REDEVELOPMENT PLAN: Milan-based Fondazione Altagamma has put forward a proposal to enhance the city’s Galleria Vittorio Emanuele II. As confirmed by the city’s budgets councilor Bruno Tabacci, the association, which represents more than 70 Italian luxury firms, sent an official letter to the mayor with a joint venture offer.

According to news reports here, Altagamma proposed to establish a foundation or a new company to co-manage the Galleria Vittorio Emanuele II with the municipality, which would have a majority stake of 51 percent in the organization.

This story first appeared in the April 10, 2012 issue of WWD. Subscribe Today.

Selling the remaining 49 percent of the property, which has a market value of 1 billion euros, or $1.3 billion at current exchange, Milan’s City Hall would collect about 450 million euros, or $589 million, along with 35 million euros, or $46 million, a year from rent.

The Galleria Vittorio Emanuele II houses boutiques of several fashion firms, including Gucci, Louis Vuitton and Prada, which has recently won an auction for the huge building now occupied by a McDonald’s restaurant. The news sparked controversy in the media here, as different political factions accused the city of selling out a historical landmark to fashion, considering it merely a business vehicle.

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