In Ukraine, a country with a struggling economy, real estate is one of the assets guaranteed to hold its value. That makes construction and real estate sales and management extremely profitable business sectors.
Now, an investigation by the Nashi Groshi journalism broadcast proves that Andriy Bohdan, Ukrainian President Volodymyr Zelensky’s chief of staff, was connected to this business prior to becoming a top official — and he has maintained his ties from that period.
The investigation, published on July 23, focuses on Bohdan’s close personal and professional connections to Andriy Vavrysh, the CEO of Saga Development. One of Saga’s projects was even built on land leased to the developer by a company tied to Bohdan. For its part, Saga has a history of developing housing complexes that benefited from close — and sometimes ethically questionable — ties to government. And it appears to be reaping benefits from its ties to the administration of the new Ukrainian president.
Rise to power
On June 20, Zelensky announced that he would move his office from the traditional Presidential Administration to the Ukrainian House on Evropeiska Square in Central Kyiv. That day, Zelensky examined plans for the redevelopment of Ukrainian House. He was joined by both Bohdan and Vavrysh, whose company was preparing the plans for the new presidential office.
That directed attention onto Vavrysh, a developer who previously served as deputy director of Kyiv’s City Planning and Architecture Department. Journalists soon noted that he and Bohdan were friends, as confirmed by many pictures of them together.
But despite Vavrysh telling Nashi Groshi that “we are just friends,” the investigative program has revealed that their connection also extends to business. And that connection is likely why Vavrysh and his company were offered the opportunity to take part in redesigning and developing the new presidential office.
Mere weeks after Bohdan took office, Vavrysh got involved in the project without any public tender. No other architectural or developer firms competed for the chance to work on the Hr 300 million ($11.7 million) project, which the president’s office says will not use money from the state budget.
It wasn’t the first time Bohdan and Vavrysh had cooperated on development projects either, Nashi Groshi reported. The San Francisco residential complex, one of Saga Development’s projects in Kyiv, was constructed on land leased by the Karmen Trading company. Until recently, that firm was managed by Oleksandr Kovalenko, whom Nashi Groshi termed “Bohdan’s trustee.”
Bohdan confirmed to Nashi Groshi that he knew Kovalenko, but did not say anything further about their relationship or his own activities with land.
Fair trades?
Vavrysh positions himself in the media as a real estate developer focused on sustainable and human-centered city development. That said, his business projects have involved questionable deals.
Saga Development recently completed construction of the New York residential complex, a project in downtown Kyiv. The New York complex stands on a land plot allocated for the residential needs of the Prosecutor General’s Office of Ukraine. The Prosecutor General’s Office was supposed to receive apartments in the new complex in return for allowing Saga and its partners to construct the high-rise — a common practice in Ukraine. Instead, the office received apartments on the northern outskirts of the city from two other companies involved in the project at different points.
Saga’s website states that the company fulfilled all its obligations before the Prosecutor General’s Office by providing it apartments in other developments.
In comments to Nashi Groshi, Vavrysh also downplayed his company’s role in the construction of the complex. “Many different companies build. Saga Development is like a coordinator,” he said.
Andriy Vavrysh, CEO of Saga Development, speaks with the Kyiv Post in his office on the top floor of Kyiv’s 101 Tower office complex on March 22. Vavrysh previously worked as a city official. (Oleg Petrasiuk)
Andriy Lysenko, the spokesperson for the Prosecutor General’s Office, told Nashi Groshi that the agency’s priority was getting apartments for its employees inside the Kyiv city limits. He did not identify any violations of the agreement by Saga.
The Prosecutor General’s Office later entered into a new deal with Saga Development and the Perfect Group. The latter is a construction organization linked to Dmytro Isaenko, a former deputy minister of regional development and construction, Nashi Groshi reported. On July 21, Isaenko was elected to Ukraine’s Parliament on the list of the pro-Russian Opposition Platform – For Life” party.
However, until Zelensky’s election and Bohdan’s appointment as presidential chief of staff, residential construction was banned on this land plot on Kyiv’s Klovsky Descent. But after the change of power, the Prosecutor General’s Office managed to change the plot’s designated purpose from industrial to residential construction. This opened the way for building Philadelphia Concept House, an elite high-rise that breaks the rules governing building height in the neighborhood, experts told Nashi Groshi.
Because the building has not yet been constructed, it is unclear whether the Prosecutor General’s Office will get apartments there.
Public-private partnership
Vavrysh has a notable history of using connections with government to benefit his business.
Earlier, in March, the Kyiv Post reported that, while working as a city official, Vavrysh had effectively signed construction permission documents with himself. The documents in question, known as detailed plans of the territory (DPT), adjust the categorization of land in Kyiv’s General Plan. Experts warn they are often used to allow illegal residential construction.
After leaving public office in 2015, Vavrysh went on to represent the investor in the DPTs in interactions with the city. Later, Vavrysh founded Saga Development. It would go on to develop housing projects on two sites described in the DPTs. Moreover, the official “investor” and “contractor” listed in these documents were companies with close ties to Vavrysh.
In one case — the DPT for Kyiv’s Rybalsky Island — the document benefitted not only Vavrysh and Saga Development, but also a number of powerful people. It allowed President Petro Poroshenko and his business partner, lawmaker Igor Kononenko, to sell the Rybalsky Kuznya shipyard to banker Sergiy Tigipko for up to $300 million in 2018. Like Saga, Tigipko planned to build a residential complex on the shipyard’s land. Additionally, Russian-Ukrainian businessman Pavlo Fuks, who owns land on Rybalsky Island, is also considering building as a result of the DPT.
