On the surface, nothing about Rybalsky Island — a triangular peninsula in northern Kyiv jutting into the Dnipro River — screams residential hotspot.
Much of the island is occupied by Kuznya on Rybalsky, a shipbuilding plant with a 150-year history that, until recently, belonged to President Petro Poroshenko. The atmosphere is decidedly industrial. Many of the local buildings are rundown. Several streets lack sidewalks.
On the southern end of the peninsula, Soviet-era apartment buildings abut village-style single-family houses, which, in turn, abut a drainage ditch and de facto garbage dump. In the early spring, before greenery can take root, the cold wind blows the island’s omnipresent dust into pedestrians’ faces. Of four crossings onto the island, one is closed to automobiles and the fourth has never been fully constructed. In its current state, Rybalsky is hardly a place one would want to live.
Despite that, Ukraine’s entrepreneurs have dreamed of building up Rybalsky Island for over a decade. And currently the peninsula appears to be the center of a major land grab by powerful and politically-connected business.
Banker Sergiy Tigipko, who purchased Kuznya in 2018, will turn the factory into an elite residential area. Across Vulytsia Elektrikiv — “Electricians Street” in Ukrainian — another group of politically-connected companies is building the Rybalsky Residential Complex. And Russian-Ukrainian businessman Pavlo Fuks — noted for his involvement in Donald Trump’s failed Trump Tower project in Moscow — also appears to have plans to build on Rybalsky Island’s southern rim. The connections likely go all the way up to Poroshenko.
At the center of it all is an official document permitting construction on the island. Pushed by a former city official who moved seamlessly from public service into the development business, it was passed in 2016 by a city council loyal to Kyiv Mayor Vitali Klitschko and Poroshenko.
And activists believe the document is absolutely illegal.
Almost the city center
While Rybalsky’s current conditions don’t make it a particularly attractive residential neighborhood, its location is distinctly enticing. The peninsula is just a kilometer or two from Kyiv’s historic Podil neighborhood and not much farther from the city center.
In overcrowded Kyiv, that makes it a developer’s dream come true. Unsurprisingly, there have been several proposals to construct.
In 2005, Kyiv’s city building council approved a proposal by Kuznya on Rybalsky — then known as Lenin Kuznya — to build up the island. However, the council only allowed administrative and office buildings, the Nashi Groshi investigative outlet reported.
Around the same time, Fuks promoted another project: building Kyiv City, a business district filled with skyscrapers, on Rybalsky. That project was valued at $1 billion, but the 2008 global financial crisis forced Fuks to freeze his plans, he told Ukraine’s Focus magazine in March 2017.
Both then and now, the key obstacle to real estate development in Kyiv has been the city’s General Plan. It zones different areas of the city for different types of construction and sets out clearly what can and cannot be built.
A second type of document — called a detailed plan of the territory, or DPT — exists to clarify the General Plan. For example, if the General Plan zones a plot of land for residential construction, a DPT can specify the number of floors allowed in the apartment complexes set for construction there.
However, in recent years, the Kyiv authorities, in cooperation with developers, have begun abusing DPTs and using them to contradict the general plan, according to Yuriy Levchenko, a lawmaker from the nationalist Svoboda Party and an activist against illegal construction in the city.
Under current legislation, if there is no DPT for a certain block or neighborhood, the Kyiv City Council cannot give out the land for construction. That adds an additional incentive for their creation.
“The main reason why they do these DPTs is that it overrides the General Plan illegally,” Levchenko told the Kyiv Post. “Once it’s enacted, it allows the Kyiv City Council to give plots of lands for building sites.
“That’s the main reason why, in the last few years, we have seen a huge amount of DPTs,” he added.
Two women walk past one of the buildings of Saga Development’s Residential Complex Rybalsky on March 27, 2019. (Volodymyr Petrov)
Rybalsky Island fits this pattern. On July 30, 2015, the Kyiv Administration’s City Planning and Architecture Department signed a contract with two companies to draw up a DPT for Rybalsky. The two companies were the Inter-Regional Center for Technical Inventorization, listed in the contract as the “investor,” and Terra Project, listed as the “executor.”
The end result was a DPT that proposed a “total refunctionalization” of Rybalsky Island, an area it described as occupied by loss-making industrial enterprises.
