By 2025, 13 million euros will be invested in the Mediteran hotel in Ulcinj, it is stated in the Agreement on the regulation of relations between the government and the buyer of this property, Bećović Mangement Group of the American businessman from Ulcinj Isa Bećović.
In addition to the amount being lower than initially announced, the buyer is not obliged to provide a bank guarantee. Thus, the practice of simplifying Montenegro's tourism potential continues.
This is a continuation of the long-awaited story of the old Mediteran hotel in an extremely attractive location above Mala Plaza in the cozy town of Ulcinj. The hotel overlooks the Old Town — a medieval fortified town and the historical core of the modern city of Ulcinj. Surrounded by a massive fortress wall, the Old Town stretches on a high rocky cape washed on three sides by the Adriatic Sea. In the eastern part of the city there is the Kalaja castle, as well as the Balšić Tower.
The history of the purchase of the Mediteran hotel
An international tender for the sale of the hotel was announced in 2004 by the hotel and tourism company Ulcinjska rivijera, which was then in bankruptcy. In accordance with this procedure, in April 2005 a contract was signed with Bećović's management company, which was amended in 2006 with two annexes.
According to available information, Bećović paid 940,000 euros for Mediteran on time. He acquired ownership rights to 17,702 square meters of land with 11 buildings belonging to the hotel.
However, practically everything remained in that state until 2017, when renovations were carried out and the hotel received a three-star category. The reason is the delay in adopting the project documentation, which came into force only in March 2018.
However, the previous government decided in May last year to terminate the contract with Bećović's company, but this did not officially happen. Thus, the new documents state that the current government and the buyer of Mediteran agree that “since the signing of the Agreement until today, social circumstances have changed significantly, which has partly affected the fact that neither party was able to fulfill its contractual obligations.” So the situation has practically returned to the beginning.
The current state of affairs of the owner of the Mediteran hotel and the government
Then Deputy Prime Minister Dritan Abazović “took matters into his own hands and agreed to continue working with Bećović this summer”.
As noted, after their meeting on July 27, a principled agreement was reached that the reconstruction and construction of a new part of the Mediteran hotel would begin after the end of the summer tourist season.
“Bećović informed Abazović about planned investments in the amount of 15 to 20 million euros and said that Bećović Management Group strives for the Mediteran hotel to reach the four-plus star standard (4+)”, said the Deputy Prime Minister. Adding that Abazović received assurances from Bećović that within three years an investment of more than 15 million euros will be realized in Ulcinj.
Thus, on September 7, the buyer sent the government an official letter of intent, in which he presented a plan for future investments. According to him, Bećović's company will invest three million euros from April 30, 2022 until the end of 2022, and then in 2023 it will invest another five million euros, as announced for the period in 2024 and the first four months of 2025. The final investment dynamics will be known after the completion of the main project, which the buyer of Mediteran is obliged to submit by the end of April next year.
“As an integral part of the investment and dynamic plan, the buyer hereby undertakes to provide evidence of securing the fulfillment of obligations,” says the government document, but it also states that the investor is exempt from providing a bank guarantee, which was defined by the original contract.
However, in order to somehow ensure that something concrete will happen with the Mediteran hotel after 16 years, the government decided to send inspectors who will prepare an annual report on the situation on site, and the management company Bećović will be obliged to submit a semi-annual report on the completed works.
In the event of a delay in implementation, the investor has six months to correct the irregularities, when a new inspection awaits him. Failure to comply with this requirement may lead to termination of the contract. In that case, the property returns to Ulcinjska rivijera, and Bećović's company compensates for the damage in connection with the exemption from the obligation to provide a guarantee.