2003/227/EC: Commission Decision of 2 August 2002 on various measures and the State aid invested by Spain in "Terra Mítica SA", a theme park near Benidorm (Alicante) (notified under document number C(2002) 2980) (Text with EEA relevance)
Date: 2002-08-02
Institutions: European Commission
Subjects: Spain, State aid, control of State aid, leisure park

8.4.2003

EN

Official Journal of the European Union

L 91/23

COMMISSION DECISION

of 2 August 2002

on various measures and the State aid invested by Spain in (cid:145)Terra M(cid:237)tica SA(cid:146), a theme park near
Benidorm (Alicante)

(notified under document number C(2002) 2980)

(Only the Spanish text is authentic)

(Text with EEA relevance)

(2003/227/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European
Community, and in particular to the first paragraph of Article
88(2),

Having regard to Council Regulation (EC) No 659/1999 of 22
March 1999 laying down detailed rules for the application of
Article 93 of the EC Treaty (1), and in particular Article 7
thereof,

Having regard to the decision of 20 June 2001 (2), by which
the Commission initiated the procedure provided for in Article
88(2) of the EC Treaty in relation to aid C 42/01 (ex NN
14/01),

Having called on the parties concerned to put forward their
comments, in accordance with the above Article, and having
regard to those comments,

Whereas:

PROCEDURE

(1)

(2)

(3)

the

European Commission

By letter of 25 August 1997, registered on 28 August,
the European Federation of Amusement and Leisure
Parks (hereinafter (cid:145)the complainant(cid:146)) lodged a complaint
with
the
construction in Benidorm (Alicante, Spain) of a theme
park which is allegedly receiving considerable State aid,
in particular from the Valencia regional administration
(Generalitat Valenciana), contrary to the provisions of the
EC Treaty on State aid.

concerning

letter was

sent
That
between 6 February 1998 and 2 May 2000, which
contain a number of allegations.

followed by 18 other

letters

the Spanish authorities seven
The Commission sent
requests for information between 15 September 1997

(4)

(5)

(6)

(7)

(8)

(9)

and 23 December 1998, seeking clarification of
the
complainant’s allegations. It also wrote four times to the
complainant between 19 January 1998 and 23 March
2000.

The Spanish authorities
replied in six letters,
between 15 December 1997 and 10 March 1999.

sent

The Commission also received a letter from the Valencia
regional administration dated 2 March 1999 and a letter
from the park in question dated 27 October 1999.

It also had several meetings with the complainant, the
Spanish
regional
administration.

authorities

Valencia

and

the

On 20 June 2001 the Commission decided to initiate
the procedure provided for in Article 88(2) of
the
Treaty with regard to certain issues
raised by the
complainant. As regards the complainant’s remaining
allegations, the Commission concluded that there was
no State aid.

The Commission’s decision to initiate the procedure
the Treaty was
provided for
published in the Official
the European
of
Communities (3). The Commission called on the parties
concerned to put forward their comments.

in Article 88(2) of
Journal

a meeting with

The Spanish authorities put forward their observations
by letter of 3 August 2001, registered on 7 August
2001. After
the Commission’s
departments which took place on 14 September 2001,
the Spanish authorities added to their observations by
registered on 20
letters of 16 November 2001,
November 2001, 2 May 2002, registered on 2 May
2002, and 10 June 2002, registered on 13 June 2002.

(1) OJ L 83, 27.3.1999, p. 1.
(2) OJ C 300, 26.10.2001, p. 2.

(3) OJ C 300, 26.10.2001, p. 2.

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Official Journal of the European Union

8.4.2003

(10)

The European Federation of Amusement and Leisure
forward its comments by letter of 21
Parks put
November 2001, registered on 22 November 2001.

(11)

The Commission forwarded these comments to the
Spanish authorities by letter of 6 December 2001.

(12)

The Spanish authorities forwarded their observations on
these comments by letter of 17 January 2002, registered
on 22 January 2002.

DESCRIPTION

(13)

region. As no private

The Valencian regional authorities had for a long time
expressed the wish for a major theme park to be set up
in their
initiatives were
forthcoming at the outset, the regional administration
set up a public company ((cid:145)Parque TemÆtico de Alicante
SA(cid:146)), which took the first steps towards setting up a
park. It was this company which acquired the land and
carried out
the preliminary work. Then a private
company ((cid:145)Terra M(cid:237)tica SA(cid:146)) was set up, some 15 % of
whose capital is held by Parque TemÆtico de Alicante
SA. The remaining shareholders are all private (chiefly
banks in the region, but also several legal and natural
persons) (4). When Terra M(cid:237)tica was set up and later,
when it was agreed to inject
further capital, Parque
TemÆtico de Alicante transferred a package of assets to
the new company in exchange for shares in it. The
assets consist on the one hand of the land where the
park is situated (5) and other tangible and intangible
assets, such as the Terra M(cid:237)tica trademark and, on the
other, of expenditure on measures carried out by the
the new
public company prior to the setting-up of
private company with a view to the construction of the
park.

The Commission’s decision of 20 June 2001

(14)

In its decision of 20 June 2001 the Commission
examined all the complainant’s allegations.

(15)

some of

took the view that
the

these allegations,
It
concerning
regional
that
administration (6) had used the form of a public limited
company and that land had been purchased at a low
cost (7), costs associated with the park borne by Parque

the Valencia

fact

(4) The major ones are: Caja de Ahorros del MediterrÆneo (15 %),
Bancaja (10 %), Caja Rural de Valencia (5,827 %), Ediciones Calpe
SA (5 %), Mondirber SA (5 %), Lladr(cid:243) Comercial SA (5 %), Cr(cid:243)nica
M(cid:237)tica Valenciana (5 %), ATEVAL (5 %) and AUMAR (5 %).

(5) In practice, only a relatively small part of the land (where the park
will be situated,
i.e. some 10 % of the land) was transferred to
Terra M(cid:237)tica SA. All the remaining land still belongs to the public
company which plans to build hotels, golf courses, etc.

(6) See recital 49 of the decision.
(7) See recital 50 of the decision.

TemÆtico de Alicante SA (8), the failure to respect the
private investor principle (9), a syndicated loan to Terra
M(cid:237)tica SA (10), an additional contribution of ESP 1 000
million (11),
and training
staff (12),
the direct regional aid (13) and exemption
from municipal taxes on behalf of (cid:145)Iberdrola(cid:146) (14) are
unfounded.

recruiting

costs of

the

(16) However,

it

raised some doubtful points,

thereby
initiating the procedure provided for in Article 88(2) of
the EC Treaty with regard to the following issues:

(a)

the funding of the infrastructure required for the
park’s operation (15);

(b) the value of the assets, particularly the land and the
(cid:145)Terra M(cid:237)tica(cid:146) brand, allotted to Terra M(cid:237)tica SA by
Parque TemÆtico de Alicante SA (16);

(c)

the conditions governing the shareholder’s loan of
ESP 8 000 million granted to Terra M(cid:237)tica SA (17);

(d) the rebate of municipal

taxes granted by the

Municipality of Benidorm (18);

(e)

the possible contribution of ESP 6 000 million to
Terra M(cid:237)tica SA by the Valencian Tourist Board
(Agencia Valenciana de Turismo) (19).

