The city authorities of Benidorm (Benidorm) have found themselves at the center of one of the most high-profile court cases in recent years. Spain’s Constitutional Court (Tribunal Constitucional) refused to consider the municipality’s appeal, which sought to avoid paying a staggering compensation for plots in the Serra Gelada (Serra Gelada) natural park. Now the city is obliged to pay more than 350 million euros to the companies owning these lands. The amount is so large that it exceeds Benidorm’s annual budget by more than double. The municipality’s financial future is now under threat.
The story began back in 2003, when the city administration, led at the time by Vicente Pérez Devesa, reached an agreement with the owners of sector APR-7. Under the deal, building rights for the disputed lots were to be transferred to other parts of the city. However, two years later, after the Serra Gelada natural resource protection plan was approved, these lands were designated as specially protected. Despite this, the agreements remained in force and were even extended in 2010 and 2013 by successive city councils.
By 2015, the patience of the landowners ran out: they valued their properties at 280 million euros and demanded compensation—either in cash or with alternative plots. When the agreements were not fulfilled, they filed a lawsuit in 2018. The lower court sided with the city, but the owners appealed to the Superior Court of the Valencian Community (TSJCV), which ruled in their favor.
A legal relay
TSJCV acknowledged that the city took on obligations it never fulfilled. The court awarded compensation of €283 million plus interest. The municipality tried to appeal this decision to the Supreme Court, but the appeal was rejected, making the compensation amount final. After that, the city authorities made a last attempt—they appealed to the Constitutional Court, asking to suspend the ruling while the case was under review. But here too they were disappointed: the court saw no particular constitutional significance in the case and declined to consider it.
Now Benidorm has no choice but to prepare to pay this gigantic amount. The decision could deliver a real financial shock to the city, as this sum has the potential to cripple municipal operations for years to come. The authorities have already stated they do not accept this outcome and are still looking for legal loopholes to challenge the obligations. But so far, all attempts have been in vain.
Legal battles
In parallel with the main proceedings, other legal disputes related to these agreements are also ongoing. In one of them, with a decision handed down just recently, the first section of the administrative court TSJCV recognized the Serra Helada contracts as valid and enforceable. This decision overturns the Alicante lower court verdict, which had previously sided with the municipality. However, this ruling has not yet come into force and can be appealed within a month.
The city authorities, currently led by Toni Pérez, insist that the agreements should be declared null and void, as not all necessary urban planning procedures were followed and the land itself was never transferred. However, so far the courts have been reluctant to support this interpretation. The municipality continues to file lawsuits in an attempt to annul its property liability, but has seen no success yet.
Financial crisis
The situation is becoming critical for Benidorm. If the decision to pay compensation remains in force, the city could face bankruptcy. The amount far exceeds any reasonable limit for the municipal budget. Authorities fear they may have to cut spending on social programs, infrastructure, and even salaries for municipal employees. Possible scenarios are already being discussed in the city, ranging from higher taxes to the sale of municipal assets.
So far, none of these options look like a real solution. Residents are anxiously watching how events unfold, as the outcome will determine not only the city’s financial health but also its future as a tourist destination. The land scandal in Serra Gelada has become a true test for the entire city management system. And it seems this story is far from over.
