Invitation to submit comments pursuant to Article 1(2) in Part I of Protocol 3 to the Surveillance and Court Agreement on State aid with regard to the property transactions engaged in by the municipality of Time concerning property numbers 1/152, 1/301, 1/630, 4/165, 2/70 and 2/32 in Time
Date: 2008-06-05
Institutions: EFTA Surveillance Authority
Subjects: Norway, State aid, control of State aid, real property, sale

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Invitation to submit comments pursuant to Article 1(2) in Part I of Protocol 3 to the Surveillance
and Court Agreement on State aid with regard to the property transactions engaged in by the
municipality of Time concerning property numbers 1/152, 1/301, 1/630, 4/165, 2/70 and 2/32 in
Time

(2008/C 138/11)

By means of Decision No 717/07/COL of 19 December 2007, reproduced in the authentic language on the
pages following this summary, the EFTA Surveillance Authority initiated proceedings pursuant to Article 1(2)
in Part I of Protocol 3 of the Agreement between the EFTA States on the Establishment of a Surveillance
Authority and a Court of Justice (Surveillance and Court Agreement). The Norwegian authorities have been
informed by means of a copy of the decision.

The EFTA Surveillance Authority hereby gives the EFTA States, EU Member States and interested parties
notice to submit their comments on the measure in question within one month from the publication of this
notice to:

EFTA Surveillance Authority
Registry
Rue Belliard 35
B-1040 Brussels

The comments will be communicated to the Norwegian authorities. Confidential treatment of the identity of
the interested party submitting the comments may be requested in writing, stating the reasons for the
request.

SUMMARY

PROCEDURE

On 3 March 2007, the Authority received a complaint from a community association concerning the sales
of property numbers 1/152, 1/301, 1/630, 4/165 in Time municipality by the municipal authorities to two
different private entities, as well as the sale of title number 2/70 (Bryne stadium which also includes title
No 2/32) by Bryne fotballklubb (a football club), previously given to the club by the municipality, to a
private investor.

By letter dated 9 May 2007, a private investor sent a complaint to the Authority concerning the sale by
Time municipality of one of the abovementioned properties, i.e. number 4/165.

By letter dated 19 June 2007, Time pensjonistparti (a political party) complained about an exclusive right
allegedly granted to Forum Jæren AS with respect to the development of 200 underground parking spaces
at the property in the centre of the Bryne to be used for the construction of a new upper secondary school
(title numbers 1/125, 2/277, 2/278 and 2/284).

Following correspondence with the Norwegian authorities, the Authority has decided to open a formal
investigation procedure with respect to the property transactions engaged in by the municipality of Time
concerning property numbers 1/152, 1/301, 1/630, 4/165, 2/70 and 2/32 in Time. By contrast, it has
found that, at present, the transactions relating to title numbers 1/125, 2/277, 2/278, 2/284 in Time do not
involve the granting of State aid.

The sale of title numbers 1/152, 1/301 and 1/630 to Grunnsteinen AS

ASSESSMENT

sales

By a
agreement dated 25 August 2007, Time municipality sold title numbers 1/152
(1 312 square metres), 1/301 (741 square metres) and 1/630 (1 167 square metres) in the centre of the
municipal centre of Time municipality, Bryne, to the private property developer Grunnsteinen AS. At the
time of the transaction, it appears that title number 1/152 was used as a municipal car park with 44 parking
spaces.

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Grunnsteinen did not pay any money for the properties, but undertook to build underground parking spaces
on title number 1/152, of which 65 were to be transferred to Time municipality. According to the municipal
authorities, the obligation to build the parking spaces replaces ordinary payment for the property; i.e. the
existing 44 parking spaces above ground would be compensated for by 44 new underground spaces, and
the value of the additional 21 spaces would correspond to the value of the two additional properties trans-
ferred. Norway has presented calculations according to which the value of the 21 additional parking spaces
was NOK 2 625 000, whereas the value of the two additional properties was assessed at NOK 2 516 400.
These calculations were based on a value assessment of title number 1/630, showing a price per square
metre of NOK 600, and calculations by the construction firm Skanska arriving at a cost price of
NOK 150 000 per parking space in an underground car park (excluding VAT and costs of buying/renting
the land).

If public land is sold below market value, State resources within the meaning of Article 61(1) EEA must be
deemed to have been involved and a selective advantage to have been conferred on Grunnsteinen. The
Authority takes the preliminary view that this was the case, for the following reasons:

Firstly, the buyer did not pay any money for the properties. Thus, prima facie, the transaction would seem to
involve aid, in the absence of convincing evidence to the contrary.

In that regard, the procedures laid down in the Authority's guidelines on the Sale of Land and Buildings by
public authorities do not seem to have been complied with, as no bidding round was organised and only
one of the properties transferred was assessed. In the Authority's view, this value assessment also appears to
be too superficial to meet the requirements of the guidelines.

The Norwegian authorities also claim that the transaction constitutes an exchange of real property whereby
the municipality gives three properties, including one in use as a car park, to the property developer, and
receives a higher number of underground parking spaces in return. This reasoning would seem to presup-
pose that the value assessments presented to the Authority are held to be reliable. However, as set out
above, the assessment of title number 1/630 seems to have several shortcomings. Similarly, the cost estimate
for the future underground parking spaces seems to be based exclusively on general experience, not taking
the particular characteristics of the property and the project in question into account. Thus, the transaction
does not seem to have taken place on market terms.

If this were to be confirmed, Grunnsteinen's position would also be strengthened compared with that of its
competitors. Moreover, the land might have been of interest for buyers established in other EEA States. The
Authority's preliminary view is therefore that the transaction is capable of distorting competition and
affecting intra-EEA trade.

State aid within the meaning of Article 61(1) EEA therefore seems to be present.

The sale of title number 4/165 to Bryne Industripark AS

On 31 August 2005, Time municipality and the private property developer Bryne Industripark AS signed a
sales agreement concerning title No 4/165 at Håland in Time. The title comprises 56 365 square metres of
industrial land, and the sales price was fixed at NOK 4,7 million (or approximately NOK 83 per square
metre).

Neither a public bidding round nor a value assessment was organised prior to the sale. The price seems to
have been calculated on the basis of the price at which Time municipality bought the property in 1999, to
which capital costs, regulatory work and administrative costs were added. However, in October 2006 the
municipality decided that industrial land, for the future, should be sold at market price, as the method
applied so far would seem to lead to land being sold off too cheaply.

Against that background, the Authority takes the preliminary view that the land was sold below market
value, and that State resources within the meaning of Article 61(1) EEA must be deemed to have been
involved and a selective advantage to have been conferred on Bryne Industripark. If it were to be confirmed,
Bryne Industripark's position would also be strengthened compared with that of its competitors. Moreover,
the land might have been of interest for buyers established in other EEA States. The Authority's preliminary
view is, therefore, that the transaction is capable of distorting competition and affecting intra-EEA trade.

State aid within the meaning of Article 61(1) EEA therefore seems to be present.

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The sale of title numbers 2/70 and 2/32 to Bryne fotballklubb

By agreement dated 8 August 2003, Time municipality transferred the title to Bryne stadium,
title
numbers 2/32 and 2/70, an area of approximately 53 000 square metres, to Bryne fotballklubb (Bryne FK),
a local football club currently playing in the 1st division (i.e. below the Premier League).