As regards points (a), (b), (c) and (e), the Commission’s
doubts focus on whether or not Terra M(cid:237)tica SA enjoys
a special advantage and thus on the issue of whether or
not State aid has been granted. As far as point (d) is
concerned,
the
measure concerned constituted State aid which could be
viewed as investment aid, and that it must be examined
to determine whether it was compatible with the single
market,
of
account
cumulation with the various other measures in question.

the Commission took the view that

possibility

taking

into

the

(8) See recital 52 of the decision.
(9) See recital 53 of the decision.
(10) See recital 57 of the decision.
(11) See recital 59 of the decision.
(12) See recital 61 of the decision.
(13) See recital 62 of the decision.
(14) See recital 63 of the decision.
(15) See recital 51 in fine of the decision.
(16) See recital 56 in fine of the decision.
(17) See recital 58 in fine of the decision.
(18) See recital 60 in fine of the decision.
(19) See recital 64 in fine of the decision.

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Official Journal of the European Union

L 91/25

Observations by the parties concerned

The funding of the infrastructure required for the park’s
operation

(17)

(18)

(19)

The European Federation of Amusement and Leisure
Parks was the only organisation to put
forward its
observations by the deadline set by the Commission,
which it did by letter of 21 November 2001.
In its
the Commission
comments,
it merely welcomed
the
decision of 20 June 2001 and underlined
fair
the principle of
importance of
competition within the Community. In addition to this,
it
the
to
Commission before the decision of 20 June 2001.

correspondence

abiding by

referred

sent

the

to

Observations by the Spanish authorities

Introduction

the legitimacy of

the Spanish authorities doubt,

first and
In general,
foremost,
the part played by the
European Federation of Amusement and Leisure Parks
in this case. They say hardly anything is known about
the organisation, the interests that it actually represents,
the number and identity of its members, its interest in
bringing the case before the Commission, and whether
it was serving as a front for the real complainant, who
had remained anonymous. The Spanish authorities were
also surprised by the volume of correspondence sent by
the complainant to the Commission, and believed that
the Commission had dealt with the case in a way which
served the opaque interests of the complainant, when it
was supposed to avoid encouraging the wrongful use of
the complaints procedure. Finally, they wondered about
the nature of the doubts raised by the Commission,
the latter had told both them and the
given that
it did not
complainant on several occasions
consider this to be a case of State aid.

that

No impact on intra-Community trade

the

take

view that

Spanish authorities

the
The
Commission decision fails to provide sufficient evidence
of an impact on intra-Community trade. Nor does it
define the geographical market or the product market.
In their opinion Terra M(cid:237)tica should be viewed as a
regional park, not as a destination park, firstly because
it
is not part of a chain of parks under unified
management (as in the case of EuroDisney) and does
not make use of standard themes derived from the
exploitation of assets on other markets, like Universal or
Warner, and secondly because people living within a
radius of between 150 km and 200 km of the park
for approximately 90 % of primary demand,
account
while the greater part of
the remaining 10 % is
accounted for by people living in Spain.

(20) According to the Spanish authorities, the complainant’s
argument to the effect that all the public works carried
out and the infrastructure provided by Parque TemÆtico
de Alicante SA in implementation of the (cid:145)Land use and
infrastructure plan(cid:146) constitute State aid to the park
because no such work would have been carried out if
there had been no park does not hold water. This
argument, they say, amounts to calling into question the
power of public authorities to carry out land planning.
It is clear, in the view of the Spanish authorities, that as
soon as the decision is taken to build a theme park and
to establish areas given over to hotels and recreation,
the administration must also make provision for the
impact of more people and traffic, a rise in population,
the environmental impact, and so on, which necessarily
means putting in place the infrastructure required for
land-planning purposes.

(21)

The Spanish authorities deny that the work carried out
by Parque TemÆtico de Alicante SA to implement the
Land use and infrastructure plan benefited only Terra
the work concerned was in the
M(cid:237)tica SA. Rather,
public interest and had to do with land planning. They
have also pointed out that the park accounts for only
10 % of
the land covered by the Land use and
infrastructure plan.

(22)

The Spanish authorities have provided a list and a
detailed description of the work carried out by Parque
TemÆtico de Alicante SA in implementation of the Land
use and infrastructure plan. The work performed can be
summarised as follows:

(a) environmental work: the Spanish authorities explain
that the whole area covered by the Land use and
infrastructure plan was originally badly degraded,
the main reasons for this being a number of forest
fires and the presence of an unofficial rubbish tip.
The work carried out was therefore aimed mainly at
reforesting and rehabilitating the area, preparing the
land, dredging river beds to avoid flooding, and so
on;

(b) roadworks: the Spanish authorities point out that in
view of the increasing number of tourists entering
the region around Benidorm, it was already planned
to take action to prevent the region’s roads from
becoming saturated. Moreover,
the population of
the part of Benidorm nearest to the area covered by
the Land use and infrastructure plan and the nearby
settlements of La Nuc(cid:237)a and Finestrat had risen, and
the existing road network was unable to absorb the
increase in traffic. The various public adminis-
in
concerned reconditioned the
trations

roads

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Official Journal of the European Union

8.4.2003

question,
in line with their responsibilities: CV-70
was widened, a new toll station was set up on the
A7, which provides a second way into Benidorm,
and a number of new roads were built (V(cid:237)a Parque,
Avenida del Murtal, Bulevar Central) between
Benidorm and the region covered by the Land use
and infrastructure plan;

market economy. In other words, it cannot be argued
that Parque TemÆtico de Alicante SA intended to reduce
the value of the assets transferred to Terra M(cid:237)tica SA.

(c) electricity,

is

and

restructure

gas, water

all users. As

telecommunications
infrastructure: as far as the electricity supply is
concerned, all Parque TemÆtico de Alicante SA has
in
done
the
supply networks
cooperation with the
the
firm that manages
(cid:145)Red ElØctrica Espaæola SA(cid:146), and
high-tension grid,
the firm that owns the grids, (cid:145)Iberdrola(cid:146). These grids
link together the substations of neighbouring towns
and villages. Consequently, activities in this area
supply
affect
infrastructure, no pipes have been laid;
the only
things that have been installed (cid:151) outside the park
itself (cid:151) are two gas tanks, a vaporiser and a boiler.
As for the water supply, a network has been set up
in the areas at risk of forest fires, and pipes for the
water supply and to drain off waste water have been
laid.
In addition to a drinking-water plant, a
purification plant has also been built to purify waste
water for irrigation. Finally, the telecommunications
infrastructure was already in place prior to the Land
use and infrastructure plan.

regards

gas

the

(23)

(24)

The Spanish authorities take the view that all the work
outlined above served to create infrastructure for the
population as a whole, and that it was not planned for
the sole benefit of the park. They have forwarded a
description of all the work carried out and funded by
Terra M(cid:237)tica SA itself, along with copies of the relevant
contracts. This work includes all connections to general
infrastructure (cid:151) road links to the park, the upgrading
of land, the electricity grid, and networks for the supply
of gas and drinking water, networks for putting out
fires, communications networks, and networks to drain
off waste water. Finally, Terra M(cid:237)tica SA also bears the
circulating
costs of
through these networks and the connection charges.

consumption of

the products

Value of the assets (particularly the land and the Terra M(cid:237)tica
trademark) transferred to Terra M(cid:237)tica SA by Parque TemÆtico
de Alicante SA

note

Spanish
decision

the
authorities
the
Firstly,
Commission
the
does
expropriation procedure used by Parque TemÆtico de
Alicante SA to acquire the land in question. Moreover,
the decision states that Parque TemÆtico de Alicante SA
did not infringe the principle of the private investor in a

that
question

not

(25)

In any case,
reaffirm their
the Spanish authorities
statement that the two firms which evaluated the assets
are independent experts. Moreover, they point out that
(cid:145)Tasaciones del Mediterraneo(cid:146)
the
complainant had suggested, was not an independent
firm, was selected not by Terra M(cid:237)tica SA, but by the
person responsible at the Registry of Commerce.

