GEO

From public to a politician's property: the story of a land plot near Turtle Lake

01 August, 2013

Public and media attention in recent days was drawn to a planned restaurant construction in one Tbilisi's protected territories, located on the road leading to Turtle Lake. Tbilisi residents often come here to relax, exercise and take a walk with children.

This land plot is in the heart of a landscape-recreational zone. Under the current legislation, this zone is a "territory of a natural landscape or a valuable artificial landscape within the (administrative) borders of Tbilisi" and basically any construction there is prohibited (apart from vital infrastructure for the zone's functioning). The land plot itself has the status of a "Recreation Zone (RZ-3)". Unlike a landscape-recreation zone, construction of various objects in the RZ-3 zone is possible with the City Hall's permission. It is not clear when the land plot’s status was downgraded to RZ-3 but this is likely to have happened either in 2009 or later.

The land plot was originally privatized in June 2000 through a decree of the Tbilisi Premier (mayor) and was given to Armlender and Associates LLC, owned by a British Virgin Islands offshore company with the same name. In May 2011, the company returned the plot back to the state and Tbilisi City Hall took over the ownership.

Yet, in late June 2011, Tbilisi City Hall decided to cut out a land plot this territory and to auction it off. According to the auction terms, the buyer was mandated to build a two-floor restaurant with a hall for banquets and concerts. 

It is unclear why the Tbilisi City Hall found it necessary to auction the land plot under these narrow conditions, indicating that the privatization process might have been tailored to the interests of a specific private company.

Otium LLC purchased the plot at an auction on 19 July 2011 for 650,000 GEL. At the time, Otium was owned by JSC Hotels and Restaurants Management Group (M|Group). A shareholder in M|Group is Archil Gegenava, who at the time of the auction was a member of the Georgian Parliament from the ruling United National Movement (UNM) party. Otium was subsequently acquired by JSC Holding.ge (owned by Archil Gegenava’s brother Andro Gegenava) and finally by Eastwest Holding Ltd, a Seychelles shell company.

In 2013, the land plot was sold again and was bought by Colorit LLC, co-owned by M|Group. Archil Gegenava's brother, Andro Gegenava, is also among the owners of Colorit.

Remarkably, it is not for the first time when the Tbilisi City Hall adopts significant decisions on the future of the city's recreational zones hastily and without due public discussions. And it is not the first time, that a public official is the beneficiary of such a decision. For instance, in 2011, the City Hall leased the Mushtaidi Park for a period of 49 years to Geo Gold, a company with no experience of managing recreational zones and owned by Aleksandre Nikolaishvili, a member of the faction of UNM in the Tbilisi City Council.

We urge the Tbilisi City Hall to explain to the public the reasons for selling a piece of land within a protected area which the residents of Tbilisi are using for recreation, as well as for the planned construction of a restaurant there.

Author: Transparency International Georgia