The next step was to have the DPT passed by the Kyiv City Council. This proved a challenge: initially, in July 2016, the plan did not receive enough votes, Nashi Groshi reported. However, on Sept. 29, 2016, the council’s ruling coalition, widely viewed as subordinate to Mayor Klitschko and Poroshenko, voted in favor of the DPT.
Rybalsky Island was now open for construction.
Not without a fight
Yuriy Levchenko is young and enthusiastic. Most of all, he isn’t afraid of criticizing the Ukrainian authorities.
Levchenko grew up in Cyprus, where his father — a maritime captain in Soviet times — worked in shipping. After graduating from an English-language high school there, Levchenko studied at the London School of Economics and Otto von Guericke University of Magdeburg in Germany.
In 2008, he returned to Ukraine and soon got involved in politics. After several attempts to run for parliament — in two cases, he says the regime of ousted President Viktor Yanukovych stole his victory — he finally made it. In November 2014, Levchenko was elected to the Verkhovna Rada from a single-mandate district in Kyiv.
He soon cut his teeth opposing a DPT and the construction of a residential complex in his district. Then activists began turning to Levchenko asking him to help fight illegal construction — a problem he describes as “widespread” — in other parts of the city.
That’s how he got involved with Rybalsky Island. Soon, he was attending sessions of the Kyiv City Council whenever he could, and arguing against the Rybalsky DPT.
Levchenko credits his efforts with preventing the DPT from being passed twice. He also says he informed Mayor Klitschko that the document was illegal. Many of the people involved in producing the DPT were the mayor’s direct subordinates, and Klitschko controls the city council’s ruling coalition. He also has veto power. Still, appeals to the mayor yielded no results, Levchenko says.
After the DPT passed, Levchenko submitted a complaint with the Kyiv district administrative court, alleging that the DPT both violated the General Plan and had been passed without the requisite public hearings. In February 2018, a judge ruled in Levchenko’s favor and voided the decision of the Kyiv City Council to pass the document.
But that victory was short-lived. Less than two months later, an appeals court overturned the ruling. And on June 2018, the Supreme Court declined to alter the appeals court’s ruling. For all intents and purposes, the Rybalsky DPT was legal.
Levchenko suggests the decision demonstrates the failure of legal reform.
“The court of appeals and the supposedly reformed, wonderful Supreme Court made an absolutely illegal decision,” he says. “I firmly believe this was a corrupt scheme. I’m sure the judges were contacted or bribed.”
He notes that, despite having an enormous backlog of cases, the Supreme Court somehow managed to hear this one in just two months. Furthermore, the court held a quick hearing that was closed to the public.
That is legal under Ukrainian legislation, but Levchenko believes that any honest judge would understand that this issue affects millions of people in Kyiv and had provoked a “media outcry.” It should be heard publicly, he says.
How will it affect millions? The Rybalsky DPT is not the worst document that Levchenko has seen, but he believes it will do damage to the city.
The island simply lacks the transportation infrastructure to support the amount of people who would inhabit the new developments, and turning Rybalsky into a residential area will likely make Kyiv’s already intense traffic worse, he says.
His assessment echoes that of city building expert Viktor Gleba, who told RFE/RL’s Schemes investigative journalism program that construction on Rybalsky would put 20,000 more cars on the island amid an already “colossal burden” on the city’s transport system.
“They are creating a ghetto, a place where it will be an isolated island with roads and industrial zones all around it,” Levchenko says. “The end result will be a run-down area where the quality of life for most people will not be that good.”
And there’s another issue, one that affects Ukrainians far beyond Kyiv: at a time of heightened military tensions with Russia in the Azov Sea, Levchenko says the construction will lead to the destruction of Kuznya on Rybalsky, the only factory that repairs ship engines and can produce Gurza gunboats for the Armed Forces of Ukraine.
Public-private partners
Levchenko’s loss in court was a victory for the companies and individuals involved in developing Rybalsky Island. There are many of them, and virtually all are powerful and well-connected.
But the most important is likely also the least conventionally powerful: Andriy Vavrysh, a former Kyiv city official and current CEO of Saga Development (formerly known as Riverside Development).
In July 2015, as deputy director of Kyiv’s City Planning and Architecture Department, he signed the contract to produce the Rybalsky DPT.
Just two weeks later, on August 12, Klitschko signed an order removing Vavrysh from his post. According to the mayor’s document, the official was released at his own request.