As the club did not pay any money for the land, the Authority takes the view that State resources within the
meaning of Article 61(1) EEA must be deemed to have been involved and a selective advantage to have
been conferred on Bryne FK. The Norwegian authorities have argued that Bryne FK is not an undertaking
for the purposes of the EEA Agreement. However, from Bryne FK's homepage it appears that the club is,
inter alia, active in selling and buying professional players, providing entertainment in the form of football
matches and in offering advertising space in return for payment. Such activities would seem to qualify as the
provision of services on a market and therefore to be economic in nature. The Authority therefore takes the
preliminary view that Bryne FK constitutes an undertaking for the purposes of Article 61(1) EEA.

The transaction strengthens Bryne FK's position compared with that of its competitors. Moreover, the land
might have been of interest for buyers established in other EEA States. The Authority's preliminary view is,
therefore, that the transaction is capable of distorting competition and affecting intra-EEA trade.

State aid within the meaning of Article 61(1) EEA therefore seems to be present.

COMPATIBILITY

The information available to the Authority does not seem to indicate that any aid was granted to promote
the economic development of areas where the standard of living is abnormally low or where there is serious
underemployment, to promote a project of common European interest or to facilitate the development of
certain economic activities. Moreover, any aid granted to the sports club would not seem to promote
cultural development. Against that background, Article 61(3)(a)-(c) EEA appears to be inapplicable.

PROCEDURAL REQUIREMENTS AND RECOVERY OF UNLAWFUL AID

Article 1(3) in Part I of Protocol 3 to the Surveillance and Court Agreement constitutes a standstill obliga-
tion. Article 14 in Part II of that Protocol provides that, in the event of a negative decision, all unlawful aid
may be recovered from the beneficiary.

CONCLUSION

In light of the foregoing considerations, the Authority decided to open the formal investigation procedure in
accordance with Article 1(2) of Part I of Protocol 3 to the Surveillance and Court Agreement with regard to
the property transactions engaged in by the municipality of Time concerning property numbers 1/152,
1/301, 1/630, 4/165, 2/70 and 2/32 in Time.

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EFTA SURVEILLANCE AUTHORITY DECISION

No 717/07/COL

of 19 December 2007

on the property transactions engaged in by the municipality of Time concerning property numbers
1/152, 1/301, 1/630, 4/165, 2/70, 2/32, 1/125, 2/277, 2/278, 2/284 in Time

(NORWAY)

THE EFTA SURVEILLANCE AUTHORITY,

HAVING REGARD TO the Agreement on the European Economic
Area (1),
in particular to Articles 61 to 63 and Protocol 26
thereof,

HAVING REGARD TO the Agreement between the EFTA States on
the establishment of a Surveillance Authority and a Court of
Justice (2), in particular to Article 24 thereof and Article 1(2)
and (3)
II of
Protocol 3 thereof,

I and Articles 4(4) and 6(1)

in Part

in Part

HAVING REGARD TO the Authority's Guidelines (3) on the appli-
cation and interpretation of Articles 61 and 62 of the EEA
Agreement, and in particular the Chapter relating to the Sale of
Land and Buildings by public authorities,

Whereas:

I. FACTS

1. PROCEDURE

On 3 March 2007, the Authority received a complaint from an
association named Aksjonsgruppa ‘Ta vare på trivelige Bryne’
(hereinafter referred to as ‘Aksjonsgruppa’), concerning the sales
of property numbers 1/152, 1/301, 1/630, 4/165 in Time
municipality by the municipal authorities to two different
private entities, as well as the sale of title number 2/70 (Bryne
stadium which also includes title No 2/32) by Bryne fotballk-
lubb, previously given to the club by the municipality, to a
private investor (Event No 414270).

By letter dated 9 May 2007, the private investor Mr Gunnar
Oma sent a complaint to the Authority concerning the sale
by Time municipality of one of the abovementioned properties,
i.e. number 4/165. Mr Oma claimed that the sale had taken
place without prior value assessment and without an uncondi-
tional tendering procedure (Event No 421805).

By letter dated 25 May 2007 (Event No 1080978),
the
Authority invited the Norwegian authorities to comment on the
complaints and requested additional information. In addition to
the property numbers mentioned above,
the Authority also
asked questions concerning the purchase by Time Municipality
of a property to be used for the construction of a new high
school (title numbers 1/125, 2/277, 2/278 and 2/284), next to

(1) Hereinafter referred to as the EEA Agreement.
(2) Hereinafter referred to as the Surveillance and Court Agreement.
(3) Procedural and Substantive Rules in the Field of State Aid — Guidelines
on the application and interpretation of Articles 61 and 62 of the EEA
Agreement and Article 1 of Protocol 3 to the Surveillance and Court
Agreement, adopted and issued by the EFTA Surveillance Authority on
19 January 1994, published in OJ L 231, 3.9.1994, EEA Supplement
No 32, 3 September 1994, last amended by the Authority's Decision
No 154/07/COL, hereinafter referred to as the State Aid Guidelines.

Bryne stadium. The sale had been the subject of articles in the
local press which were enclosed with the complaint.

By letter dated 19 June 2007 (received by the Authority on
22 June 2007, Event No 426448), Time pensjonistparti
complained about the exclusive right granted to Forum Jæren
to the development of 200 underground
AS with respect
parking spaces at the property in the centre of the Bryne to be
used for the construction of a new upper secondary school (title
numbers 1/125, 2/277, 2/278 and 2/284) (4). According to the
complainant, 180 of the parking spaces were to be used by
Forum Jæren.

from the
By letter dated 3 July 2007 (Event No 427879)
Norwegian Government,
the
Authority on 3 July 2007, Norway replied to the information
request.

received and registered by

By letter of 28 July 2007, Aksjonsgruppa submitted comments
to the Norwegian authorities' reply, received and registered by
the Authority on 30 July 2007 (Event No 437440).

By e-mail dated 7 September 2007 (Event No 439975),
Aksjonsgruppa submitted an agreement between Rogaland
county municipality and Time municipality regarding the devel-
opment and use of the property to be used as a new upper
secondary school
(title numbers 1/125, 2/277, 2/278, and
2/284) (Event No 439974), which included a clause whereby
the County Municipality agreed to grant Forum Jæren the right
to develop 200 parking spaces under the new secondary school,
as well as the exclusive right to use 180 thereof.

By e-mails dated 19 September 2007 (Event Nos 442381,
442382 and 442383), the complainant submitted press reports
regarding the land sales. Finally, by e-mail dated 2 October
2007 (Event No 445092), the complainant submitted an audit
carried out by external auditors (Deloitte) of Time municipality's
sales of
(Event
No 445091).

land and buildings over

last years

the

By letter of 23 October 2007 (Event No 448109), the Authority
invited the Norwegian authorities to comment on the third
complaint in the case (from Time Pensjonistparti) and requested
additional
agreements
concerning the construction of a new upper secondary school
and the rights conferred on Forum Jæren in that respect.

information with respect

to the

(4) The property numbers referred to in the complaint are 1/125, 2/25,
2/274, 2/277, 2/278 and 2/288. Attempts have been made to check
this with the complainant, but a clear answer could not be obtained
(e-mails from the case handler of 19 October 2007 and Reply from
Time Pensjonistparti of 22 October 2007, Event Nos 447785, 447999
and 448000). Based on the description of the properties in the
complaint, the Authority, nevertheless, takes the view that the property
referred to must be the property on which a new upper secondary
school is to be constructed, i.e. title numbers 1/125, 2/277, 2/278
and 2/284.

