella planning laws in the 2010 revision were rushed and poorly thought through but after four year’s wrangling everyone just wanted it to be over.  However, uncertainty is always a bad thing in the marketplace but how soon a resolution will be found is anyone’s guess. Nothing before 2022 is mine.  

 

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