However, in December 2014, Klitschko had Vavrysh temporarily suspended from his position and investigated for allegedly giving cover to unspecified corrupt practices. And during a July 2015 meeting of the anti-corruption council, Klitschko said he had asked Vavrysh to write a resignation letter.
Vavrysh denied any involvement in corruption and told the Kyiv Post he never had any conflict with Klitschko.
After Vavrysh left office, the Kyiv City Council passed the Rybalsky DPT that he had signed off on. But the former official already had a new role.
According to the official protocol, Vavrysh took part in a June 30, 2016 session of the a Kyiv City Planning and Architecture Department committee that considered the Rybalsky DPT as a representative of the investor in the plan, the Inter-Regional Center for Technical Inventorization.
Additionally, in the months after Vavrysh left the civil service, a new developer firm appeared: according to Ukraine’s unified company register, on Sept. 30, 2015, the company Riverside Development Ltd. was registered. It listed its address as 23B Electricians Street — the site on Rybalsky Island where the company would soon begin building a new housing development, Residential District Rybalsky.
As of 2016, Riverside’s beneficiary owners were listed as Antonina Volkova, the Inter-Regional Center for Technical Inventorization, and that company’s owner, Dmytro Ovsiy. And, in November 2016, Vavrysh became Riverside’s executive director, according to the company register. He is also the company’s founder, he told the Kyiv Post.
To build Residential District Rybalsky, Riverside chose as its partner the Perfect Group, a construction company that builds housing complexes across Ukraine. Little is known about the internal workings of the organization. It website does not list a director or executive, and it may not even be formally registered. That is likely because it is not a firm, but a group of companies that claims to have 30 members.
But while Perfect Group’s structure is mysterious, the parties building the Rybalsky complex are not, thanks to official documents published on the company’s website. The construction permit for the Rybalsky building site lists the Kyiv River Port firm as the party ordering the construction, while the general contractor carrying out the work is KDD Engineering.
Ownership puzzle
Understanding who exactly is behind these firms can be a challenge, according to activist Georgiy Mogylnyy, who advocates against illegal construction and has contributed to an investigation by Nashi Groshi.
“Nowadays, almost all companies are registered to offshores or nominal owners,” he told the Kyiv Post. “Few people actually put themselves out there and write their own names.”
However, in the case of Kyiv River Port, a fair bit is known. According to Ukraine’s company registry, Svitlana Brodska controls roughly 17 percent of the Kyiv River Port’s share capital and has 24 percent voting rights in the company through her firm Dandy Plus. Brodska is the wife of Mykhailo Brodsky, a businessman and politician who owns news outlet Obozrevatel, one of the most popular websites in Ukraine.
Meanwhile, RFE/RL’s Schemes has connected the River Port to both Brodsky and another powerful political player: Nestor Shufrych, a lawmaker with the Russia-friendly Opposition Bloc. The company is partially owned by two other firms: Suchasne Partnerstvo and San Galen Holding. Viktor Sydoruk, an aide to Shufrych, previously served as the former’s CEO. And the latter — which owns 25 percent of Kyiv River Port — shares a phone number with the Sikorsky Museum of History of Aeronautics and Aviation, an international charitable foundation. The co-founder of that foundation is Shufrych’s late mother, according to Schemes.
Another company is also likely connected to the businessmen: Kyiv River Station, whose name ties it to the derelict ferry station on the Dnipro River. In January 2016, the Segodnya news site announced that the station would soon be restored to feature restaurants, night clubs, and even a pool. The newspaper attributed the information to the “ideologue of the project and the representative of the River Station’s management” — Andriy Vavrysh. Indeed, Vavrysh is listed as the director of Kyiv River Station in the company registry as of July 2016.
However, beyond the big names involved in Residential District Rybalsky, there are also significant and ethically questionable ties between the government and the private sector.
According to the YouControl database of registry information, since April 2017, Riverside Development has listed its founders as two offshore firms: Trevor Business S. A. in Panama and Rockbery Invest Inc. in Belize. The two firms equally split Riverside’s unusually miniscule share capital, Hr 1,000 (roughly $36.50).
Trevor Business S. A. is also listed as co-owner of Kyiv River Station, controlling Hr 500 — or half — of its share capital. Due to Panamanian and Belizean legislation, the offshores firms’ beneficiary owners are confidential.
In June 2018, Riverside became Saga Development. It attributed the name change to a geographic shift in its activities. The company’s first development project, Residential District Rybalsky, was directly on the Dnipro River. Two years later, however, the company had ten projects broadly aimed at turning industrial zones into comfortable housing, the company said in a press release.