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By letters of 21 and 22 November (Event Nos 453220 and
453452), the Norwegian authorities replied to the Authority's
request.

2. DESCRIPTION OF THE TRANSACTIONS

2.1. The sale of title numbers 1/152, 1/301 and 1/630 to

Grunnsteinen AS

By a sales agreement dated 25 August 2007, Time municipality
sold title numbers 1/152 (1 312 square metres), 1/301
(741 square metres) and 1/630 (1 167 square metres) in the
centre of Bryne, the municipal centre of Time municipality, to
the private property developer Grunnsteinen AS. Clause 1 of
the contract (1) states that the properties, at the time of entering
residential and public
into the contract, were zoned for
road/parking purposes. On title number 1/152,
there were
44 municipal parking spaces belonging to Time municipality.

replaces ordinary payment

Under Clause 1 of the contract, Grunnsteinen AS undertakes to
build underground parking spaces on title number 1/152, of
which 65 are to be transferred to Time municipality upon
completion (clauses 1 and 5 of the agreement). Grunnsteinen
did not pay anything for the property; however, according to
the municipal authorities, the obligation to build the parking
the property (2). At
spaces
present, none of the titles have been transferred to Grunnsteinen
AS; however, Clause 7 of the agreement foresees that the titles
should be transferred upon completion of the parking spaces, at
the latest by the end of 2008. Furthermore, Clause 1 foresees
that the underground car park will be registered as a separate
title in the land register when re-transferred to Time Munici-
pality.

for

The initiative to enter into the agreement appears to have been
taken by the buyers, and no public bidding round was organised
prior to the sale (3). According to the municipal authorities, the
payment for title No 1/152 consisted of the 44 parking spaces
on the property being compensated for in the underground car
park. As for title numbers 1/301 and 1/630, the municipality
had commissioned a value assessment of one of the properties,
title No 1/630, which the municipality claims were assessed by
Eiendomsmegler 1. Only the assessment of
title No 1/630,
the market value was NOK 600 per
which concluded that
square metre, has been presented to the Authority (4). However,
reservations were expressed with respect to the size of the area,
to any encumbrance on the title in the property register and to
zoning regulations, as none of these had been checked. The
Norwegian authorities have also presented calculations made by
the construction firm Skanska Norge AS, showing that the price
for a parking space in an underground car park would be
approximately NOK 150 000, excluding VAT and costs of
buying/renting the land (5). On the basis of these estimates, the

(1) Norway's reply to the Authority's first request for information (Event

No 427879, Annex 1).

(2) Norway's reply to the Authority's first request for information (Event

No 427879), Question 1(e).

(3) Norway's reply to the Authority's first request for information (Event

No 427879), reply to question 1(e).

(4) Norway's reply to the Authority's first request for information (Event
No 427879, Annex 2). In Norway's reply, it is claimed that the value
assessment concerned title numbers 1/301 and 1/630. However, this is
not reflected in the actual assessment, neither does the number of
square metres stated therein indicate that both properties have been
taken into account.

(5) Norway's reply to the Authority's first request for information (Event

No 427879, Annex 5).

Norwegian authorities claim that
the market price for title
numbers 1/301 and 1/630, based on the value assessment,
would be NOK 2 516 400 (6), whereas
the
additional 21 parking spaces which Grunnsteinen will build for
the municipality is estimated to 2 625 000 (7). Thus,
the
municipality claims that the value of these two properties is
fully compensated by Grunnsteinen through the construction of
21 additional parking spaces.

the value of

2.2. The sale of title number 4/165 to Bryne Industripark

AS

On 31 August 2005, Time Municipality and the private prop-
erty developer Bryne Industripark AS signed a sales agreement
concerning title No 4/165 at Håland in Time (8). The title
comprises 56 365 square metres of industrial
land, and the
sales price was set at NOK 4,7 million (or approximately
NOK 83 per square metre). At the time of the signing of the
agreement, the area was zoned for industrial purposes but the
detailed zoning plan was not adopted due to objections from
the public road administration. According to the municipal
authorities, the new detailed zoning regulations are expected to
be adopted in autumn 2007. The contract contains a claw-back
clause (Clause 7) for Time municipality in the event that the
property has not been built on or put to use 5 years after the
date of taking possession.

the time of entering into the agreement,

At
the property
consisted of undeveloped land. In the memorandum for the
municipal council which approved the agreement, the municipal
the conclusion of a development
administration states that
agreement should be a condition for selling the land. However,
for the time being, no such agreement has yet been entered
into, since detailed zoning regulations for the area have not yet
been adopted.

The municipality confirms that no public bidding round was
organised prior to the sale, which came about following an
initiative from the buyer. However, it claims that the availability
of industrial land in the area in question was advertised on its
web page in 2003-2004. A value assessment was not carried
out prior to the sale. It follows from the administrative memor-
andum made in relation to the sale that the price charged was
based on the price at which Time municipality bought the prop-
to which capital costs, regulatory work and
erty in 1999,
administrative costs were added. The price was, thus, established
in accordance with the municipality's general principle for the
sale of industrial properties, i.e. selling at cost (9).

According to the complainant, the price per square metre for
this type of property should be in the range of NOK 400. This
is based on a claim that an independent asset valuer assessed
the property in January 2007 (10). However, no documentation
has been submitted to this effect. In contrast, the municipal
authorities claim that other industrial properties were sold, in
the same period, for prices ranging between NOK 80 and 115

(6) This appears to be based on a value of NOK 600 per square metre plus
the value of a building on title No 1/301. The Authority has not been
presented with a valuation of the building.

(7) This

is based on the Municipality's original cost estimate of
NOK 125 000, set out in the background papers for the deliberations
in the municipal council (Event No 413558, pp. 16-17). The estimate
by Skanska appears to have been obtained at a later stage.

(8) Event No 413558, p. 19 et seq.
(9) Event No 413558, pp. 16-17.
(10) See
Event No

repeated
Aksjonsgruppa's comments to Norway's reply, Event No 477440.

413558 (original

complaint),

in

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agreement,

sold a major part of

per square metre in the area, and enclose contracts concerning
such properties (1). It also claims that Bryne Industripark, by
verbal
the property
(50 000 square metres) to Jæren Arena for the purpose of
building a new football stadium in March 2007, at a price of
NOK 100 per square metre (2). No documentation of the actual
price has
to the
complainants, the same investors hold financial interests both in
Bryne Industripark AS and Jæren Arena, and a possible
transaction therefore cannot be assumed to have taken place on
normal commercial terms.

been provided. Moreover,

according

2.3. The sale of title numbers 2/70 and 2/32 to Bryne
fotballklubb and the subsequent transfer of the prop-
erty to Forum Jæren AS

By agreement dated 8 August 2003, Time municipality trans-
ferred the title to Bryne stadium, title numbers 2/32 and 2/70,
an area of approximately 53 000 square metres,
to Bryne
fotballklubb (Bryne FK) (3). From the background papers from
the sale, it appears that the municipality had, in turn, bought
the land from the football club for NOK 1 million in 1996. The
Authority has no further information on this sale.

