While awaiting a resolution between the Government and the lessee of the Sveti Stefan – Miločer hotel complex, Adriatic Properties, regarding whether the Sveti Stefan city hotel and Vila Miločer will be reopened after four years, the Municipality of Budva has blocked the resort due to unpaid property taxes.
The local public revenue administration has placed a lien on the property of Sveti Stefan Hotels, the company managing the city hotel and Vila Miločer, as it failed to pay property taxes for the previous year, amounting to 82,000 euros.
The lien, totaling 82,304.34 euros, has been registered in favor of the Municipality of Budva. This decision secures the tax claim by the Budva Local Public Revenue Administration, as stated in the property records, which “Vijesti” had access to.
As a result, Sveti Stefan Hotels, a joint-stock company where the government of Montenegro holds a majority stake, as well as the state-owned company HTP Miločer, which manages part of the Miločer Park, where Adriatic Properties is constructing the new Kraljičina Plaža Hotel and a dependency with apartments for the market, have been placed on the Municipality of Budva’s list of tax debtors.
Both companies are facing significant financial challenges. The lessee of the hotel complex, a company owned by Greek businessman Petros Statis, has not paid rent for two years, ever since an arbitration procedure was initiated in London. The lessee claims that the government and the involved companies breached their contractual obligations and is demanding 100 million euros in compensation.
Adriatic Properties should pay a quarterly fee of 87,000 euros to HTP Miločer, while the quarterly rent of 380,000 euros for the Sveti Stefan Hotels company, owner of the Sveti Stefan city hotel and Vila Miločer, remains unpaid.
Residents of Sveti Stefan held a protest outside the Budva Municipality building recently, demanding that they be included in negotiations between the Government and the lessee regarding the reopening of the city hotel. They insisted that all details of any potential agreement be presented to them.
Reportedly, the two parties may reach an agreement for “Sveti Stefan” to open this summer, with the arbitration procedure being put on hold for six months, during which time they aim to resolve their issues.
For the fourth consecutive summer, Adriatic Properties has kept the Sveti Stefan city hotel and Vila Miločer closed while also halting the construction of the new Kraljičina Plaža hotel since the arbitration procedure began. Without a resolution on the functioning of Kraljičina Plaža and the path between the beach and the spa center in Miločer Park, the hotel operator Aman refused to reopen the Sveti Stefan city hotel, citing security and privacy concerns for guests.
In early February, the world’s greatest tennis player, Novak Djokovic, attempted to assist in unlocking the Sveti Stefan city hotel, which has been closed since 2021. After meeting with Prime Minister Milojko Spajić, he stated that this was the main reason for his visit to Montenegro, emphasizing that he would use his name and influence to help resolve the issue.
The global ambassador for Aman explained that they had conducted “initial talks” and were gathering information, emphasizing that he was working for the “overall interest” of Montenegro and hoped that a solution would be reached soon.
The popular “Sveti Stefan” is celebrating its 65th anniversary this summer since it was transformed from a small fishing village into a fashionable resort in the 1950s, following a decision by the communist authorities.
The closure of “Sveti Stefan” in 2021 was partly due to the use of Kraljičina Plaža, which had been closed to the public for decades and reserved exclusively for hotel guests and political elites. The city hotel closed in 2021 after local residents broke the fence on Kraljičina Beach, and the Public Enterprise for Managing the Sea Property ordered its removal, making the paths in Miločer Park available for public use.
After the incident in 2021, Adriatic Properties demanded guarantees from the state that such events would not recur but did not receive them. Subsequently, the government initiated arbitration proceedings in London, claiming that the agreement had been violated, and Adriatic Properties countered by demanding 100 million euros in damages.
The Commercial Court upheld the London Arbitration Court’s decision, ordering Sveti Stefan Hotels and the government to pay Adriatic Properties 522,000 British pounds (approximately 620,000 euros) in arbitration-related costs.
Montenegro’s Property Legal Interests Protector Bojana Ćirović has appealed the decision of the Commercial Court to the Appellate Court.
Sveti Stefan Hotels and the state-owned company HTP Miločer, which manages part of Miločer Park, where Adriatic Properties is building the new Kraljičina Plaža Hotel and the apartment dependency, are both facing severe financial difficulties. The lessee, Adriatic Properties, has not paid rent for two years, ever since the arbitration process began.
