Montenegro’s Ministry of Spatial Planning, Urbanism and State Property has affirmed that Adriatic Properties holds the legal authority to proceed with the construction of its hotel project in Miločer Park. This development reignites a contentious investment dispute as discussions intensify regarding the future of the long-closed Sveti Stefan luxury resort.
The ministry’s statement specifically addresses the incomplete Kraljičina Plaža/Janu hotel project, which is part of a broader redevelopment agreement linked to the lease of the Sveti Stefan and Villa Miločer properties, along with related coastal assets managed by Adriatic Properties. Officials emphasized that the investor is entitled to finalize construction under existing permits and within previously authorized parameters.
This clarification emerges amidst increasing political and public scrutiny regarding construction activities in Miločer Park, recognized as one of Montenegro’s most valuable protected coastal areas. Environmental advocates, local residents, and opposition politicians have expressed concerns that further development could irreversibly change the cultural and natural landscape surrounding Sveti Stefan.
Government representatives are attempting to differentiate between “new development” and the continuation of previously approved construction projects. Under a proposed settlement framework negotiated with Adriatic Properties, officials assert that no additional apartments or expanded building footprints will be authorized beyond what has already been permitted.
The matter is pivotal in ongoing efforts to resolve a prolonged arbitration dispute involving Sveti Stefan. The luxury resort and Villa Miločer have remained shuttered for several tourist seasons due to conflicts among the government, local communities, and Adriatic Properties, which collaborates with Aman Resorts in managing the site. The closure has become a prominent issue in Montenegro’s tourism sector, impacting both economic outcomes and the country’s reputation in luxury tourism.
Earlier this year, Montenegro’s government ratified a settlement framework aimed at reopening the Aman-operated resort complex ahead of the summer season. This agreement reportedly includes retraction of mutual arbitration claims, revised lease terms, increased concession payments, and commitments concerning public access to beaches and pathways in the Miločer region.
The unfinished hotel project carries significant financial and political weight as it forms part of Montenegro’s long-standing narrative promoting premium tourism investments. Initially, it aimed to transform the former Kraljičina Plaža hotel into an ultra-luxury hospitality complex integrated within the Aman/Sveti Stefan ecosystem.
Critics contend that both the scale and design of this development exceed what should be permitted in a protected heritage area. Opposition members and civic organizations have accused prior administrations of granting excessive construction rights within Miločer Park while demanding full transparency regarding contractual obligations and planning approvals related to Adriatic Properties.
The dispute also poses substantial financial ramifications for Montenegro. Ongoing legal proceedings and arbitration claims associated with Sveti Stefan’s closure reportedly involve compensation requests nearing €100 million, while state-affiliated hotel companies face unpaid lease receivables and tax disputes linked to halted operations.
For Montenegro, this situation represents a broader challenge that transcends a single hotel complex. The cases surrounding Miločer and Sveti Stefan increasingly serve as a benchmark for how the nation manages foreign investment protection alongside heritage conservation, environmental considerations, and political accountability within its luxury coastal development framework.
The government now appears committed to revitalizing tourism operations while preventing further escalation regarding construction rights. The success of this balance may ultimately influence not only the reopening of Sveti Stefan but also how prospective international investors evaluate regulatory and political risks across Montenegro’s high-end tourism landscape.
