In a 2005 investigation into drug-related money laundering that became known as Operación Ballena Blanca (Operation White Whale) Spanish police were given permission to tap suspects’ phones and when recordings indicated that the Marbella Town Hall knew a bit too much about money laundering as well a separate investigation into bribery and corruption was launched, this one called Operación Malaya. The Marbella planning laws were under the microscope. Within a year the town council had been dissolved and placed in administration and 18,000 properties were classified as illegal, in that they had either been built on land that was not zoned for development or the developer had built more than permitted under the Marbella planning laws in force at the time. And herein lay the problem; these dated from 1986 and were seen as way too restrictive by the new mayor, 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.
Well, that didn’t turn out well, something akin to 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. Over the next 15 years building licences fluttered down like confetti at a wedding. The fact that many of these licences did not conform to the planning regulations valid at the time was ignored by architects, lawyers, planners and agents. Several submissions to revise the 1986 rules, which everyone agreed were overdue for updating to reflect the growth of the area, were turned down, both at local council level and at the regional government in Seville on the grounds that the amount of construction planned was excessive. Never mind, Gil and his successors Julián Muñoz and then Juan Antonio Roca went on as before, providing they were compensated ‘in kind’ which, after they were finally arrested, 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 had 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. When the court case finally opened in 2010 there were 95 people in the dock and when it finished in 2013 convictions plus massive fines were handed down to 53 of the accused. In July this year Roca’s 11 year sentence was increased to 17 years and Muñoz’s original sentence of 11 years has just been reduced on appeal. His partner, the super-famous Spanish singer, Isabel Pantoja, who claimed she knew nothing about any of it, is serving a two year sentence for money laundering although she is regularly let out for weekend ‘rests’.
Then 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 and, at the same time, retrospectively legalising 16,500 of the 18,000 illegal builds. Of the balance some were demolished while others remained in limbo, most notably Banana Beach and Casablanca, 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 yesterday when the Supreme Court in Madrid sat in judgement on three appeals, one from a community of owners and two from constructors; in all three cases the judgement was in favour of the appellants and ordered the annulment of the 2010 PGOU, thereby reinstating the 1986 plan and, at a stroke, making 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.
So, there it is, back to where we were six years ago. The Marbella Town Hall held a press conference today, calling for calm. Of course, the overwhelming majority of properties in the municipality are not affected, particularly those in the most prime areas of the region which, under the once-again valid 1986 laws were, and remain legal. But for thousands who bought new-builds in the boom things are less certain, as indeed they are for those 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.
Not everyone is unhappy. Some developers didn’t like the new plan including Ricardo Arranz, who heads up the National Association of Developers and said today he is very pleased with the outcome. Many in the industry felt the 2010 plan was rushed and poorly thought through but after four year’s wrangling everyone just wanted it to be over. What is certain, however, is that uncertainty is always a bad thing in the marketplace but how soon a resolution will be found is anyone’s guess.