05.07.2024
Construction Corruption
Kyiv
How the Stolitsa Group developer destroys parks, green areas and leaves citizens homeless
Stolitsa Group is a well-known Kyiv-based developer with a dozen residential complexes in Kyiv.
Open sources show that 78% of the shares in Stolitsa Group LLC are owned by the Cypriot company ELAKOL DEVELOPMENTS LIMITED, whose beneficiaries are three Lithuanian citizens – Marina Poznyakova, Tumenas Raimondas, Agne Ruzgienė – and a Ukrainian, Ivan Molchanov. The latter is the son of Vladyslava Molchanova, co-founder of Stolitsa Group.
It was Molchanova who was a confidant of Yulia Tymoshenko, the leader of the Batkivshchyna party, during the 2019 presidential election. In addition, the woman is often called the main sponsor of Batkivshchyna.
The Lithuanian side of the developer is represented by BT Invest, an investment company. It also owns the Novus supermarket chain and the Retroville shopping and entertainment centre. Raimondas is the key beneficiary of BT Invest.
Despite the success of Stolitsa Group in the capital’s construction market: obtaining the most favourable land plots by decisions of the Kyiv City Council (KCSA), a large number of investors and a turnover of billions of hryvnias, Ukrainians still associate the developer as a “cheater”.
Many people’s dislike of Stolitsa Group and Molchanova as the public founder of the company is associated with the scandalous residential complexes Warshavsky Mikrorayon, Warshavsky Plus, Warshavsky 2 and Warshavsky 3. Here is an analysis of what is wrong with these projects.
Warsaw Empire Stolitsa Group
“The construction of the remaining apple orchards in Vynohradar has begun quietly and routinely. On the right you can see the piles being drilled for the foundations. On the left is the future of what could have become the largest park in Kyiv. Unfortunately, the neighbourhood was comfortable.” This is how one of the journalists described the process of construction of the residential complex by Stolitsa Group.
Back in 2012-2015, the state-owned enterprise and several companies affiliated with Stolitsa Group signed investment agreements for the construction of the Warshavsky Plus residential complex in the Vynohradar residential area. The 306-hectare plot belongs to the state-owned agricultural enterprise Pushcha-Vodytsia. According to the agreement, the developer invests in the construction, and the state-owned enterprise receives up to 5% of the residential area, which is approximately 180,000 sq m. Land tax and utilities were also to be paid by the SOE.
The agreements concluded in 2012-2015 between the State Property Fund and companies affiliated with Stolitsa Group did not meet the interests of the state. The difficulty was that a large number of individuals had bought apartments in these residential complexes and allegedly their interests were at stake.
The conflict went to court. The construction of several houses was suspended, and some of those already built and commissioned did not receive postal addresses. Later, a compromise (settlement agreement) was reached between the state-owned enterprise Pushcha-Vodytsia Agrocombine and Stolitsa Group.
According to the agreement, the state will receive 10% of the total real estate area, including commercial space, for all contracts where construction has not yet begun, instead of 5% of the residential area (as previously agreed). Under the contracts where construction is already underway and the areas already belong to private owners, Pushcha-Vodytsia will receive a percentage not only of residential but also of commercial real estate. Thus, the company was to receive 60,000 sq m more than the old contracts stipulated. This is approximately UAH 2 billion in monetary terms, or 1,200 apartments.
Although Molchanova easily managed to reach a compromise with the state authorities, the situation with investors remained acute for a long time. Kyiv residents held rallies, demanding their money or housing. Later on, some media outlets called the protests bought and aimed at discrediting Molchanova and her Stolitsa Group.
The completion of some of the Warsaw housing estates also did not solve all the problems. Thus, residents of the Warsaw Plus housing estate write about flooding in their basements after intense rainfall in the capital. “Flooding occurs regularly – due to high humidity, fungus has formed on the walls, the main structures are collapsing, water is seeping through the floor tiles, and the storerooms are literally standing in water.”
However, it seems that Molchanova is no longer so focused on the Warsaw projects, as she is already selecting new profitable land plots for new projects that risk being unfinished, together with the Kyiv authorities led by Vitali Klitschko and Komarnytskyi, the “supervisor”.
We have collected the necessary materials on the scandalous residential complexes of Stolitsa Group and submitted them to the regulatory authorities to check whether the developer complied with the law and whether there was a corrupt collusion with local authorities.
We would like to remind you that if you have become a victim of unscrupulous developers who have frozen the construction after taking your money, please contact the Association for the Protection of Defrauded Investors. You can do this by writing to our chatbot or emailing info.nonstopukraine@gmail.com.
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