City's legal opinion on land deal allegedly shelved

A critical legal opinion concerning an agreement between Reykjavik City and the Icelandic state regarding land development was allegedly kept from the city council. The opinion, issued by the city's own legal counsel, raised concerns that the agreement could potentially involve unlawful state aid. This assessment was reportedly known to city officials before the agreement was finalized.

According to sources, the legal opinion was dated April 29, 2026, just one day after Heiða Björg Hilmisdóttir, then the mayor of Reykjavik, signed the agreements with the state. The signing ceremony took place in front of journalists, and the city council subsequently approved the arrangement the following day. Sources indicate that Hilmisdóttir was aware of the legal counsel's concerns even earlier than the opinion's official date.

Furthermore, sources claim that Hilmisdóttir actively prevented the legal opinion from being included with the case documents presented to the city council for approval. This alleged action raises questions about transparency and the process by which the agreement was passed. The report suggests that the city council's decision to approve the land development deal was made without full disclosure of the potential legal implications highlighted by its own legal department.