Bryne FK is a local
football club, currently playing in the
so-called ‘Adecco League’ (1st division). In addition to Bryne FK,
which is registered in the company register as a non-profit orga-
nisation (4), the football club has also set up a limited company,
Bryne Fotball AS. The information provided by the Norwegian
authorities with respect
relationship
between Bryne FK and Bryne Fotball AS is not very extensive;
however, from the annual report of Bryne FK, it appears that
the company was created to take care of the club's aim of
promotion to the Norwegian Premier League. It also seems that
Bryne FK is the main shareholder in the company and paid its
debts in 2006. It appears that the sports activities,
including
those of the elite team aiming for promotion to the Premier
League take place within Bryne FK (5).

to the organisational

Before the transfer of the title to the land, the football club had
a ground lease agreements with the municipality for
its
buildings on title numbers 2/70 and 2/32, which included the
stadium, a club house and a sports hall (6). Thus, the agreement
of 8 August 2003 only concerns ownership of the land, not to
the buildings. One building not belonging to Bryne fotballklubb
appears to remain on the land, and it was foreseen that the club
the lease
would take over
agreement with the owner of the building (7). Under Clause 2 of
the agreement, title numbers 2/32 and 2/70 are transferred to
Bryne FK without remuneration.
is also provided in the
agreement that the municipality covers all costs connected to

the municipality's rights under

It

(1) Norway's reply to the Authority's first request for information (Event

No 427879, Annexes 13-17).

(2) See Article from the local newspaper Jærbladet of 28 March 2007,

referring to this price.

(3) Event No 413558, p. 29 and Norway's reply to the Authority's first

request for information (Event No 427879, Annex 29).

(4) Norway's reply to the Authority's first request for information (Event

No 427879, Annex 21).

(5) Norway's reply to the Authority's first request for information (Event

No 427879, Annex 22).

(6) The ground lease agreements provided by Norway, Annexes 18 and 19
to Norway's reply to the Authority's first request for information (Event
No 427879).

(7) See Annex 24 to Norway's reply to the Authority's first request for

information (Event No 427879).

the transfer of the property, such as parcelling, measuring etc.
The titles comprise approximately 53 000 square metres, and it
is expressly provided that it shall, primarily, be used for sports
purposes.

It follows from Clause 1 of the agreement that the background
for the transfer of the titles was that the football club had asked
for such transfer due to the fact that it needed to increase its
assets in order to comply with requirements laid down by the
Norwegian football association for football pitches to be used
for matches in Tippeligaen (the Norwegian Premier League).
From the background memos, it seems to have been essential
that the property may be used as security for debts, and it is
mentioned that the provision that it may only be used for
sports purposes may somewhat reduce its accounting value.

The complainant claims that, in 2007, Bryne FK plans to sell
the stadium to Forum Jæren for NOK 50 million. This appears
to have taken place at the same time as the football club bought
a property for the construction of a new stadium at Håland
from Bryne Industripark AS (a sale referred to above). In reply
the Norwegian
information,
for
to the Authority's request
authorities have confirmed that a letter of
intent has been
signed between Bryne FK and Forum Jæren concerning title
No 2/70. However, the municipal authorities were unable to
produce a copy thereof and the Authority therefore has had no
confirmation of either the price mentioned or the possible exis-
tence of a binding agreement.

2.4. The

purchase

by Time municipality

title
numbers 1/125, 2/277, 2/278 and 2/284 for
the
purpose of building a new upper secondary school
and the right to underground parking facilities granted
to Forum Jæren

of

total

17 990

approximately

On 4 January 2007, Time Municipality and Forum Jæren
entered into an agreement (8) whereby Time Municipality
bought title numbers 1/125, 2/277, 2/278 and 2/284 in Time,
in
for
NOK 59,5 million (i.e. NOK 3 307 per square metre). The
municipality has confirmed that no value assessment was
carried out of
the
contract. It is claimed that the price had been based on Forum
Jæren's purchasing costs (9). The contract also stipulates that it is
Forum Jæren's responsibility to prepare the land for construc-
tion, i.e. to demolish existing buildings and foundations, etc.

the property prior to the conclusion of

square metres,

the county municipalities are responsible for
In Norway,
running upper secondary schools (10); however,
it is common
practice that
the land on which the buildings are to be
constructed is offered by the municipalities free of charge. As
stated in Clause 2 of the agreement, the property is to be used
for the construction of a new upper secondary school. On
13 August 2007, the municipality effectively entered into an
agreement with Rogaland County Municipality concerning the
construction of the upper secondary school (11). Clause 3 of the

(8) Norway's reply to the Authority's first request for information (Event

No 427879, Annex 26).

(9) Norway's reply to the Authority's first request for information (Event

No 427879).

(10) See the Act relating to Education of 17 July 1998, No 61, Section 13-3.
(11) Agreement between Time Municipality and Rogaland County Munici-
pality relating to the construction of a new upper secondary school,
Event No 439974.

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the time of conclusion of

agreement provides that, on the condition that
the county
municipality will not need more parking spaces than expected
at
the county
municipality accepts that Forum Jæren may cover its need for
in an underground car park comprising
parking spaces
200 spaces in total,
the school
buildings. The county municipality will be entitled to 10 per
cent of the surface of the underground car park.

to be constructed under

the agreement,

However, since Forum Jæren has been granted an extension of
its deadline for compliance with the zoning requirements for
parking spaces (1 parking space per 100 square metres) until
31 December 2008, no agreement has yet been entered into
between Forum Jæren and Rogaland County municipality
governing Forum Jæren's rights on the property. According to
the Norwegian authorities, neither does the agreement between
the municipality and the county municipality confer a legally
enforceable right on Forum Jæren. The Norwegian authorities
underline, in this context, that Forum Jæren did not take part in
the negotiations prior to the conclusion of
the agreement.
Finally, Norway also takes the view that a separate agreement
lying down, in detail, the conditions for Forum Jæren's right to
use the property for parking purposes would be necessary at a
later point (1).

3. COMMENTS BY NORWAY

Norway was invited to comment on the complaints in the
Authority's requests for information, and did so in its replies.
The replies were drafted by Time municipality and the Govern-
ment did not provide additional comments.

Concerning the first of the transactions mentioned above, the
Norwegian authorities claim, in essence, that the transfer of title
numbers 1/152, 1/301 and 1/630 without remuneration does
not amount to aid since it should be considered as an exchange
of real property. In fact, the municipality's 44 parking spaces
above ground will be exchanged for parking spaces in an under-
ground car park. With respect to title No 1/301 and 1/630, it is
claimed that, based on the value of these two properties in
comparison with the cost estimates of parking spaces in under-
ground car parks in similar projects, the value of the increase in
the number of parking spaces (21) which the municipality will
get as a result of the deal more than covers the value of the
properties transferred. Against this background, the Norwegian
authorities take the view that no aid is granted, irrespective of
the fact that title No 1/152 was not valued. It is also claimed
that, in the event that aid is present, it would be de minimis aid.

