Michael Stivala settlement reshapes Townsquare project plans

A private settlement reached between Malta Developers’ Association President Michael Stivala and a group of residents objecting to his Townsquare development has introduced a new chapter in one of Malta’s most closely watched planning disputes. The agreement, dated 7 January and reviewed by this publication, confirms that Stivala has agreed to amend a contested planning application by removing a proposed hotel element. In return, objectors have committed to withdrawing their opposition and refraining from objecting to any future planning applications linked to the site.

The agreement highlights the complex interaction between private negotiations and public planning processes, particularly in projects of significant scale and public interest. While the settlement addresses immediate objections related to the current plans, it also raises broader questions about transparency, long term development intentions and the extent to which private agreements can shape outcomes in public decision making frameworks.

This article examines the background of the Townsquare project, the precise terms of the settlement, the legal and planning context surrounding the agreement and the wider implications for governance, accountability and public participation in development decisions.

Background of the Townsquare development

The Townsquare project has been the subject of controversy for several years. Initially conceived by a consortium of some of Malta’s most prominent families, the project was first presented as a landmark high rise development. Early plans proposed a 38 floor tower, a scale that immediately provoked strong public opposition from residents, civil society groups and urban planning commentators.

Following widespread criticism, the developers revised the proposal, reducing the tower height to 28 floors. This amended version eventually received approval from the Planning Authority after extensive scrutiny and debate. At the time, the approval was seen by some as a compromise between development ambitions and public concerns, although opposition never fully subsided.

Several years after the Planning Authority granted approval for the revised plans, the Stivala group announced that it had entered into an agreement to acquire the Townsquare site from the original consortium. The acquisition included the intention to proceed with the approved 28 floor project, positioning the development as a significant addition to Malta’s urban skyline.

Expansion plans and renewed objections

In 2023, the Planning Authority approved further changes to the Townsquare project that had not previously been publicly disclosed. These expansion plans included the addition of a 10 storey hotel within the same tower structure as well as an increase of 75 residential apartments.

The inclusion of a hotel reignited opposition from residents and other stakeholders. Objectors argued that the hotel element represented a substantial intensification of commercial use within a project originally approved under different assumptions. Concerns were raised about increased pressure on infrastructure, changes to the character of the area and compliance with planning policies governing public open spaces.

A series of appeals were filed with the Environment and Planning Review Tribunal. These appeals challenged the Planning Authority’s decision on multiple grounds, including the legality of introducing a hotel within areas designated as public open space. The tribunal initially rejected the appeals, effectively confirming the Planning Authority’s approval of the expanded plans.

Court intervention and legal constraints

Following the tribunal’s decisions, objectors escalated the matter to the courts. The court proceedings marked a significant turning point in the Townsquare saga. In its ruling, the court partly upheld the appellants’ arguments and ordered the Environment and Planning Review Tribunal to reassess its decision.

The court issued specific determinations that materially affected the scope of the development. It decreed that a hotel could not be built on the site’s public open space. It further ruled that no restaurants could be developed within the residential component of the site. In addition, the court specified that apartments within the tower must have a minimum floor area of 150 square metres.

These rulings imposed clear legal boundaries on the project and reinforced the principle that large scale developments must strictly adhere to planning regulations and land use designations. It was within this legal context that negotiations between Stivala and certain objectors culminated in the private settlement.

Terms of the private settlement

According to the agreement dated 7 January, Stivala committed to dropping the plans to build a 10 storey hotel from the specific planning application under consideration. Instead, the area previously designated for the hotel would be replaced with a small outdoor area.

This commitment was made through ST Property Investments, the company associated with the development. Importantly, the scope of the pledge is limited. The agreement does not prohibit the developer from submitting new planning applications in the future that could include a hotel component. Rather, it applies only to the current application already before the authorities.

In exchange for this concession, the objectors agreed to withdraw their existing objections within five days of signing the agreement. They also undertook to refrain from objecting to any future planning applications relating to the Townsquare site.

The agreement explicitly states that former objectors agreed to “endorse and not to object to any other applications made to any other government authority… in relation to PA/1398/23…This provided that anything which the objectors are required to endorse does not run contrary to this agreement.”

This clause effectively binds the signatories to support or at least not oppose future applications connected to the site, subject to the terms outlined in the settlement.

Confidentiality and transparency concerns

One of the most contentious aspects of the agreement is its confidentiality clause. Stivala required objectors who signed the agreement to “not disclose this agreement to any third party who is not a party without prior authorisation from ST.”

Such a provision raises serious transparency concerns. Planning decisions are by their nature public processes, intended to balance private development interests with the broader public good. The involvement of private agreements that influence the positions of objectors can be seen as undermining the openness of these processes.

While confidentiality clauses are common in commercial settlements, their use in disputes directly linked to public planning decisions is more problematic. Critics argue that the public has a legitimate interest in understanding the factors that shape development outcomes, especially when those outcomes affect shared spaces and community infrastructure.