However, officially Saga is registered as a separate company from the Riverside.
Vavrysh’s trail
And that company was not registered in 2018. Rather, according to the YouControl database, it appears to have been initially registered in 2012 as Arkhmaket. As of 2017, it had changed its name to Riverside Development Co. And in 2018, it finally became Saga Development. Initially, the company’s founder and executive was listed as Iryna Terekh, who now runs cement design studio Dwell the Space.
However, in January 2017, Vavrysh became its director. And, as of March 2017, Trevor Business S. A. had taken over all Hr 10,000 ($371) of the developer company’s share capital. That offshore appears to have connections to Vavrysh long predating his work at Saga.
In December 2012, Kyiv’s City Planning and Architecture Department — where Vavrysh then worked — cut a deal worth Hr 8.53 million ($313,000) with company A+S Ukraine to create a transportation model for the city of Kyiv.
According to the Nashi Groshi investigative program, the only other participant in the tender to produce the model was the Terra Project company, which had the same address and phone number as A+S. Terra Project’s founder, Vyacheslav Bondarchuk, had previously worked for the private pension fund Tiger Sunny, which was owned by Tiger Asset Management. And the daughter of Liudmyla Ivasiuk, the latter’s co-owner until 2012, had worked for Vavrysh’s company Gabbro Plus, Nashi Groshi concluded.
However, there is another interesting detail about A+S Ukraine. According to YouControl, the company was founded in 2007 by German national Veit Appelt, who owned all Hr 46,000 (roughly $9,030 at the time) of its share capital. However, as of 2012, another owner had entered the picture and taken control of Hr 41,400 of share capital: Trevor Business S. A.
By the time Nashi Groshi published its story on the transportation model, Trevor Business S.A had already left A+S and been replaced by a man named Igor Kornev. However, its brief appearance in A+S indicates that the offshore firm is neither new, nor was Rybalsky its first connection to Vavrysh.
There is another connection: Trevor owns a 99-percent share in a company called Media Coworking LLC, which was registered in March 2018. The other one percent of the company’s Hr 1,000 of share capital belongs to its director, Dmytro Ovsiy — the same man whose Inter-Regional Center for Technical Inventorization was the “investor” in the contract to create the Rybalsky DPT.
A deeper dig online reveals that, in 2008, Ovsiy gave two interviews where he was presented alternately as lawyer and legal consultant to the company Terra Development. According to the company registry, Vavrysh owns a third of its Hr 500,000 ($18,577) in share capital. The rest belongs to the previously mentioned Liudmyla Ivasiuk.
Additionally, the YouControl database reveals that in January 2008 — when Ovsiy worked at the company — Vavrysh owned 99 percent of that same share capital and served as the company’s director. Only midway through that year did Ivasiuk take control of two-thirds.
Ovsiy did not respond to a request for comment by press time.
There is one more key piece of evidence. According to official documents provided to the Kyiv Post by a source who did not wish to be identified so as not to reveal the source of the documents, in July 2015, just a month before leaving office, Vavrysh signed at least three other contracts to produce DPTs. As in the case of Rybalsky, in all three contracts the “investor” was the Interregional Center for Technical Inventorization and the “contractor” was Terra Project.
Today, Saga is already building on a site outlined in the DPT contract: its Novy Podil housing complex on the right bank of the Dnipro.
What does this all mean? At a maximum, it suggests that Vavrysh used his post in the Kyiv city administration to advance personal business interests. At a minimum, it suggests that deep ties between an official and the construction business helped to get developers access to Rybalsky Island, something the General Plan and accountable officials might otherwise not have allowed. And that official himself also benefited from these ties.
Vavrysh’s take
Andriy Vavrysh makes a good first impression: stylishly dressed, calm, and erudite.
His office in Saga Development’s headquarters, on the top floor of central Kyiv’s elite 101 Tower business center, offers a breathtaking view of the city that Saga is developing.
Since its launch around 2016, Saga has gone from creating one housing development — Rybalsky — to 12 of them. Artist renderings of these residential complexes (most are still under construction) show hip, sleek, and modern buildings.
In contrast to Kyiv’s standard architectural fare — which tends toward decaying czarist era buildings and Soviet-style constructions alternating between bland and garish — these housing developments truly resemble something out of the West.
