Orco claims neighbors of its development on ul. Złota want to extort money from it Roberto Galea/WBJ

According to developer Orco, seven residents of a building neighboring its Złota 44 investment in Warsaw have demanded money in return for the withdrawal of legal proceedings against the development.

The residents demanded Orco “buy out all seven 1960s apartments, of about 50 sqm area each, at ul. Emili Plater 47, for some zł.20,000 per sqm, which gives a total of zł.7 million,” Orco said in a statement. A lump-sum zł.3.5 million cash payout was offered as an alternative, the company claims.

“You can judge for yourself if this is extortion. Our financial involvement was [decided upon] two years ago. We do not consider any new commitments,” Orco sales and marketing director Alicja Kościeszka told Lokale Immobilia.

Although this has not happened to Orco in the past, she commented, it is not an isolated incident in the market. Developers frequently find themselves in similar situations. “We’ve opened a Pandora’s box … We are the first to bring it to the public,” Ms Kościeszka said.

But Anna Borkowska, the lawyer representing the seven neighbors, challenges Orco’s claims of extortion. Neither she nor her clients have ever explicitly named a price for the potential purchase of the apartments, she says, but it is entirely within their legal right to do so, especially when the developer proposes such negotiations.

“In a June meeting to which I was invited by Orco, we discussed prices of comparable apartments. Among others, I presented the price of space in one ul. Emili Plater address, which was zł.20,000,” Ms Borkowska said.

“I was asked if such a price would satisfy my clients. I said it probably would – that is a very good price for Warsaw,” she said.

Ms Borkowska said that a settlement involving the purchase of the apartments could not be considered illegal, since such a solution is outlined in the spacial development legislation.

She also said that, should her clients’ apartments be purchased, they would cease to be participants in the case challenging the decision to allow construction.

Orco intends to direct the matter to the Prosecutor’s Office.