Marco Gaffarena was in negotiations with the owners of Palazzo Verdelin in Valletta last March to buy their property for €3.5 million to sell it to the government at a profit, The Sunday Times of Malta has learnt.
However, following revelations by this newspaper last May over deals involving another building in Old Mint Street, negotiations between Mr Gaffarena and the owners were halted.
Palazzo Verdelin, an imposing 16th century palace in Archbishop Street, directly facing St George’s Square, is currently being used as the Valletta police station. It is three times the size of the building in Old Mint Street.
The government uses the building through an emphyteusis agreement which ends in 2028. By then, the government must vacate the property and return the building to owners.
Speaking to this newspaper, one of the owners of Palazzo Verdelin said Mr Gaffarena had contacted them with an offer, telling them the government would eventually acquire the building.
The owners said Mr Gaffarena had already acquired a third of the palazzo in a deal he had made some 15 years ago with the Coleiro family. However, the rest of the palace is still owned by two families, the Zammits and the Tagliaferros.
I am not going to tell you anything about this
“Last March, Mr Gaffarena had approached us to say the government was interested in buying the property to make sure it continued to serve as the Valletta police station even after the current emphyteusis agreement expires in 2028,” one of the owners said.
“We were obviously very interested when he offered us €3.5 million for a property from which we currently receive less than €100 a year. However, when the stories about the Old Mint Street debacle started to appear, Mr Gaffarena stopped negotiations. We also made it clear we were no longer interested in this deal once we discovered what had happened to the families owning the building in Old Mint Street.”
According to the owners, Mr Gaffarena’s approach started a few weeks after one of the families sent a judicial letter to the Lands Department asking them to return the palace to its owners before the expiry of the emphyteusis agreement.
Contacted by this newspaper, Mr Gaffarena did not want to comment on this deal.
Asked to say how he got to know the government was interested in buying the palace, he said: “I am not going to tell you anything about this,” he said.
Home Affairs Minister Carmelo Abela last week categorically denied that the government intended to buy Palazzo Verdelin.
Mr Gaffarena made the offer to the Palazzo Verdelin owners at the same time he was dealing with the government on the Old Mint Street property.
The Sunday Times of Malta had uncovered that the government had paid €1.65 million for half ownership of a property in Valletta that Mr Gaffarena had bought for a fraction of the price just weeks earlier.
Through this deal, Mr Gaffarena had made a profit of €685,000 in less than two months as well as acquiring parcels of land in exchange measuring more than 10 football pitches in total.
The deal was approved by Parliamentary Secretary Michael Falzon. Dr Falzon admitted he had discussed the deal with Mr Gaffarena but strongly denied any wrongdoing.
Two inquiries on these deals are currently being held by the National Audit Office and the Internal Audit and Investigations Department of the Office of the Prime Minister.