(Tabimed), which,

(26)

The Spanish authorities also point out that both valuers
carried out
their valuations within the same legal
framework, the purpose of which is to ensure that the
is accurately assessed, so that all parties
share capital
the
concerned can be sure of
non-cash assets transferred to the firm.

the actual value of

(27) As regards the value of the land, the Spanish authorities
begin by explaining that the land where the park is
situated was acquired by Parque TemÆtico de Alicante
SA through expropriation, and that some pieces of land
were purchased directly from the owners (20).
In all
cases, the land concerned was rough land which could
not be used for building, without any crops. The
average price paid was ESP 460/m2.

(28)

a

second

Subsequently, when these assets were transferred to
Terra M(cid:237)tica SA, it commissioned TINSA to carry out a
valuation. Since the increase in capital resulting from
the transfer had to be recorded in the Register of
the Register
the person responsible for
Commerce,
commissioned
from another
valuation
expert (21)
in accordance with the Spanish Law on
limited liability companies. Whilst the complainant had
criticised the method used by Tabimed (the initial value
method), and not other, more appropriate methods such
as the capitalisation of anticipated revenue, TINSA used
the
finally chosen to
determine the value of the land. The difference between
the estimates of the value of the land given in the two
experts’ reports was minimal (22). At all events,
the
value added to the price initially paid for the land,
resulting in the price as measured at the time of the
transfer to Terra M(cid:237)tica SA accrued solely to Parque
TemÆtico de Alicante SA (a public company).

latter method, which was

(20) In these cases, the price paid was higher because the landowners

gave up the reversionary interest.

(21) Tabimed.
(22) ESP 1300/m2 for TINSA and ESP 1062/m2 for Tabimed.

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Official Journal of the European Union

L 91/27

this

(29) As regards the value of the Terra M(cid:237)tica trademark, the
Spanish authorities point out that when Tabimed valued
it had not yet been finally registered.
the trademark,
Terra M(cid:237)tica therefore had no exclusive right
to the
trademark which could be upheld against third parties.
expressed
reason, Tabimed, which had
For
reservations about including the trademark as an asset,
finally agreed to do so, and valued it at the purchase
price. It would have been contrary to sound judgment
to assign a value to the trademark solely on the basis of
its anticipated success, since that depends on how much
money is invested in promoting and publicising it.
These expenses have been very considerable in the
present case, which may account for the rise in the
value of the trademark since the purchase. All the costs
involved have been defrayed by Terra M(cid:237)tica SA.

The conditions under which the shareholder’s loan was
granted to Terra M(cid:237)tica SA by Parque TemÆtico de Alicante
SA

be

reference

the Commission’s

(33) According to the Spanish authorities, a first parameter
rate. The
could
Commission notice on the method for setting reference
and discount rates (24) states that this rate is equal to
the five-year interbank swap rate plus 0,75 base points.
According to the Spanish authorities, the shareholder’s
loan was contracted under market conditions as far as
this criterion is concerned.

(34) A second parameter could be to examine the difference
with respect to the basic rate from the point of view of
the return to the lender. The MIBOR rate in December
1998 was approximately 3,20 %. A margin of [(cid:133)]* in
addition to this means 47 % of the MIBOR rate. The
Spanish authorities calculate that the 0,25 % difference
between the shareholder’s loan and the syndicated loan
amounts to a surplus for Parque TemÆtico de Alicante
SA of between ESP 350 million and ESP 500 million by
comparison with the return from the syndicated loan,
which would represent a reasonable profit.

sent

copies of

The Spanish authorities have
the
documents relating to the shareholder’s loan referred to
above and to the syndicated loan contracted by Terra
M(cid:237)tica SA with a group of banks and savings banks (23)
to enable the Commission to examine whether the
shareholder’s loan was contracted in accordance with
usual practice.

(35)

(30)

(31)

(32)

In this connection, the Spanish authorities explain that
the shareholder’s
loan, concluded on 23 December
1998, provides for an interest rate equivalent to the
for one year,
Madrid interbank offered rate (MIBOR)
plus [(cid:133)]* (*) . The syndicated loan was concluded on 15
April 1999 at an interest rate equivalent to the MIBOR
for one year, plus [(cid:133)]*. According to the Spanish
authorities, what matters is being able to determine
whether a private investor would have lent the same
sum subject to the same conditions, bearing in mind the
information about the project which was available at
the time when the shareholder’s loan was concluded.

In this connection, it is necessary to check whether the
0,25 % difference between the rates of interest on the
two loans makes up for the fact that the shareholder’s
loan is subordinated to the syndicated loan as regards
the application of
in the event of
the guarantees
non-repayment. According to the Spanish authorities,
there are three reference parameters which can be used
interest on the
to check whether
shareholder’s loan can be considered to be a (cid:145)market(cid:146)
interest rate.

rate of

the

(23) The Commission had concluded that the syndicated loan did not
involve any State aid (see recital 57 of the decision of 20 June
2001).

(*) Business secret: Parts of this text have been withheld to ensure
confidentiality; these parts are genoted by square brackets and an
asterisk.

Thirdly, the project’s internal profitability rate, which
was estimated at 10 % in December 1998, should be
taken into account. On the basis of the information
available on the estimated profitability of the project
the time the
and the prospects of
rate
interest
shareholder’s
envisaged, which must at any rate be lower than the
internal profitability rate, was reasonable.

the sector at
the

loan was

granted,

(those

relating

secondary

guarantees

(36) As regards the guarantees, the Spanish authorities take
the view that, although the primary guarantees (those
relating to the syndicated loan) may be sounder than
the
to the
shareholder’s loan), what is at stake is not how they
compare with each other, but whether the guarantees
covering the shareholder’s loan are adequate.
In this
respect, both loans are covered by similar guarantees,
such as the limits imposed on Terra M(cid:237)tica SA with
regard to financial management,
the debt-to-income
ratio or the availability of assets. The Spanish authorities
from the
also point out
shareholder’s loan cannot be converted into capital, and
that profit-sharing cannot be envisaged as a means of
reimbursement, which shows that Parque TemÆtico de
Alicante SA intends to have the loan reimbursed at all
events. Moreover, the Spanish authorities stress that it is
not usual to make loans of this type conditional on the
formal establishment of mortgage guarantees, in view of
the additional costs which this entails. The usual
to give an irrevocable
practice
is
the lender’s
undertaking to establish guarantees at
request. Such an undertaking exists both for
the
syndicated loan and the shareholder’s loan.

in such cases

the debt

arising

that

(24) OJ C 273, 9.9.1997, p. 3.

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Official Journal of the European Union

8.4.2003

(37)

the

authorities

shareholders

shareholders’
the

Finally,
Spanish
point
that
out
in other sectors.
subordinated loans are not unusual
They claim, for instance, that the financing structure of
Terra M(cid:237)tica SA is comparable to that of other similar
projects, such as (cid:145)Port Aventura(cid:146) or (cid:145)Isla MÆgica(cid:146). In this
connection, they have sent the Commission a copy of a
report by an independent expert (25) which states that it
is usual with projects of this type for subordinated loans
to accompany the principal
loan. According to this
report, which includes recent examples of subordinated
loans, the interest rates on subordinated
shareholders’
loans are generally similar to those on principal loans,
and sometimes even lower. The report underlines in this
loans present certain
connection that
advantages
by
concerned
for
comparison with the usual benefits which accrue to
for
them (dividends);
in the event of
is given
example,
servicing the subordinated debt
priority over reimbursing capital;
is payable
even if there are no dividends; shareholders’ loans entail
lower tax costs than increases or reductions in capital,
and so on. As regards the shareholder’s loan to Terra
M(cid:237)tica SA, the report concludes, following an analysis of
factors such as whether or not a subordinated loan is
reasonable within a financial structure like that of the
park, the fact that the lender is a shareholder in the
project, the size of the principal and subordinated loans
in relation to the
to
financial
the interest rates applied and the income
investors,
the guarantees
in view of
accruing to the lender,
covering the subordinated loan,
this transaction
that
may be viewed as normal by comparison with other,
similar projects. The report notes that revenue from the
subordinated loan is higher than that for other, similar
transactions examined during the same period. The
transaction could, then, reasonably have been concluded
by any investor.

liquidation,

forecasts

available

interest

(38)

In conclusion, it is claimed that the shareholder’s loan
contracted by Terra M(cid:237)tica SA vis-(cid:224)-vis Parque TemÆtico
de Alicante SA was concluded in line with the usual
standards.

