Helsinki threatens legal action against Helsinki Hall over unpaid ground rents for Helsinki Arena

The City of Helsinki is threatening to terminate the lease agreement for the Helsinki Arena and pursue legal action due to unpaid ground rents. On October 17, a court bailiff delivered a payment demand to Kai Paananen, a board member of Helsinki Hall, the company behind the arena. The company now has one month from that date to settle the overdue ground rent payments along with interest and collection fees. It may also be required to provide acceptable collateral to meet its obligations.

The City of Helsinki has stated its commitment to pursuing the collection of ground rents owed by Helsinki Hall through normal channels. To date, no payments have been received. The total amount demanded by Helsinki exceeds €108,000, with due dates for the overdue rents in July 2024, covering three months of ground rents up until the end of September 2024. The case has not yet reached the court process; however, if payments continue to be outstanding, the City may opt to file a lawsuit.

Previously, Helsinki Arena’s rental payments have been delayed multiple times. For instance, last spring, Helsinki Hall paid its rent over a month late, with a similar situation occurring in September 2023. In both instances, the City managed to collect the owed amounts without legal proceedings or enforcement actions.

The latest deadline for payment set by Helsinki expires on November 17. The annual rent for the arena is currently nearly €410,000, billed in four installments of just over €102,000 each. The arena has been largely vacant for about two and a half years due to the extensive military actions initiated by Russia against Ukraine and subsequent sanctions, which prevented the hall’s operating company from paying for utilities, including the electricity that was cut off in September. The majority of shares in the company are owned by Arena Events, linked to Russian oligarchs.