Selling off Italy’s palaces to foreign and private investors is the only way to protect its cultural heritage, says Alberto Saravalle, managing partner at Bonelli Erede Pappalardo
Recently the Sunday Times reported on the sale of the first tranche of Italy’s vast state-owned real estate, including historic palaces (formerly home to government ministries), castles and former convents.
The tone of the article was critical and cast doubts on the possibility of finding buyers, “at a time when foreign investors are shunning Italy as a weak link in the Eurozone”. A treasury official was quoted stating the project was “complicated” since there is little cash in Italy, implying concern that these assets would be bought by foreigners.
In truth, the problem is not the sale but, quite the contrary, the risk that it is being postponed for the upteenth time or avoided altogether.
The first project to sell Italy’s real estate assets, in which I participated, started 20 years ago. Various entities were created for this task, but very little was done. In the meantime the national debt skyrocketed, reaching an unbearable 123 per cent of GDP, and causing in the past few months unsustainable peaks of the government bonds’ yields.
The prices are not an issue, as those who oppose the sale suggest Italy, unlike Spain, did not have a real estate bubble. The assets are appealing and the prices are substantially stable. Also unfounded is the fear that ‘the barbarians are at the gate’. Foreign investors should be welcome when they have funds to purchase and, where necessary, restore the properties.
Once they buy the real estate, they will visit the country more often, spend money and bring employment, thus contributing to Italy’s much-needed growth. Can anybody see anything other than a bonus for Venice in François Pinault purchasing Palazzo Grassi or stars like George Clooney buying an historical villa near Lake Como?
This is a far better solution than leaving these properties abandoned (without funds for upkeep) or using them in an inefficient manner to host public offices that could, more reasonably, be relocated.
The real question is how the sale should be conducted to avoid any favouritism and ensure maximum transparency during the process. It has been suggested that one or more funds be established and managed by at least three highly reputable Italian and/or foreign institutions, selected through a contest.
Assisted by expert lawyers and real estate advisers, they would run the process through transparent auctions and be incentivised to maximise prices.
Having worked for years in matters relating to the recovery of Italian cultural heritage, I am well aware that Italy has an immense patrimony to protect but this has nothing to do with the sale of state-owned real estate. In fact the funds obtained from such sales could be used to pay for the necessary restorations of museums and theatres.
More to the point, at a time of finite resources it would be wiser to promote private interventions in the cultural world through tax incentives and sponsorships. The recent example of the restoration of the Coliseum in Rome, finally made possible thanks to a private sponsorship, should lead the way.