Rebate on municipal taxes by the municipality of
Benidorm (26)

(39)

The Spanish authorities do not examine the issue of
whether
the granting of a tax rebate by a public
authority may imply an element of State aid, although

(25) The firm concerned is Ahorro Corporaci(cid:243)n Financiera, SBV, SA,
which is one of Spain’s principal financial consultancies. It is a
private company in which 42 Spanish savings banks have a share
and which has a great deal of experience on the Spanish financial
market.

(26) The rebate was ESP 88 399 400 (EUR 531 291).

in the present case they deny that it could have affected
intra-Community trade. At all events, if this rebate was
State aid,
it should be declared compatible with the
single market, as it represented aid to initial investment.
The Spanish authorities stress that the legal basis for the
applied to all Spanish
rebate
municipalities.

a general

rule

is

(40)

The Spanish authorities also point out that since Terra
M(cid:237)tica SA was set up, it has paid all the taxes due on its
activities.

The possible contribution to Terra M(cid:237)tica SA of ESP 6 000
million by the Valencia Tourist Agency

(41)

(42)

(43)

Firstly, the Spanish authorities deny the existence of any
agreement between the Valencian Tourist Agency and
Terra M(cid:237)tica SA under which the Agency is
to
(cid:145)contribute(cid:146) ESP 6 000 million to Terra M(cid:237)tica SA. There
is no basis for this information, which seems to have
been published by the press.

Rather,
in April
the Spanish authorities explain that
2001 the Agency and Terra M(cid:237)tica SA signed a contract
covering exploitation rights for publicity purposes and
the provision of
services, a copy of which was
forwarded to the Commission, for the sum of ESP 1 900
million (EUR 11,42 million),
including expenses and
taxes.

The Spanish authorities take the view that this contract
does not contain any elements of State aid, as the price
(which is much lower than the supposed contribution
referred to in the Commission’s decision) consists of
payment for certain services carried out under contract
by Terra M(cid:237)tica SA on behalf of the Agency.

(44) According to the Spanish authorities, Terra M(cid:237)tica SA
has, since the outset, defrayed all the expenditure on
investment in promoting and publicising the park (27).
The Valencian Tourist Agency is a public body with
legal personality whose purpose is to promote the
the Autonomous Community of
tourism assets of
Valencia, which naturally includes the park as one of
the regions’ major tourist attractions. The tools which it
uses for this purpose are promotion, participation in
trade fairs, sponsorship, the use of rights to particular
symbols or
exploitation of
images,
trademarks associated with the region, and so on.

images,

the

(27) This expenditure totalled [(cid:133)]* in 1998, [(cid:133)]* in 1999 and [(cid:133)]*

in 2000.

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(45)

The Spanish authorities take the view that this contract
does not confer any unlawful advantages on Terra
M(cid:237)tica SA, as it respects the principle of the private
investor in a market economy. They believe the price
paid by the Agency is reasonable in view of what it is
getting in return. They acknowledge that establishing
what is a reasonable price is not straightforward in this
case. In their view, determining the price of particular
rights or services means taking account both of their
intrinsic value and the interest of the other party in
acquiring them. They therefore stress that it is of great
importance
the park in
the Agency to use
advertising to attract tourists to the region; since its
inception, the park has been one of the region’s major
tourist assets and has enabled Valencia to diversify its
tourist attractions, which have hitherto been exclusively
(cid:145)sun and sand(cid:146). In any case, the Spanish authorities stress
the fact that the contract was concluded for one year
and that it is clear that it cannot be tacitly extended.
The express agreement of both parties is required for
the contract to be renewed, and both parties must also
agree on the financial conditions, which would enable
adjustments to be made if an imbalance between the
parties’ obligations were identified.

for

(46)

The Spanish authorities then go on to explain the
nature of the two parties’ reciprocal obligations. Terra
M(cid:237)tica SA grants the Agency licences for the following
activities:

to run all

(a) exploiting advertising inside the park. The Agency
acquires the exclusive right
the park’s
advertising activities (without prejudice to the rights
granted by the park prior to this contract) (28). The
licence covers the whole of the area inside the park,
without making any distinction between the various
shopping areas, the entrance, the boundary fences
and the car park. This means that the Agency can
use and exploit all existing or potential advertising
space and develop any advertising activities that it
wishes inside the park. These rights are valued at
[(cid:133)]*;

(28) The park had granted non-exclusive licences of a far more limited
scope to two other firms [(cid:133)]*. The price of these two contracts
was [(cid:133)]* and [(cid:133)]* respectively. Under the first contract the park
undertook to incorporate the firm’s logo in three of the park’s
attractions and to display it at
the entrances and in the
guidebooks, and to make available space for a hoarding inside the
park. Under the second contract, the park undertakes, inter alia, to
display the firm’s logo at the entrances, in the guidebooks and on
a standing stone. The Spanish authorities
these
contracts were entered into before the park was opened.

stress

that

right

the park,

including the

(b) making use of pictures of the park. The Agency
acquires the right to use and commercially exploit
pictures of
to
reproduce images of any area of the park and any
event taking place inside it, whether or not such
events are organised by the Agency itself. It has the
option of selling these rights to third parties without
having to ask the park’s permission, provided that
this helps in one way or another to promote the
Autonomous Community of Valencia. This right is
valued at [(cid:133)]*;

(c) exploiting audiovisual productions owned by the
park. The Agency can use and commercially exploit
such productions. The Spanish authorities state that
the park has invested around [(cid:133)]* in audiovisual
productions. This right is valued at [(cid:133)]*;

(d) exploiting industrial property rights. The Agency
acquires a non-exclusive licence for the exploitation
of all the Terra M(cid:237)tica trademarks owned by the
park, as well as a preferential option to acquire the
right to exploit other trademarks which the park
may acquire. The Spanish authorities state that the
Terra M(cid:237)tica trademark is extremely valuable thanks
to efforts made by the park, which invested [(cid:133)]*,
particularly in advertising, between 1998 and 2000.
The price takes into account, inter alia, the cost of
creating and developing the trademark, the public’s
awareness of the trademark (29), and the extent to
which the park is expected to develop. The Spanish
authorities also state that when the cost of
this
licence was decided, the park’s indirect benefits in
terms of promotion, as a result of the fact that the
Agency had acquired this licence, were correctly
taken into account in the price of the licence,
in
accordance with the contract’s
stipulations. The
Spanish authorities take the view that such licences
are common in this sector, and refer to another
park by way of illustration. These rights are valued
at [(cid:133)]*;

(e) providing certain services to the Agency. The park
undertakes to display the logo designated by the
Agency inside the park (on the various attractions,
in the toilets, at the entrances and in the rest areas)
and to use it
in all advertising or promotional
activities which it carries out (in guidebooks, plans,
advertisements via various media, on entrance

(29) It is estimated that 96,3 % of people living in the region and
approximately 60 % of the Spanish population know the Terra
M(cid:237)tica trademark. No other leisure activity in the region is as
well-known.