Uneven concessions and binding commitments

The settlement reflects an asymmetry in the commitments undertaken by the two sides. Stivala’s concession is narrowly framed, applying only to the current planning application. The company retains the right to submit new applications in the future that could revisit the hotel concept, provided they comply with legal and planning requirements at that time.

By contrast, the objectors’ commitments are broader and longer lasting. By agreeing not to object to any future applications related to the Townsquare site, they effectively remove themselves as potential sources of opposition regardless of the nature or scale of future proposals.

This imbalance has prompted criticism that the agreement places disproportionate constraints on private citizens while preserving flexibility for the developer. It also highlights how settlements can reshape the landscape of participation in public planning debates.

Continued opposition and unresolved disputes

Although the agreement names 14 objectors, at least two individuals are known to have remained opposed to Stivala’s plans. Their continued resistance indicates that the dispute over the Townsquare project is not fully resolved.

The presence of ongoing opposition underscores the fact that private settlements do not necessarily extinguish broader public concerns. Even where some objectors withdraw, others may continue to challenge aspects of the project through administrative or legal channels.

This dynamic reflects the layered nature of planning disputes, where multiple stakeholders with differing interests and levels of influence engage over extended periods.

Allegations involving environmental NGOs

In parallel with the planning controversy, Stivala has previously made public allegations against environmental non governmental organisations. He claimed that businesses were using such groups to harm competitors and asserted that NGOs “are accepting money and doing it happily.”

These allegations were strongly denied by the organisations concerned. They maintained that their actions were motivated by environmental protection and public interest considerations rather than commercial influence.

While these claims are not directly addressed in the settlement agreement, they form part of the wider context in which the Townsquare project has been debated. The tension between developers and civil society groups remains a recurring feature of Malta’s planning landscape.

Unanswered questions from the developer

Questions were sent to Michael Stivala seeking clarification on several key issues. These included why the private agreement was deemed necessary, whether the company intended to exclude hotel development on the site indefinitely and how the company justified the use of a private settlement to influence a public planning process.

No responses had been received by the time of publication. The absence of comment leaves important questions unanswered and reinforces calls for greater transparency from developers involved in projects of significant public interest.

Implications for planning governance in Malta

The Townsquare settlement illustrates broader challenges facing planning governance in Malta. It highlights how private agreements can intersect with public decision making processes, potentially shaping outcomes in ways that are not immediately visible to the wider community.

The case also raises questions about the balance of power between developers and residents, particularly when legal and financial resources are unevenly distributed. While settlements can bring short term resolution to disputes, they may also limit future participation and scrutiny.

For policymakers and regulators, the episode underscores the importance of clear rules governing transparency, disclosure and public participation. Ensuring that planning decisions remain open and accountable is essential to maintaining public trust in the system.

Conclusion

The private settlement between Michael Stivala and a group of Townsquare objectors represents a significant development in a long running planning dispute. By agreeing to amend current plans while preserving flexibility for future applications, the developer has secured the withdrawal of opposition from several residents.

At the same time, the agreement’s confidentiality provisions and the breadth of commitments imposed on objectors raise legitimate concerns about transparency and fairness in public planning processes. With some opposition continuing and key questions unanswered, the Townsquare project remains emblematic of the tensions that accompany large scale urban development in Malta.

As the project moves forward, its evolution will continue to be closely scrutinised by residents, civil society and regulators alike.

FAQs

What is the Townsquare project?
The Townsquare project is a large scale mixed use development in Malta originally proposed as a high rise tower and later revised following public opposition and planning reviews.

Who is Michael Stivala?
Michael Stivala is the President of the Malta Developers’ Association and is involved in the Townsquare development through ST Property Investments.

What did the settlement agreement change?
The agreement commits the developer to removing a proposed 10 storey hotel from the current planning application and replacing it with a small outdoor area.

Does the agreement ban hotels on the site permanently?
No. The agreement applies only to the current planning application and does not prevent future applications that could include a hotel.

What did the objectors agree to in return?
The objectors agreed to withdraw their existing objections and to refrain from objecting to future planning applications related to the Townsquare site.

Why is the confidentiality clause controversial?
The clause restricts disclosure of the agreement despite its impact on a public planning process, raising concerns about transparency and accountability.

Are all objectors satisfied with the settlement?
No. At least two objectors are known to remain opposed to the project and continue to challenge aspects of the development.

What role did the courts play in the dispute?
The courts partly upheld objections and imposed legal constraints on the project including limits on hotel development and apartment sizes.

What allegations were made about environmental NGOs?
Michael Stivala alleged that NGOs were being used by businesses and claimed they were “are accepting money and doing it happily,” allegations which were denied by the organisations.

Why is this case important for planning governance?
The case highlights how private settlements can influence public planning processes and raises broader questions about transparency, participation and fairness in development decisions.