The new lease agreement for Istanbul Park

Final decisions have been made regarding Istanbul Park in relation to the "eviction dispute" that has been on the agenda in recent weeks. A new lease agreement is being prepared for the track, which is managed by the General Directorate of Foundations. The fate of the track and the surrounding properties will be clarified through a tender covering 117 million dollars.

Following the expiration of the Intercity agreement last year, a new tender process was initiated for the track owned by the General Directorate of Foundations. With the announcement dated February 12, 2024, the new tender conditions were determined and the tender was opened. In addition to the tender price of 117 million 806 thousand 367.89 dollars, the General Directorate of Foundations has set certain conditions.

Along with the renovation of the track and the surrounding properties, the goal is to revitalize the area around the track. Beyond these, the most notable decision concerns Formula 1 races. The new company that will lease Istanbul Park must guarantee that Formula 1 races will be held at the track starting from 2026.

If the races are not held, an amount equal to 25% of the Formula 1 agreement fee for each year will have to be paid to the General Directorate of Foundations. In this case, the absence of races would mean the agreement becomes void.

The new properties include a shopping mall, a Go-Kart track, an adventure park, an automobile museum, an entertainment center (aquarium, artificial forests, etc.), and a small neighborhood containing these. These points, which will be located around the track, are intended to revitalize areas that have remained idle.

The other conditions of the agreement are as follows:

The construction/repair period for the complex planned on the aforementioned plot is 3 (three) years, and the total contract period is 30 (thirty) years, consisting of the 3-year construction period, a 16-year amortization period calculated by an appraisal report, and an additional 11 (eleven) years of profit-making period (with the aim of increasing participation in the tender to ensure competition and reviving the idle Formula-1 track by ensuring it is included in the racing calendar),

The contract period and rent payments shall commence as of the date of site delivery, with a maximum delay of 1 (one) year from the contract date,

$272,000.00 (United States Dollars (USD)) shall be taken as the monthly construction period rent for the first year of the property, and for each subsequent year, the amount found by applying a 1.5% increase to the initial construction period rent determined shall be set as the construction period rent for the following year,

$506,000 (United States Dollars (USD)) shall be taken as the starting rent (Operating Rent) for the 4th year of the property, and from the 5th year until the end of the contract (end of the 30th year), the amount found by applying a 1.5% increase to the initial operating rent determined each year shall be set as the operating period rent for the following year,

However, from the 4th year, which is the start of the operating period, until the end of the contract (end of the 30th year), the amount found by calculating 20% of the turnover obtained from the entire property each month shall be compared with the amount determined by Article 4 of our decision; the higher of these two amounts shall be taken as the operating rent for that month,

The contractor shall guarantee that Formula-1 races will be held at the property, and within 1 (one) month after the contract is signed, the agreement regarding the holding of Formula-1 races at our property shall be reached and the signed protocol shall be notified to the Administration; if this is not done, the contract shall be terminated and the deposited guarantees shall be recorded as revenue for the administration,

The contractor shall undertake that Formula-1 races will begin at the existing Formula-1 track on the property as of 2026, and for every year after this year, including 2026, in which the races cannot be held, an amount equal to 25% of the Formula-1 agreement fee for that year shall be paid to the administration annually as compensation,

To ensure the training of national athletes, the track operation shall be opened for free use for 30 days for events of certain national and international motor sports federations and various sporting activities (a “Proposal Calendar” regarding the calendar of days foreseen for this work shall be submitted to the administration by the contractor every year; the calendar for the 30 days to be used shall be agreed upon),

In order to ensure that the public benefits more and effectively from the planned facility; upon the request of the Administration, the facilities in question shall be opened for free use by the contractor for 30 days per year for festivals, concerts, seminars, and similar events (a “Proposal Calendar” regarding the calendar of days foreseen for this work shall be submitted to the administration by the contractor every year; the calendar for the 30 days to be used shall be agreed upon),

Applying a discount at an agreed-upon rate to General Directorate of Foundations personnel at the businesses within the facility,

In the event of any change in the open or closed area increase foreseen in the valuation or in the functions foreseen in the valuation (in the entire property, its annexes, or any part of it) for the properties currently being evaluated without a project, the rental prices based on the contract shall be re-evaluated in line with the parameter(s) used in determining the rental prices,

The contractor shall be responsible for the entire process of obtaining all opinions, permits, and approvals from relevant institutions for the plan modification required for the construction of the structures in the facility whose valuation was made without a project, and no rights or payments shall be demanded from our Administration due to situations that may arise during these procedures,

After the projects of the structures/areas in the planned facility are finalized, the opinion of the international institutions organizing/supervising the races shall be obtained and submitted to our administration regarding the fact that the planned project does not harm the existence and function of the current Formula-1 track,

Areas that may need to be ceded to the public according to the Zoning Law No. 3194 shall be ceded for the benefit of the public within legal limits,

All permits to be obtained from relevant institutions and organizations for the projects to be prepared for the property in question, which is currently being evaluated without a project, and all necessary work and procedures for these shall belong to the contractor, and no rights or payments shall be demanded from our Administration due to situations that may arise during the approval process,

All necessary measures and permits for security to be taken from the date of site delivery on the parcel (property) shall be obtained by the contractor, and our Administration shall have no responsibility regarding these matters, nor shall any payment be demanded,

If the contractor does not start the work by making all necessary plan modifications for all structures/constructions within the complex foreseen in the valuation, having the implementation projects approved by the relevant institutions and organizations, and obtaining the construction permit within 18 months (excluding additional time and time extensions) from the date of site delivery, the Administration shall terminate the contract, and the rents paid and all guarantees shall be recorded as revenue for the Administration,

At the end of the lease agreement, the contract may be continued provided that the contractor accepts the rental price to be determined by the Administration through a re-valuation with the consent and approval of the contract parties,

None of the structures foreseen in the valuation shall be opened for (partial) use before the construction of all of them is completed,

Those who have previously signed contracts with the General Directorate of Foundations for long-term leasing works such as revenue sharing, construction and repair in return for rent, or restoration and repair in return for rent, and who have not brought the work to a state ready for acceptance fully and completely without being subject to any penalty within the given time in accordance with the procedures and principles specified in the contract and specifications, cannot participate in this tender,

Those who are in the position of an occupier or unauthorized user without being subject to an ongoing contract with the administration for properties belonging to the General Directorate of Foundations and Mazbut Foundations cannot participate in this tender; however, if they waive any lawsuits filed against the Administration regarding the property they occupy before the final application date of the tender and provide a notarized eviction commitment stating that they will cede, donate, and vacate the property they occupy to the Administration within 1 (one) month at the latest, they may participate in the tender,

Provided that the Site Delivery is made after the eviction process is completed, within the scope of the relevant legislation, in addition to the Formula-1 track currently on the property, to have areas/structures built with functions of a shopping mall, adventure park (go-kart, amusement park, climbing track, excursion train, etc.), automobile museum, and entertainment center (aquarium, bird park, zoo, rainforest),

A lease tender in return for construction and repair will be held for a period of 30 years in accordance with the State Tender Law No. 2886 and the provisions of the relevant legislation.

The estimated cost of the work is; 117,806,367.89 USD

The estimated cost refers to the sum of the construction cost and the rent to be paid during the construction period. The tender (contract) price includes the sum of the construction cost and the rent (resulting from the tender) for the construction period.

News Source: 12punto