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tickets, etc) (30). In addition, the park commits itself
to making two buildings inside the park available
for the Agency’s use (which means a loss of the
revenue which could have been raised by using the
areas occupied by the buildings) (31). This also
the
provides a strategic information point
Agency, in view of the large number of visitors to
the park. The park also undertakes to show the
Agency’s promotional
films on screens inside the
park and to hand over a percentage of entrance
charges to the Agency (32). These services are valued
at [(cid:133)]*.

for

Each of
these services to the Agency has been
is maintained, has an
it
objectively valued and,
economic basis, although an overall price was
negotiated in the end. As stated above, the price of
ESP 1 900 million includes all the costs involved,
to calculate the net
plus taxes. Thus,
amount which Terra M(cid:237)tica SA could actually collect
in practice, all the costs defrayed by the firm and
the taxes payable should be deducted from this
price. The Spanish authorities estimate that the real
net value is approximately ESP 1 600 million (EUR
9,62 million).

in order

Compatibility with the common market of the measures
analysed

(47)

(48)

If the Commission were to take the view that these
measures constitute State aid, the Spanish authorities
believe they would be compatible with the Treaty,
in
accordance with Article 87(3)(a) thereof.

In this context, the Spanish authorities would point out
that at the time when the measures under consideration
the region of Valencia was fully
were implemented,
eligible for regional aid,
in accordance with Article
87(3)(a) of the Treaty. Specifically, the maximum aid
intensity for the province of Alicante, where the park is
situated, was 50 % of the net grant equivalent over the
period 1995 to 1999. Moreover, the whole region of
Valencia continues to be eligible for regional aid in the
succeeding period (2000 to 2006), in accordance with
Article 87(3)(a) of the Treaty, the maximum level for
the province of Alicante being 40 % of the net grant
equivalent.

(49)

The Spanish authorities recognise that if one or more of
the measures analysed constituted State aid, it would be

ad hoc aid. However,
in this case the aid would be
justified in view of its contribution to the long-term
development of the region and because it has no impact
on competition conditions and trade flows between the
Member States.

is,

the impact on competition,

(50) Although the Spanish authorities take the view that the
Community multisectoral guidelines on regional aid to
major investment projects (33) are not applicable in this
case, it would be useful to analyse the case in the light
of the evaluation criteria set out down in the guidelines,
that
the effect on
employment and the regional impact. For instance, any
aid provided would contribute to the region’s long-term
socioeconomic development, particularly through the
large numbers of
creation, directly and indirectly, of
jobs (34), without having
impact on
competition, since the market concerned has no excess
capacity (35) and the jobs thus created will not increase
a large market share.

a negative

(51)

If it were considered that aid had been granted in the
present case,
investment in
it would be aid to initial
setting up a new establishment within the meaning of
points 4.4 f.f. of the guidelines on national regional
aid (36): such aid would relate to new immovable assets
(land, installations and buildings), the investment would
be maintained for a minimum of five years and the
beneficiary would have funded more than 25 % (37).

(52)

Finally, even if it were decided that all the measures in
question count as State aid, they would easily fall within
the maximum intensity allowed for
investment aid
(50 % of the net grant equivalent applicable at the time),
even if the other regional aid already granted is taken
into account (38).

Comments by the Spanish authorities on the
observations made by interested parties

(53)

The Spanish authorities have stated that they have given
a comprehensive response to all the issues raised by the
complainant and that
they therefore have nothing
further to say in reply to the comments made by the
European Federation of Amusement and Leisure Parks.

(30) The Agency’s logo features in or on the following: guidebooks,
plans, entrance tickets, motorbikes, flags, hoardings, wheelchairs,
trolleys, posters, bins and signs to the park.

(31) On the basis of a comparison with the sales volumes of nearby
buildings, it is estimated that the sales volumes of these buildings
could be around [(cid:133)]* between January and July 2001, which
would mean an annual turnover of [(cid:133)]*.

(32) The value of [(cid:133)]* entrance tickets was transferred in the period
up to September 2001, which represents a net value of over [(cid:133)]*.

(33) OJ C 107, 7.4.1998, p. 7.
(34) 1 847 jobs were created directly in 2001.
(35) The Spanish authorities point out that the theme park market is
practically new in Spain and that it is developing fast; demand is
expected to increase by around 10 % per year.

(36) OJ C 74, 10.3.1998, p. 4.
(37) Point 4.2 of the guidelines.
(38) See recital 62 of the Commission decision of 20 June 2001.

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ASSESSMENT

No impact on intra-Community trade

(54)

in question against

the claims made by the Spanish authorities
Firstly,
(referred to in recital 18) call for a brief response. In
accordance with case-law in the field of State aid, the
Commission is required to investigate all the complaints
laid before it, although this does not mean that an
the
appeal by the complainant
Commission decision on the complaint
is necessarily
admissible. Moreover, under Article 10(1) of Regulation
(EC) 659/1999 with regard to the State aid procedure,
the Commission is obliged to examine all information
concerning a presumed case of unlawful aid, whatever
the source of such information.
In the case under
scrutiny, the Commission takes the view that it should
respond to the European Federation of Amusement and
Leisure Parks as such, and that there is no reason to
pre-judge whether or not it is acting as a front for a
complainant wishing to conceal his or her identity. As
to the letters previously sent by the Commission’s
departments
the
complainant, it is clear that they did not set out a final
decision, but a provisional position on the part of the
Commission’s departments.

Spanish authorities

to the

and

(55) Article 87(1) of the Treaty states that, save as otherwise
provided in the Treaty, any aid granted by a Member
State or through State resources in any form whatsoever
which distorts or threatens to distort competition by
favouring certain undertakings or
the provision of
certain goods shall, in so far as it affects trade between
Member States, be deemed incompatible with the single
market. A measure is thus deemed to be State aid if it
meets four criteria: (a) it confers an advantage; (b) this
advantage is conferred by means of State funding; (c)
the measure distorts or threatens to distort competition,
thereby affecting trade between the Member States; and
favouring
concerned is
the measure
(d)
particular companies.

selective,

(56)

(57)

The Commission must
therefore analyse the various
measures referred to in recital 16, in respect of which it
initiated the procedure provided for in Article 88(2) of
the Treaty, in the light of the four criteria referred to in
recital 55.

its

the

decision to

In
above-mentioned
initiate
procedure, the Commission had already noted that, as
far as most of the measures were concerned, its doubts
centred on whether or not State aid was at issue. As
the
regards
municipal
tax rebate granted by the Benidorm local
authorities, the Commission took the view at this stage
that that this was an instance of State aid and that it
should be examined to see whether it was compatible
with the common market.

complainant’s

allegations

about

the

(58) Nonetheless, the Spanish authorities have replied to the
Commission’s initial assessment that the measures being
examined under the present procedure have an impact
on intra-Community trade. Since this is one of
the
elements needed to determine whether State aid is
present, this issue has to be decided first and foremost.