As for the sale of title No 4/165 to Bryne Industripark AS,
Time municipality claims that, irrespective of the fact that no
value assessment was made and that the property in question
appears to have a very attractive location, the price per square
metre corresponds to the market price. This is due to specific
difficulties pertaining to the property:
inter alia,
objections to the zoning plan, which, therefore, had not yet
been adopted, and the property was difficult to exploit effi-
ciently due to the construction prohibition in proximity to the
railway. Furthermore,
industrial
properties in the municipality were recently sold at prices
which, per square metre, roughly correspond to the price paid
by Bryne Industripark.

is claimed that equivalent

there were,

it

With respect to the sale of Bryne stadium to Bryne FK, the
Norwegian authorities argue that the buyer, Bryne FK, is not an
undertaking within the meaning of the EEA Agreement, but a
non-profit organisation and a sports club. Consequently, the
Norwegian authorities take the view that Article 61 EEA does
not apply to the transaction regardless of whether or not it
confers an economic advantage on the buyer.

With respect to the titles which are to be used for the construc-
tion of an upper secondary school and Forum Jæren's right to
build parking spaces under the school buildings, Time munici-
pality claims that no legally binding agreement has yet been
entered into with Forum Jæren. It was always the municipality's
intention that such a right could only be granted on market
conditions, but it would now be up to the County Municipality
to negotiate an agreement with Forum Jæren governing the
conditions for the construction of parking spaces.

II. ASSESSMENT

1. THE PRESENCE OF STATE AID

State aid within the meaning of Article 61(1) EEA

Article 61(1) of the EEA Agreement reads as follows:

‘Save as otherwise provided in this Agreement, any aid granted by
EC Member States, EFTA States or through State resources in any
form whatsoever which distorts or threatens to distort competition
by favouring certain undertakings or the production of certain
goods shall,
in so far as it affects trade between Contracting
Parties, be incompatible with the functioning of this Agreement’.

It follows from this provision that, for State aid within the
meaning of the EEA to be present, the following conditions
must be met:

— the aid must be granted through State resources,

— the aid must favour certain undertakings or the production
of certain goods, i.e. the measure must confer an economic
advantage upon the recipient(s), which must be selective,

— the beneficiary must be an undertaking within the meaning

of the EEA Agreement,

— the aid must be capable of distorting competition and affect

trade between contracting parties.

Whether these conditions are met must be assessed individually
with respect to each of the transactions described above.

1.1. The sale of title numbers 1/152, 1/301 and 1/630 to

Grunnsteinen AS

The presence of State resources

The term ‘State resources’ covers all aid granted from public
sources, including municipalities. Aid granted by Time munici-
pality would thus fall within the definition. If public land is sold
below market value, State resources are present (2).

In the case at hand, the buyer did not pay any money for the
properties. Thus, prima facie, the transaction would seem to
involve aid, and it would be for the Norwegian authorities to
rebut that presumption.

(1) Norway's reply to the Authority's second request for information

(2) Case T-274/01, Valmont Nederland BV v Commission,

[2004]

(Event Nos 453220 and 453452).

ECR II-3145, paragraphs 44-45.

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The Norwegian authorities argue that the buyer did pay a ‘price’
for the properties by taking on the obligation to build an under-
ground car park in which the municipality would be entitled to
65 parking spaces. Thus, what remains to be considered is
whether it can established, either in application of the proce-
dures described in the State aid guidelines or by other methods,
that the transaction therefore took place on market terms.

The Norwegian authorities have confirmed that the sale of the
properties was not announced publicly, but came about
following an initiative from Grunnsteinen. Thus, no uncondi-
tional bidding procedure (which could, theoretically, have led to
a very low, or even no value being paid, given the obligation to
provide parking spaces) within the meaning of the Guidelines
took place.

Concerning sales without an unconditional bidding procedure,
for the presence of State aid to be
the Guidelines require,
excluded on this basis, that ‘an independent evaluation should be
carried out by one or more independent asset valuers prior to the sales
negotiations in order to establish the market value on the basis of
indicators and valuation standards. The
generally accepted market
market price thus established is the minimum purchase price that can
be agreed without granting State aid’.

In the case at hand, since the payment consists of the construc-
tion of 65 underground parking spaces for public use, in order
for State aid to be excluded on the basis of the guidelines, a
value assessment of the properties would have to be undertaken,
and the market price of the parking spaces would have to be
established in a reliable manner.

for

least

sold,

that at

is clear

the properties

As
title
it
number 1/152 was not assessed at all. The Norwegian authori-
ties claim that both title numbers 1/301 and 1/630 were
valued; however, only the assessment of title number 1/630 has
been forwarded to the Authority on request. Thus, the proce-
dure laid down for establishing the market price through inde-
pendent value assessment cannot, under any circumstances, be
considered to have been complied with. Moreover, since the
properties were transferred en bloc, a value assessment should
cover all three properties taken together. With respect to the
title(s) which w(as)(ere) actually valued, the Authority has not
been assured that it took place in accordance with the guide-
lines, which require that the market value should be established
on the basis of generally accepted indicators and valuation stan-
dards. In the valuation by Eiendomsmegler 1, it is merely stated
that the valuation is ‘carried out in accordance with our best judge-
ment and conviction, on the basis of a visit of the property and infor-
mation provided by the seller’. However, the valuation does neither
set out the characteristics of the property which were decisive
for the conclusion, nor the method applied, for example one of
the methods recommended by the Norwegian Valuers And
Surveyours Association (‘Norges Takseringsforbund (NTF)’)
for
commercial property (1). In the view of the Authority, the valua-
tion carried out by Eiendomsmegler 1 does not give sufficient
information for the Authority to ascertain that it was carried
out in accordance with generally accepted indicators and valua-
tion standards.

Concerning the value of
the parking spaces which the
municipality will receive in remuneration for the properties, the
Norwegian authorities have enclosed estimates made by the

(1) The Authority has previously held that these standards fulfil the
requirements of the Guidelines, ref. Decision No 170/05/COL on the
sale of the University Library Building and Part of Adjacent Property in
Oslo.

construction firm Skanska Norge AS, arriving at NOK 150 000
per parking space. The Authority also notes that the estimates
are subject
to the reservation that building costs will vary,
depending on a range of factors such as size, location, proximity
to roads, lifts, fire security, etc., and also that ‘price will further
depend on working methods, timing and market situation’. Although
the guidelines on expert evaluation are not directly applicable to
the valuation of
the Authority is not
convinced that the evaluation by Skanska was carried out in a
reliable manner. In particular, the calculations presented seem to
have be carried out exclusively on the basis of experience from
other projects and, thus, do not seem to take sufficient account
of the characteristics of the specific property in question in
order to be suitable for establishing the market price.

the future car park,

Against this background, the presence of aid cannot be excluded
on the basis of, or by analogy to, the guidelines.

The Norwegian authorities also seem to argue that the presence
of aid can be excluded on other grounds. In particular, they
claim that the transaction is in fact an exchange of property,
and that the fact that title No 1/152 was not valued is therefore
irrelevant. The argument seems to be based on the idea that,
since the 44 public parking spaces currently occupying title
number 1/152 will be replaced by underground parking spaces,
the municipality keeps what it had before entering into the
title No 1/152 above
contract. Concerning exploitation of
ground, this area will now be regulated as a green area and thus
will have no independent market value.

