Top EU court tells Austria to tighten rules for environmental review

LUXEMBOURG (CN) — Austria cannot exclude building projects from environmental impact assessments based on size alone, the European Union’s highest court said on Thursday, in the latest legal battle over a massive construction project in the country’s capital Vienna. 

The European Court of Justice found that Austria's minimum of 150,000 square meters (1.6 million square feet) for mandatory environmental investigations violates EU law by effectively exempting nearly all building projects in densely packed cities.

The dispute landed before the Luxembourg-based court after years of legal wrangling between billionaire property developer Michael Tojner and city residents. The Australian entrepreneur wants to build a huge hotel and apartment complex with an underground ice rink, swimming pool and garage in Vienna’s historic city center, a UNESCO World Heritage site. 

Tojner, worth an estimated $1.5 billion, first bought the Hotel Intercontinental in 2012, with plans to redevelop the site. The project, known as Heumarkt Neu, was originally set to have a 100-meter (328-foot) high-rise just minutes from the city’s famed Karlskirche church. 

Following complaints from residents, the UNESCO World Heritage Committee – the United Nations organization which administers the cultural and historic designation – warned Vienna it would lose its status if the project went forward. In 2017, it placed the city on the “red list” of locations in danger of destruction, citing the height of the project as especially concerning. 

Initially, Vienna backed down, sending a letter to the committee saying it would not grant permission for the land to be developed. Tojner then reduced the footprint of the project, designed by Brazilian architect Isay Weinfeld to appease officials, and was granted a building permit in 2018, less than a month after local authorities determined the new plan wouldn’t require an environmental impact assessment. 

The EU's 2011 Environmental Impact Assessment Directive requires planning authorities to examine what impact building projects could have on the surrounding environment. The Heumarkt Neu project was slated to have 89,000 square meters (956,000 square feet) of floor space, safely under the size that would trigger an assessment in Austria.

The building approval set off a flurry of legal action. Environmental protection organization Alliance for Nature filed a complaint at the Federal Administrative Court in Austria, arguing the city was obliged to carry out an assessment. 

Tojner withdrew his application and applied again, with a plan scaled back even further. In 2021, his company, WertInvest Hotelbetriebs, sued the city of Vienna, demanding a response to the permit application. 

The Vienna Administrative Court asked the European Court of Justice to weigh in, seeking clarity about which building projects are obliged to carry out an environmental impact assessments under EU law. 

The five-judge panel was critical of Austria’s size threshold, finding that it was “so high that, in practice, the majority of urban development projects are exempt in advance from the requirement for an environmental impact assessment.”

During a hearing in the case last year, the Austrian government told the court that it was aware of the size concerns and was working to amend its legislation. 

The dimensions, however, weren’t the only problem. The court also took issue with the idea that the need for environmental assessment could be based on size alone, writing that the nature of the project and its location must also play a role. 

The court was especially critical of Heumarkt Neu’s proximity to a UNESCO World Heritage site. That the proposed buildings would sit in the center of a protected site is “particularly relevant” when considering the need for an environmental assessment. 

It’s unclear what impact the ruling will have on the project itself. UNESCO removed Vienna from the red list in 2021 after it was assured the building wouldn’t move forward. Tojner has tried to convince the city to allow an even smaller building. The proposed tower would now be 56.5 meters (185 feet) tall, nearly half the size of the first concept. 

The case will return to the court in Vienna, where it will be assessed based on the clarification from the EU court.

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