(59)

(60)

a

large

In this context, the Spanish authorities take the view
that Terra M(cid:237)tica must be classed as a regional park
rather than as a destination park, firstly because it is not
part of
chain of parks under unified
management, as is the case with EuroDisney, and it is
not based on a standard theme based on the use of
assets in other markets, as with Universal or Warner,
and secondly because people living within a radius of
between 150 km and 200 km of the park account for
almost 90 % of primary demand, while people resident
in Spain account for most of the remaining 10 %.

it

previous

share the views of

decisions (39). Moreover,

the
The Commission does not
Spanish authorities. The fact that Terra M(cid:237)tica is not
part of a chain of parks under unified management, like
EuroDisney, does not prevent
from being large
enough to affect trade, as the Commission has judged in
the
various
Commission takes the view that, contrary to the claims
of the Spanish authorities, the park does have a specific
theme
(ancient Mediterranean civilisations), which
means that it can be viewed as similar to other parks
such as those referred to by the Spanish authorities.
Finally, even if people living in the region around the
park do account
the
documentation forwarded by the Spanish authorities
concerning links between Terra M(cid:237)tica SA and the
Valencian Tourist Agency shows that
the park has
maintained an active policy of attracting visitors from
abroad. Moreover,
the park’s own publicity materials
clearly show how to get there from a number of major
European cities. Finally, the park clearly adds to the
attractions of the Benidorm area, which is visited by a
very large number of
including many from
tourists,
other EU countries, by diversifying the activities on
offer.

for most of primary demand,

(39) See Cases N 640/99 France (OJ C 284, 7.10.2000, p. 4);
N 132/99 Italy (OJ C 162, 10.6.2000, p. 23); N 785/99 Italy (OJ
C 382, 18.11.2000, p. 22); N 582/99 Italy (OJ C 40, 12.2.2000,
p. 2); N 229/01 Italy (OJ C 330, 24.11.2001, p. 2).

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(61)

(62)

(63)

(64)

The Commission therefore confirms the assessment set
out in its decision to initiate proceedings; it considers
that
trade
between Member States.

the measures under

scrutiny may affect

Funding the infrastructure necessary for the park’s operation

In its decision of 20 June 2001, the Commission had
expressed doubts as to the part played by the Valencia
regional administration in funding infrastructure which,
possibly, ought to have been the responsibility of Terra
M(cid:237)tica SA.

shows

forwarded

documentation

Spanish
The
authorities
and
infrastructure plan, the whole of the area in which the
park is located has been developed and subjected to
infrastructure work.

the Land use

that, under

the

by

In this context, the Commission takes the view that
public powers can, as the Spanish authorities state, carry
out work to develop their land. They can, for instance,
fund infrastructure which will benefit the population as
a whole. Moreover, the Commission considers that the
reason for which such infrastructure is
set up is
indifferent, provided that it is done in the interests of
if such
the local community as a whole. However,
infrastructure of services will serve the needs of a
private company only, that company is responsible for
funding them. This follows from the fact that, where
State aid is concerned, the Commission’s remit is to
the measures concerned in
analyse the impact of
practice,
In the
rather
present case, the Commission therefore takes the view
that, even if the Land use and infrastructure plan had
been adopted solely in connection with plans to build a
theme park, what matters
to analyse which
construction projects or infrastructure are of benefit to
the community as a whole (including the park) and
which are of use to the park only. It is only the latter
which should be funded by the park.

than the objectives pursued.

is

(65)

In the light of the detailed explanations provided by the
Spanish authorities, the Commission believes the general
infrastructure could have been publicly funded.
It
considers that this infrastructure is useful to all natural
or legal persons resident in the area. Moreover, it notes
that the work was carried out before Terra M(cid:237)tica SA
was set up. It also considers that, although the increase
in traffic may be due to the park, the roadworks carried
out affect everyone living in the area. The same applies
to work carried out on electrical, gas, water and
telecommunications infrastructure. This is true despite

that

the fact
the park may have brought about an
increase in traffic in the area or increased the use of
electricity,
telecommunications
infrastructure.

water

gas,

or

(66)

The Commission has also noted, having examined the
documentation forwarded by the Spanish authorities,
that Terra M(cid:237)tica SA funded all the infrastructure work
carried out inside the park and all the connections with
general infrastructure. It has not been able to determine
whether there is other infrastructure which should have
been funded by Terra M(cid:237)tica SA because it
is used
exclusively by that firm.

(67)

In view of the above, the Commission considers that
Terra M(cid:237)tica SA has not received any aid in this area. It
thus concludes that there has been no State aid to fund
infrastructure required for the operation of the park.

Value of the assets transferred to Terra M(cid:237)tica SA by Parque
TemÆtico de Alicante SA and, in particular, of the land and
the Terra M(cid:237)tica trademark

(68)

First and foremost, the Commission reiterates that it
does not doubt the independence of the experts who
valued the assets transferred by Parque TemÆtico de
Alicante SA to Terra M(cid:237)tica SA, as there is no indication
whatsoever that
the public authorities influenced the
experts in their work (40). The Commission also notes
that Terra M(cid:237)tica SA played no part in the selection of
Tabimed as an expert.
It recalls that the purpose of
initiating the present procedure was to ensure that the
value assigned to the assets transferred to Terra M(cid:237)tica
SA corresponded to their true value at
the time of
transfer.

first

that of

and foremost,

(69) As regards the value of the land, the Commission points
out,
two values
the higher value
two experts,
established by the
(established by TINSA) was finally chosen (ESP 1 300
ESP/m2). It also notes that, as the Spanish authorities
recalled, the method used by TINSA was the one which
for
the
assessing assets of this type.

complainant viewed as most

appropriate

the

(70)

The Commission has not found any evidence in support
of the price which the complainant suggested as the

(40) See the sixth paragraph of recital 56 of the Commission’s decision

of 20 June 2001.

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local market price (41). It believes that the value of land
had to take account of its use, i.e. the fact that the land
in question was to be used to build a theme park. It
would thus be inappropriate to assign it a price
comparable to that of
land intended for residential
purposes. In the absence of any other information, the
assessment method used by TINSA (capitalisation of
expected income) seems entirely appropriate in this
case.

(71)

(72)

In view of the above and on the basis of its research,
the Commission considers that it has no information
suggesting that the value assigned to the land was not
its real value. It notes, moreover, that the way in which
the sale price was established is in accordance with
section II(2)(a) of the Commission communication on
State aid elements in sales of
land and buildings by
public authorities (42).

the rights

The Commission considers that the value which should
be assigned to the Terra M(cid:237)tica trademark is its real
value at the time of transfer. It notes that the trademark
had not yet been finally registered when the transfer
took place. However, the value of such an asset clearly
depends on the extension of
inherently
associated with it. Third parties cannot be prevented
from using a trademark unless it is registered. Under
these circumstances, the Commission shares the views
of the Spanish authorities on the matter, considering
that the value assigned by the expert to the trademark
(the purchase price only) reflected the value of the asset
at the time of transfer and is thus in line with the
principle of prudence. Moreover, the complainant has
not provided any evidence in support of his allegations
as to the trademark’s value.

(73)

In view of the above, the Commission considers that
enjoyed any particular
Terra M(cid:237)tica SA has not
advantage in this respect. Since a firm must enjoy such
an advantage if it is to be deemed to be in receipt of
State aid, the Commission concludes that no State aid
was provided to increase the value of
the assets
transferred to Terra M(cid:237)tica SA by Parque TemÆtico de
Alicante SA, notably as regards the value of land and
the Terra M(cid:237)tica trademark.

Conditions governing the shareholder’s loan granted to Terra
M(cid:237)tica SA by Parque TemÆtico de Alicante SA

(74) As in the previous case, the Commission has to analyse
whether the shareholder’s loan was granted by Parque

(41) ESP 2 000/m2 for land which cannot be used for residential
purposes and ESP 5 000/m2 for land which can, see the third
paragraph of recital 56 of the Commission’s decision of 20 June
2001.