It must be assessed whether these arguments are capable of
excluding the presence of State aid. In that regard, what remains
to be considered is the market value of the property transferred
the contract (2). Thus, the
at the time of the conclusion of
subjective value of the land for the municipality when used as a
car park does not establish the market price as long as the land
could also be exploited for different purposes. At the time of
the contract, this seems to have been the case, and the possibi-
lity for alternative (and more profitable) uses must, therefore, be
the basis for the calculation of the market price. The Authority
takes the view that, even if parts of title number 1/152 might,
more than two years later, be zoned as a green area, what must
be assessed is what use of the properties (if sold together) poten-
tial buyers could expect at the time of the transaction.

Secondly, this argument seems to presuppose that the valuations
of the two other titles and the parking spaces are acceptable, so
that the value of the parking spaces equals or exceeds the value
of the two additional titles. As shown above, the Authority has
not found the calculations presented to it convincing.

Against this background, the Authority has serious doubts that
the ‘price’ paid for the property reflected its market value.

Favouring certain undertakings or the production of certain goods

Firstly, the measures must confer on Grunnsteinen AS advan-
tages that relieve it of a financial burden that it would normally
have to cover from its budget (in this case, any additional price
payable for the land in question). Secondly, the measure must
be selective in that it favours ‘certain undertakings or the production
of certain goods’.

(2) See Case T-366/00, Scott SA v Commission, judgment of 29 March 2007

(not yet reported), paragraph 106.

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If, and to the extent that, the price paid for the properties does
not reflect their market value, Grunnsteinen obtains an advan-
tage in the form of a lower purchase price which it would
the
its own budget. Equally,
normally have to pay out of
measure would be selective since it only benefits the buyer.

The measures must distort competition and affect trade between the
Contracting Parties

Under settled case law, the mere fact that an aid strengthens a
firm's position compared with that of other firms competing in
intra-EEA trade, is enough to conclude that the measure is likely
to affect
trade between the contracting parties and distort
competition between undertakings established in other EEA
States (1). If, and to the extent that, the transaction confers an
economic advantage on Grunnsteinen, its position is strength-
ened in comparison with that of its competitors. Since the prop-
erty in question appears to be centrally located commercial land
which is, consequently, attractive,
it might be of interest not
only to Norwegian firms, to the effect that firms established in
other EEA States may have been affected by the transaction.
Moreover, the Norwegian buyers might be professional property
investors who are active in Norway and other EEA States alike.
Thus,
it appears that the transaction may threaten to distort
competition and affect trade within the EEA.

The Authority considers it possible that the economic advantage
conferred on Grunnsteinen through the transaction could be
de minimis (i.e. EUR 100 000 over a three-year period at the
material time (2)) and as such not distort competition and affect
trade within the EEA. However, in the absence of reliable value
assessments, the Authority cannot establish with certainty that
such is the case.

1.2. The sale of title number 4/165 to Bryne Industripark

AS

The presence of State resources

As described above, the land in question consists of more than
56 000 square metres of industrial land outside Bryne. No value
assessment was carried out prior to the sale. The municipality
states that the land was offered on its web page for some time,
but it is unable to retrieve the announcement from its system,
and the Authority therefore cannot verify its content. In any
event, it is doubtful that a notice on a web page would qualify
as a sufficiently well publicised offer within the meaning of the
Guidelines. Against this background, the procedures described
in the Authority's State aid Guidelines on the sale of land and
buildings do not seem to have been followed and the presump-
tion that aid is not present therefore does not apply.

The municipality has explained that property was sold at cost,
i.e. at a price calculated by adding regulatory and administrative
costs, capital costs and fees to the price for which the property
was bought in 1999. As a preliminary point, the Authority
notes that sales of public land at cost cannot exclude the
presence of State aid, as this price calculation method does not
take sufficient account of all the various factors which may

(1) See Case 730/79, Philip Morris Holland BV v Commission, [1980] ECR
p. 2671, paragraphs 11-12 and Joined Cases E-5/04, E-6/04 and
E-7/04, FESIL, Finnfjord, PIL and Others, and the Kingdom of Norway v the
Authority, paragraph 94.

(2) See Article 2(2) of Commission Regulation (EC) No 69/2001, incorpo-
rated into the EEA Agreement by Joint Committee Decision
No 88/2002 (OJ L 266, 3.10.2002, p. 56 and EEA Supplement No 49,
3 October 2002, p. 42), e.i.f. 1 February 2003.

influence a property's market value, in particular the supply and
demand on the market at the time of the sale (3). Moreover, in
this case, there seems to have been no adjustment for inflation.

In the case at hand, sales at cost was the general policy of the
municipality at the time. However, by decision of 18 October
2006 (4), the municipality decided that land at Bryne, including
Håland, should for the future be sold at market price. In the
background memo for the decision, the municipality stated that
industrial
land at Bryne had become scarce and that land at
Håland would be ‘cheap if we sell at cost’. The memo also states
that one of the reasons for the transition to the market price
principle was to ensure that ‘[i]ndustries which require large areas
but are not labour intensive will find the land too expensive and estab-
lish themselves elsewhere’. Thus, it seems to have been expected
that the market price would be higher than the cost price which
was applied in the sale to Bryne Industripark.

the appropriate price for

The Norwegian authorities have argued that the price is compar-
able to the sales price of similar land sold in the area in the
same period (5). The Authority accepts that such comparisons
might give an indication of
the
land (6). However, the Authority has doubts as to the relevance
of the prices presented as it has not been presented with facts
which demonstrate that the land plots in question are suffi-
ciently comparable to the land sold to Bryne Industripark. All
inter alia, considerably smaller than title
areas in question are,
No 4/165 and the Norwegian authorities have not provided
details of their location showing that they are as attractive as
title No 4/165. Moreover, all the properties referred to are
stated to be unregulated in the sales contracts. By contrast, at
the time of the sale, a zoning plan for the area sold to Bryne
Industripark had been adopted on 5 June 2004. The Norwegian
authorities state that objections from the Public Roads Adminis-
tration seemed to make adjustments necessary. It is unclear to
the Authority whether these objections were received before or
after the sale to Bryne Industripark. In any event, the agreement
refers to the detailed zoning plan adopted in 2004 and the
property, therefore, does not seem to have been sold as unregu-
lated. The relevance of comparing the land to areas which were
unregulated can thus be questioned (7).

Against this background, the Authority has serious doubts that
the cost price at which title No 4/165 in Time was sold corre-
sponded to the property's market value at the time of the sale.

Favouring certain undertakings or the production of certain goods

If, and to the extent that, the price paid for the title No 4/165
does not reflect its market value, Bryne Industripark obtains an
advantage in the form of a lower purchase price, thus avoiding
costs which it would normally have to pay out of its own
budget. Equally, the measure would be selective since it only
benefits the buyer.

(3) Case T-366/00, Scott (cited above), paragraph 106.
(4) Decision No KS-075/06, forwarded by the complainant (Annex 3 to

Event No 437440).

(5) Land sale agreements attached as Annexes 13-17 to Norway's reply to

the Authority's first request for information, (Event No 427879).