(75)

(76)

(77)

similar

TemÆtico de Alicante SA to Terra M(cid:237)tica SA under
to those applying to a private
conditions
shareholder. It therefore has to take into account the
circumstances applying at the time when the loan was
contracted.

financial bodies (43)

the Commission considers that

Firstly, the Commission notes that the shareholder’s loan
was contracted on 23 December 1998, that is, near to
the date of the syndicated loan (contracted on 15 April
1999). Now, as laid down in its decision of 20 June
2001,
the syndicated
loan was contracted under market conditions, as the
lenders are 25 commercial
(10
private banks and 15 savings banks), all of which had
significant shares. It has not uncovered any evidence to
suggest that public authorities were behind the decision
taken by the financial bodies, whichever they are, to
take a share in the loan (see Case 482/99 Frabce v
Finally,
Commission
to the
according
the
Commission by the Member State concerned,
syndicated loan was not underwritten by any guarantee
by the public authorities. The Commission can therefore
use the conditions applicable to the syndicated loan to
analyse the shareholder’s loan. It also notes that the use
of the funding formula chosen by Terra M(cid:237)tica SA (a
shareholder’s loan subordinated to a principal
loan) is
not unusual for projects of this type and that in such
cases the interest rate on the subordinated shareholder’s
loan,
is
comparable to and sometimes even lower than the
interest rates on the principal loans.

(cid:145)Stardust(cid:146) of 16 May 2002).
information forwarded

reimbursement

conditions,

identical

to the

for

than the interest

In this connection, the interest rate on the shareholder’s
loan [(cid:133)]* is higher
rate on the
syndicated loan [(cid:133)]*, a loan granted by commercial
institutions which was not underwritten by the public
authorities, and must
therefore be considered as a
market interest rate. Moreover, the interest rate on the
shareholder’s loan is higher than the rates applied to
private
loans
other
shareholders for similar projects.

shareholder’s

granted

by

loan at

the issue of

the relative rank of

The Commission also notes that the interest rate on the
shareholder’s
the time it was granted is
comparable to the reference rate applicable at the time.
the two
Moreover,
loans, that is, the fact that the shareholder’s loan was
subordinated to the other one and therefore ran a
greater risk if the project were to fail, must be seen in
relation to the two loans as a percentage of the total
investment. The Commission would point out here that
the syndicated loan accounts for approximately [30 % to
40 %]* of the total investment, while the subordinated

(42) OJ C 209, 10.7.1997, p. 3.

(43) See recital 57 of the decision of 20 June 2001.

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Official Journal of the European Union

8.4.2003

loan represents approximately [10 % to 20 %]*. Finally,
it notes that all of the lenders took their decisions on
the basis of a pre-established financial plan which
showed that the project was viable.

will analyse whether this measure can be considered to
be compatible with the single market.

(78)

(79)

(80)

The Commission therefore takes the view that
the
shareholder’s loan granted to Terra M(cid:237)tica SA does not
involve any particular advantage. Since the existence of
an advantage which would benefit a particular firm is a
necessary condition for
the
Commission concludes that there has been no State aid
as regards the conditions under which the shareholder’s
loan was granted to Terra M(cid:237)tica SA by Parque
TemÆtico de Alicante SA.

identifying State

aid,

Municipal tax rebate provided by the Benidorm local
authorities

The Commission considers it proven (cid:151) and the Spanish
authorities have not replied on the matter (cid:151) that Terra
M(cid:237)tica SA has benefited, thanks to a decision by the
Benidorm local authorities, from a 95 % rebate on the
municipal
and
buildings,
infrastructure, which represents
sum of ESP
88 399 400 (EUR 531 291).

installations
the

tax

on

this

that

the Treaty. After all,

rebate must be
The Commission believes
classed as State aid within the meaning of Article 87(1)
of
the rebate constitutes an
advantage vis-(cid:224)-vis other firms which would like to start
work of this kind. In addition, the advantage gained was
clearly conferred using State funds, and this is an
example of a selective measure. Finally, as indicated in
recital 61, the Commission does not share the view of
the Spanish authorities,
the
it believes that
measure may possibly affect
intra-Community trade.
Moreover, the Commission considers that the fact that
the legal basis on which the rebate was granted is a
Spanish
applicable
universal
municipalities does not mean that the present case does
involve aid, given the considerable margin for
not
discretion which each municipality has. It also considers
that the fact that Terra M(cid:237)tica SA has paid all its other
taxes is irrelevant to the case.

rule (44)

in that

all

to

(81)

The Commission therefore concludes that the tax rebate
constitutes State aid to Terra M(cid:237)tica SA of ESP
it
88 399 400 (EUR 531 291). In recitals 91 to 100,

(44) The legal base is Article 104(2) of Law 39/1988 of 28 December
1988 on local public finance, as amended by Article 18(28) of
Law 50/1998 of 28 December 1998, on measures relating to tax,
administrative matters and social order.

The possible contribution to the value of ESP 6 000 million
by the Valencian Tourist Agency

(82)

(83)

(84)

(85)

(86)

the

that

the Commission notes

Firstly,
Spanish
authorities have formally denied the existence of the
contribution referred to in the decision of 20 June
2001. The Spanish authorities attribute the claim
concerning the contribution to unfounded press reports.
The Commission also notes that it has not discovered
anything which might back up the claim. It therefore
concludes that there is no such contribution.

The Commission also notes that the Spanish authorities
recognise the existence of a contract between the
Valencian Tourist Agency and Terra M(cid:237)tica SA on a
licence granting rights to exploit advertising and provide
services, a copy of which the Commission has received.
Under this contract, the Agency pays ESP 1 900 million
(EUR 11,42 million) for certain facilities provided by
Terra M(cid:237)tica SA.

In view of the nature of the public bodies dependent on
the Commission
the Valencia regional government,
takes the view that the existence of State aid to Terra
M(cid:237)tica SA cannot be excluded, if it transpires that the
price paid by the agency is excessive by comparison
with the services obtained in return.

In this context, the Commission notes that under the
contract in question, Terra M(cid:237)tica SA grants the Agency
a number of licences to exploit advertising relating to
images of the park, audiovisual productions
the park,
owned by the park,
the Terra M(cid:237)tica trademark and
other services, including the use of premises inside the
park and takings from entrance tickets to the park.

In the Commission’s view,
the possibility cannot be
ruled out a priori that certain aspects of the contract,
considered in isolation, could suggest the existence of
aid to Terra M(cid:237)tica SA. This applies particularly to the
granting of industrial property rights, which gives the
park an advantage in that the fact that the Agency has
the right to use the Terra M(cid:237)tica trademark and does so
in activities to promote the region, means in practice
that the park is promoted and paid for the privilege.
The same could apply to the right to exploit images of

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Official Journal of the European Union

L 91/35

to

the

and

right

exploit

the park
audiovisual
productions owned by it, as the exercise of these rights
can also constitute publicity for the park. However, in
its assessment the Commission cannot ignore the fact
that these benefits to the park have been taken into
in setting the overall contractual
account,
price (45).

in theory,

(87) On the other hand, the Commission also notes that the
contract stipulates a number of services which are by no
means negligible to be provided to the Agency by the
park. In particular, it notes that the price [(cid:133)]* payable
for the exploitation by the Agency of
the exclusive
licence covering the park’s internal advertising potential,
which includes over 60 attractions and associated
services and plenty of opportunities to set up publicity
hoardings, seems more favourable to the Agency if
compared with the prices paid by the two private
companies for non-exclusive licences that are far more
limited in scope [(cid:133)]* for three sets of premises and a
hoarding, and [(cid:133)]* for one set of premises, in addition
to takings from entrance tickets and guidebooks in both
cases). Moreover, the price of services rendered to the
Agency seems low, taking into account the fact that the
loss of earnings resulting from the non-use of the area
and the
occupied by the
distribution of free entrance tickets is as much as [(cid:133)]*.
This indicates that the contract provides for reciprocal
benefits to both contracting parties and is thus balanced
as a whole, as shown by the fact that there is an overall
price for services as a whole. It should also be noted
that the revenue actually received by the park is lower
than that mentioned in the contract, bearing in mind
that taxes and all specific costs have to be deducted
from the takings.

two sets of premises

(88)

Finally, the Commission notes that the contract runs for
one year only and that the possibility of automatically
renewing it is ruled out unless an explicit agreement is
reached by both parties, both of which are entirely free
to renegotiate the price and thus to adjust it in line with
experience. Although this clause shows that the two
parties involved are concerned, given the complexity of
the conditions obtaining, not to permanently establish
any particular situation or to create unjustified sources
of revenue, but intend, rather, to adjust their contractual
links in line with their mutual commercial interests, it
does leave open the issue of whether aid might come
into play if the contract were renewed or extended.

(89)

In view of the above, the Commission cannot take the
view that the contract was concluded under conditions
which would have been unacceptable to a private
operator acting within the normal
framework of a
market economy.

(45) Clause 6(6) of the contract.

(90)

(91)

(92)

(93)

It therefore considers that by concluding this contract
with the Valencian Tourist Agency, Terra M(cid:237)tica SA has
not benefited from any special advantages. Since the
existence of an advantage to a firm is a necessary
condition for
the
there is no State aid
Commission concludes
involved here.

identification of State

that

aid,

the

Compatibility of aid with the single market

of

the

the

light

above

considerations,

In
the
Commission has identified only one measure, out of all
those subject to the present procedure, which fulfils the
necessary conditions to be deemed an instance of State
aid within the meaning of Article 87(1) of the Treaty.
That measure is
tax
applicable to building,
installations and infrastructural
work granted by the Benidorm local authorities. In what
follows, the Commission will analyse to what extent the
measure is compatible with the common market.

the rebate on the municipal

left

framework of

to the discretion of

the Commission notes that
framework of

the aid was not
Firstly,
an aid regime
granted within the
the tax
authorised by itself. The legal
rebate granted under Spanish law is extremely vague
and much is
the local
authorities. The measure thus constitutes ad hoc aid. In
accordance with point 2(3) of
the abovementioned
guidelines on regional aid to major investment projects,
the Commission generally takes an unfavourable view of
such aid. At all events, there is a need to ensure a
balance between the distortion of competition caused by
aid and the advantages of aid in promoting the
development of a less favoured region (46). However,
the extent to which aid confers advantages can vary
according to which exemption is applied;
it is more
harmful to competition in the situations referred to in
Article 87(3)(a) of the Treaty than in those described
under Article 87(3)(c) (47).

the Treaty.

In this context, the Commission notes that the region
where the park is situated is an area receiving aid in
accordance with Article 87(3)(a of
It
therefore takes the view that the aid could be declared
in accordance with the
compatible with the Treaty,
derogation provided for
the
unfavourable view referred to above could be overcome
and it could be demonstrated that the aid in question
makes an effective contribution to the development of a
disadvantaged region.

in Article 87(3)(a),

if

(46) See point 2(2) of
investment projects.

(47) Ibid.

the guidelines on regional aid to major

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Official Journal of the European Union

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(94)

initial

In this context, the Commission considers that the aid
the
provided constitutes
building of the park (which would normally be subject
to the appropriate tax) corresponds to the definition
given in the first paragraph of point 4.4 of
the
guidelines on regional aid to major investment projects.

investment aid, as

(95) Moreover, it notes that the beneficiary’s contribution to
the funding of
the project greatly exceeds the 25 %
stipulated in the first paragraph of point 4.2 of the
guidelines on regional aid to major investment projects.
It also notes that the request for aid must have been
presented before the implementation of the project got
under way, as stipulated in the third paragraph of point
4.2 of the guidelines, since it was essential to obtain the
taxable licence before starting the work.

(96)

In addition, the Commission believes that it is clear in
the present case that investment will be maintained for
at least five years, as stipulated in point 4.10 of the
guidelines.

(97)

the

gross

intensity

the intensity of

The Commission notes that
the aid
granted is very low. It amounts to ESP 88 399 400 out
of a total investment estimated at ESP 52 000 million,
which puts
at under 0,2 %.
Consequently, even if this aid is taken together with the
other forms of regional aid granted by the central
authorities to the same project (ESP 2 426,7 million,
which represents an intensity of approximately 7 %
gross) (48), it is still far below the regional aid ceiling.
Moreover, the regional aid granted (under Law 50/1985
on regional incentives), even if taken together with the
is far less than what the park could have
tax rebate,
obtained under the regional aid scheme in place.

impact at Community level is such as to affect trade, it
indicated by the Spanish
is nonetheless
authorities (the park is not part of a chain, and its
customers are mainly local and Spanish) in recital 19.

limited, as

(100)

In view of the above, the Commission takes the view
that the municipal tax rebate on building, installations
and other works, granted by the Benidorm local
to Terra M(cid:237)tica SA, may be declared
authorities
compatible with the single market under Article 87(a)(3)
of the Treaty.

CONCLUSION

(101)

In view of the above, the Commission concludes that
the measures analysed relating to the funding of the
infrastructure needed for the operation of the park, the
the assets (notably the land and the Terra
value of
transferred to Terra M(cid:237)tica SA by
M(cid:237)tica trademark)
Parque TemÆtico de Alicante SA,
conditions
governing the shareholder’s loan granted to Terra M(cid:237)tica
SA, and the contract between the Valencian Tourist
Agency and Terra M(cid:237)tica SA do not constitute State aid
within the meaning of Article 87(1) of the Treaty.

the

(102) The Commission also concludes that the rebate on the
municipal tax on building, installations and other work
granted by the Benidorm local authorities to Terra
M(cid:237)tica SA constitutes a case of State aid within the
meaning of Article 87(1) of the Treaty. It notes that the
Kingdom of Spain granted this aid unlawfully,
in
contravention of Article 88(3) of the Treaty. However,
the aid may be declared compatible with the Treaty,
pursuant to Article 87(3)(a) thereof,

(98)

In addition, the Commission believes that this project
makes a significant contribution to the development of
a disadvantaged region. The project has created a large
number of jobs directly (1 847 in 2001) and it is to be
hoped that many more will by created indirectly, given
the dynamising impact which such projects can have on
the region as a whole. This also helps to diversify the
type of tourism available in the region.

HAS ADOPTED THIS DECISION:

Article 1

(99)

Finally, the Commission believes that this small amount
of aid cannot affect trade in a way liable to harm the
common interest, bearing in mind that while the park’s

(48) See recital 62 of the decision of 20 June 2001.

the infrastructure
The measures relating to the funding of
necessary for the operation of the Terra M(cid:237)tica SA theme park,
the value of the assets (notably the land and the Terra M(cid:237)tica
trademark) transferred to Terra M(cid:237)tica SA by Parque TemÆtico
de Alicante SA,
the conditions governing the shareholder’s
loan granted to Terra M(cid:237)tica SA, and the contract between the

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Valencian Tourist Agency and Terra M(cid:237)tica SA do not
constitute State aid within the meaning of Article 87(1) of the
Treaty.

Article 3

This Decision is addressed to the Kingdom of Spain.

Article 2

Done at Brussels, 2 August 2002.

The State aid granted by the Benidorm local authorities in the
form of a rebate on the municipal tax on building, installations
and other work to Terra M(cid:237)tica SA, which totalled ESP
88 399 400 (EUR 531 291) is compatible with the Treaty, in
accordance with Article 87(3)(a) thereof.

For the Commission

Mario MONTI

Member of the Commission