(6) Case T-366/00, Scott (cited above), paragraph 116.
(7) It may also be noted that it follows from the sales agreements that it
was considered to be highly likely that the areas were of archaeological
interest and that the ground would, therefore, have to be explored
before any development could take place, see Norway's reply to the
information (Event No 427879,
Authority's
Annexes 13, 14 and 15. This does not seem to be the case with respect
to the title No 4/165, see Norway's reply to the Authority's first request
for information (Event No 427879, Annex 8).

request

first

for

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The measures must distort competition and affect trade between the
Contracting Parties

As set out above, the mere fact that an aid strengthens a firm's
position compared with that of other firms, which are competi-
tors in EEA trade, is enough to conclude that competition is
distorted and intra-EEA trade is affected. If, and to the extent
that, Bryne Industripark bought the land below market price, its
position is strengthened compared with that of its competitors.
In the case at hand, the property in question appears to be
industrial
interest to a variety of activities.
Accordingly, it may well be of interest not only to Norwegian
firms. Moreover, the Norwegian buyers might be professional
property investors who are active both in Norway and other
EEA States.

land of potential

Thus, the transaction may threaten to distort competition and
affect trade within the EEA.

1.3. The sale of title numbers 2/70 and 2/32 to Bryne FK

The presence of State resources

As described above, the stadium was transferred to Bryne foot-
ball club in 2003 for NOK 0. At the time, Bryne FK had two
lease agreements with the municipality on title numbers 2/70
and 2/32, concerning, respectively, a grandstand for football and
a clubhouse, and a sports hall (1). Furthermore, a company
called Stadion Trim & Bowling AS had a lease contract for a
sports building for 99 years from 1997. It also appears that
Bryne Friidrettsklubb (Bryne Athletics) had certain rights of use
to the stadium prior to the transfer of the ground to Bryne FK,
and that these rights had to be waived before the transfer could
be implemented.

The existence of long term lease agreements and special rights
of use may lead to the value of the land being reduced if sold to
a third party. However, it is implausible that the property would
have no market value at all, inter alia because such special rights
might be waived at a later stage. This would seem to be demon-
strated by recent events:
the sports club has now
In fact,
decided to move its stadium and, thus, to sell the property in
question. Norwegian authorities have confirmed that no value
assessment was carried out of the property prior to the sale.

Against this background, the Authority has strong doubts that
the property was transferred at market price and, thus, that no
State resources were involved.

Favouring certain undertakings or the production of certain goods

the
the presence of State resources were to be proven,
If
transaction must be held to confer an advantage on Bryne FK.
The measure would, thus, be selective within the meaning of
Article 61(1) EEA.

The Norwegian authorities have claimed that Bryne FK does not
constitute an undertaking within the meaning of
the EEA
Agreement because it is a sports club and a private consumer-
oriented
purposes.
According to the Norwegian Government, the club is not active

organisation with

profit-making

no

(1) See Norway's reply to the Authority's first request for information

(Event No 427879, Annexes 18 and 19).

in commercial activities. To substantiate its position,
the
Norwegian authorities have enclosed the club's annual report,
focussing on its activities for adolescents and children.

As a starting point, the Authority notes that the concept of an
undertaking encompasses every entity engaged in an economic
activity (2). Any activity consisting in offering goods and services
on a given market is an economic activity (3). Therefore, it is
not decisive that the football club is not organised as a limited
company or that it is registered as a non-profit organisation in
the company register. The Court of Justice of the European
Communities has held that where a sporting activity takes the
form of gainful employment or the provision of services for
remuneration, which is true of the activities of semi-professional
or professional sportsmen, it constitutes an economic activity
for the purposes of Community law. Therefore,
it is subject,
inter alia, to the rules on competition (4).

in the form of

Bryne FK currently plays in the so-called Adecco league, i.e. the
1st division in Norwegian football (i.e. the division below the
Premier League). From Bryne FK's homepage, it appears that the
inter alia, active in selling and buying professional
club is,
players (5), providing entertainment
football
matches and in offering advertising space in return for
payment (6). In light of the practice of the European Commis-
sion, such activities would seem to qualify as the provision of
services on a market and therefore to be economic in nature (7).
The club's annual accounts, forwarded by the Norwegian autho-
rities, show that it had an annual turnover in the range of
NOK 28 million in 2006, of which approximately 11,6 million
was generated through sponsorship. Other major sources of
revenue include income from matches, non-sports activities,
rent income/public contributions and miscellaneous revenues.
In addition, about NOK 400 000 stemmed from membership
fees. In the view of the Authority, all these items, with the
possible exception of a part of the membership fees, seem to
have been generated through economic activity.

In light of the above, the Authority takes the preliminary view
that Bryne FK must be held to be an undertaking for the
purposes of the State aid rules of the EEA Agreement.

The measures must distort competition and affect trade between the
Contracting Parties

Provided that it is established that Bryne FK got the property
without paying the market price, it receives an advantage which
strengthens its position compared with that of its competitors,
thus threatening to distort competition. As demonstrated above,

(2) Case C-41/90, Höfner and Elser [1991] ECR I-1979, paragraph 21.
(3) Case 218/00, Cisal [2002] ECR I-691, paragraph 23.
(4) Case Case C-519/04 P, Meca-Medina and Majcen vs Commission, [2006]

ECR I-6991, paragraphs 22, 23 and 30.

(5) For example, the news archive of the club features headlines like
‘Striker on trial’ (18 March 2004),
‘Frenchman for trial’ (30 March
2004), ‘Serbian trial player at Bryne’ (2 August 2007) and ‘Icelandic
U21 player ready for Bryne’ (31 August 2007):
http://www.brynefk.no/Brynefk/index.nsf/DESIGNARKIV?openform
(6) For example, in a news item of 13 April 2007, the club states that
‘For the first time Bryne FK has received more than 12 million in mere
sponsorship money. The capacity [for advertisements] at Bryne stadium is
exhausted and in order to exceed the 12 million threshold the club has
invested in advertising rolls. The VIP stand has also been nearly sold out’.
See:
76RJ37?OpenDocument

http://www.brynefk.no/brynefk/index.nsf/DESIGNUNIK/SFUS-

(7) See paragraph 17 of the Commission's opening Decision in Case
C-49/03 (NN 51/03), Sale of land to AZ and AZ Vastgoed BV (OJ C 266,
5.11.2003, p. 8).

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Bryne FK's commercial activities appear to include, inter alia, the
selling and buying of players from clubs in other EEA States, the
offering of advertising space and the provision of entertainment
in the form of football matches. In doing so, the club competes
with undertakings established in other EEA States. Insofar as the
measure is deemed to distort competition, it will, therefore, also
be capable of affecting trade between the Contracting Parties.

1.4. The

purchase

by Time municipality

title
numbers 1/125, 2/277, 2/278 and 2/284 for
the
purpose of building a new upper secondary school
and the right to underground parking facilities granted
to Forum Jæren

of

With respect to the right to build parking spaces under title
numbers 1/125, 2/277, 2/278 and 2/284, allegedly granted to
Forum Jæren by Time Municipality, it appears to the Authority
that Forum Jæren has not yet obtained a legally enforceable
right of use of the property. As long as the contractual condi-
tions governing Forum Jæren's future right of use, and thus the
commercial balance of the contract, have not yet been deter-
mined,
it is not possible to assess whether a potential future
agreement would involve the granting of State aid. Thus, even if
the possible future granting of such a right were to constitute
State aid, the aid has not yet been put into effect. As the
Authority only has the power to assess aid which has already
been put into effect (1) or plans to grant aid notified to it by the
national authorities (2), it cannot, at this stage, take a decision
on the possible aid involved in granting Forum Jæren the right
to construct parking spaces under the foreseen school buildings.
Thus, the Authority finds that no State aid has been granted at
this stage.

This finding does not preclude the Authority from adopting a
decision if, at a later stage, a measure possibly involving aid
should be put into effect or notified to the Authority pursuant
to Article 1 of Section I of Protocol 3 to the Surveillance and
Court Agreement.

2. PROCEDURAL REQUIREMENTS

Pursuant to Article 1(3) in Part I of Protocol 3 to the Surveil-
lance and Court Agreement, ‘the EFTA Surveillance Authority shall
be informed, in sufficient time to enable it to submit its comments, of
any plans to grant or alter aid (…). The State concerned shall not put
its proposed measures into effect until the procedure has resulted in a
final decision’.

Title number 4/165 and title numbers 2/70 and 2/32 have been
sold under legally binding sales contracts and the titles have
been transferred in the land register. The measures must there-
fore be deemed to have been put into effect.

As for the sale of title numbers 1/152, 1/301 and 1/630 to
Grunnsteinen, the titles have not yet been transferred in the
land register. However, a legally binding contract has been
entered into, from which the municipal authorities cannot with-
draw without incurring financial consequences. Thus, no further
formal measures are required for the buyer to receive the
economic benefit of the transaction, and it must therefore be
deemed to have been put into effect.

(1) Unlawful aid or existing aid, under, respectively, Section III and V of

Part II of Protocol 3 to the Surveillance and Court Agreement.
(2) Section II of Protocol 3 to the Surveillance and Court Agreement.

These transactions have not been notified to the Authority. To
the extent that these transactions involve State aid,
it can be
concluded that the Norwegian Government has not respected its
obligations pursuant to Article 1(3) in Part I of Protocol 3 to
the Surveillance and Court Agreement.

3. COMPATIBILITY OF THE AID

contain aid,

The Norwegian authorities have argued that the transactions do
not
forward arguments
and have not put
concerning compatibility. However, after assessing the likelihood
that State aid may be involved in the transactions described
above, it has to be considered whether any aid involved in the
transactions could be compatible with the EEA Agreement
under Article 61(3)(a)-(c) EEA.

In the case of the sale of title numbers 1/152, 1/301 and 1/630
to Grunnsteinen, the information available to the Authority
does not seem to indicate that any aid was granted to promote
the economic development of areas where the standard of living
is abnormally low or where there is serious underemployment,
to promote a project of common European interest or to
facilitate the development of certain economic activities. More-
over, any aid granted to the sports club would not seem to
promote
that background,
Article 61(3)(a)-(c) appears to be inapplicable.

cultural development. Against

For the same reasons, any possible aid involved in the sale of
title number 4/165 to Bryne Industripark and the sale of title
numbers 2/70 and 2/32 to Bryne FK does not seem to be
compatible with the functioning of
the EEA Agreement by
virtue of Article 61(3)(a)-(c).

4. CONCLUSION

Based on the information available to the Authority, including
the information submitted by the Norwegian Government, the
Authority cannot exclude that the sales of title numbers 1/152,
1/301, 1/630 (to Grunnsteinen AS), 4/165 (to Bryne Industri-
park AS), 2/70, 2/32 (to Bryne FK) constitute aid within the
meaning of Article 61(1) of the EEA Agreement. Furthermore,
the Authority has doubts, to the extent that State aid is involved,
that they can be regarded as complying with Article 61(3)(c) of
the EEA Agreement. Consequently, the Authority has doubts
that the transactions referred to above do not constitute State
aid or are compatible with the functioning of the EEA Agree-
ment.

Consequently, and in accordance with Article 4(4) in Part II of
the
Protocol 3 to the Surveillance and Court Agreement,
Authority is obliged to open the procedure provided for in
Article 1(2) in Part I of Protocol 3 of the Surveillance and Court
Agreement. The decision to open proceedings is without preju-
dice to the final decision of the Authority, which may conclude
that the measures in question do not constitute State aid or are
compatible with the functioning of the EEA Agreement.

The Authority also draws the attention of the Norwegian autho-
rities to the fact that Article 1(3) in Part I of Protocol 3 to the
Surveillance and Court Agreement constitutes a standstill obliga-
tion and that Article 14 in Part III of that Protocol provides
that, in the event of a negative decision, all unlawful aid may be
recovered from the beneficiary, save in exceptional circum-
stances. At this stage, the Authority has not been presented with
any facts indicating the existence of exceptional circumstances
on the basis of which the beneficiary may legitimately have
assumed the aid to be lawful.

5.6.2008

EN

Official Journal of the European Union

C 138/41

In light of the foregoing considerations, the Authority, acting
under the procedure laid down in Article 1(2)
in Part I of
Protocol 3 to the Surveillance and Court Agreement, requests
Norway to submit its comments and to provide all such infor-
mation as may help to assess the transactions described above,
within one month of
It
requests your authorities to forward a copy of this letter to the
potential aid recipient of the aid immediately.

the date of receipt of

this decision.

this decision,

the foregoing consideration,

the Authority
In the light of
requires, within one month of receipt of
to
provide all documents, information and data needed for assess-
ment of the compatibility of the property transactions engaged
in by the Municipality of Time and, in particular, value assess-
ments stating the value of title numbers 1/152, 1/301, 1/630,
4/165, 2/70 and 2/32 at the time of the sale, carried out by an
independent asset valuer in accordance with the procedure
described in the Authority's Guidelines relating to Sales of Land
and Buildings by Public Authorities,

HAS ADOPTED THIS DECISION:

1. The Authority has decided to open the formal investigation
procedure provided for in Article 1 (2) in Part I of Protocol 3
to the Surveillance and Court Agreement against Norway in
relation to the sale by the Municipality of Time of the prop-
erties registered under title numbers 1/152, 1/301, 1/630 (to
Grunnsteinen AS); title number 4/165 (to Bryne Industripark
AS) and title numbers 2/70 and 2/32 (to Bryne FK) in Time.

2. At present, the transactions relating to title numbers 1/125,
2/277, 2/278, 2/284 in Time do not involve the granting of
State aid, within the meaning of Article 61(1) of the EEA
Agreement, to Forum Jæren AS.

3. The Norwegian Government

to
Article 6(1) in Part II of Protocol 3 to the Surveillance and
Court Agreement, to submit its comments on the opening of
the formal investigation procedure within one month from
the notification of this decision.

requested, pursuant

is

4. The Norwegian Government is required to provide within
one month from notification of this decision all documents,
information and data needed for assessment of the compat-
ibility of the aid measure,
in particular value assessments
stating the value of
title numbers 1/152, 1/301, 1/630,
4/165, 2/70 and 2/32 at the time of the sale, carried out by
an independent asset valuer in accordance with the proce-
dure described in the Authority's Guidelines relating to Sales
of Land and Buildings by Public Authorities.

5. The Norwegian Government is requested to forward a copy
of this Decision to the potential recipients of aid immedi-
ately.

6. This Decision is addressed to the Kingdom of Norway.

Done at Brussels, 19 December 2007.

For the EFTA Surveillance Authority

Per SANDERUD

Kristján Andri STEFÁNSSON

President

College Member