Vavrysh seems very much at home in this environment. When asked by the Kyiv Post why he left the Kyiv city administration, he quotes Friedrich Schiller’s drama Fiesco: “The moor has done his duty, the moor can go.”
He says there is no conflict of interest in his work on Rybalsky.
A construction team works on Chicago, a residential complex under construction by Saga Development, in central Kyiv on May 21, 2018. (Volodymyr Petrov)
“While working in the state service, the only thing I did vis-a-vis (Rybalsky Island) was to initiate that we need to create city development plans for that territory,” Vavrysh told the Kyiv Post. “But I didn’t have any ties to any development (of the plans) or to them being passed.”
After that, all his work was outside the state service. Vavrysh did it to continue the work he started in the city administration when no one else wanted to do it, he says.
“That probably predestined my choice of that territory. I really love Podil and I want it to look different, and simply didn’t abandon what I started in the state service. And I am going to continue,” Vavrysh says.
He believes his actions demonstrate “a degree of responsibility and not a conflict of interests.”
Vavrysh also puts little stock in claims that residential construction on Rybalsky will increase traffic or that the Rybalsky DPT violates the General Plan.
Kyiv has a history of bad planning that did not take into account available resources. In contrast, Saga was involved in a project to alleviate traffic in connection with Rybalsky Island, and the company is subservient to the city’s transport plans in this area, he says.
As for the DPT, Vavrysh stresses that the Supreme Court is on his side. He characterizes the General Plan and DPTs as contradictory documents that hold the city back. He notes that the General Plan calls for removing industry from the Dnipro to improve the river’s ecological situation. The DPT and Saga’s residential complex are doing that, Vavrysh says.
“We showed these activists many times: ‘Guys, please have a look at the acting General Plan,’” he says. “It’s written in big letters, but (Ukrainian) people love to perceive that it is only some kind of crime.”
Who benefits?
Whether you believe Vavrysh or the activists against residential construction on Rybalsky, many people are clearly benefiting from the DPT.
Vavrysh, Saga Development, Brodsky, and Shufrych are hardly the only ones. The winners also include some of Ukraine’s most powerful business people and politicians.
According to lawmaker Levchenko, who challenged the Rybalsky DPT in court, the obvious beneficiaries of DPTs are the developers that these documents — which Levchenko argues violate the city’s General Plan — allow to build.
But he believes that any account of the beneficiaries of construction on the island must begin with Kyiv’s mayor. Klitschko could easily have stopped this construction. He has been repeatedly told by activists that the DPTs are illegal, Levchenko told the Kyiv Post. Yet the mayor has never vetoed them.
“I believe that he gets a hefty percentage from all of these building sites,” Levchenko says. “I believe there are corrupt payments to him. Otherwise it wouldn’t work.”
Klitschko did not respond to the Kyiv Post’s request for comment by press time.
Beyond that, there are more straightforward beneficiaries. Businessman Pavlo Fuks, who controls land at the south of the island and has long planned to build on Rybalsky, is an obvious winner. Activists expect he will construct a residential complex on the land he controls.
In a message to the Kyiv Post, Fuks confirmed that he owns one land plot on Rybalsky Island, but had halted construction after 2008. He is considering restarting work on a development project there, he said.
He had no role in the creation of the DPT, Fuks added.
But perhaps the most interesting victor is President Petro Poroshenko. In late 2018, he and business partner Igor Kononenko sold Kuznya on Rybalsky to Sergiy Tigipko.
The president had faced criticism for owning the company which made its profit on military contracts. In November 2017, the National Anti-Corruption Bureau of Ukraine investigated the firm for alleged corruption and supplying overpriced equipment to the military, but nothing came of the charges. The Ukrainian government has also faced accusations of delaying the transfer of two Island-class patrol boats from the United States in order to avoid undermining Kuznya’s defense contracts.
However, in September 2019, Bihus.Info — the anti-corruption news site behind Nashi Groshi — reported that, shortly before selling Kuznya, Poroshenko and Kononenko transferred the real estate on the territory of the factory to a new company: Bud-Renovatsia. Poroshenko and Kononenko are its end beneficiaries.
Why would Poroshenko and Kononenko benefit from selling Kuznya, a working enterprise that receives state contracts? Because the factory requires modernization to be truly profitable. Meanwhile the land under it had little value while it was still zoned for industry.
But after the Rybalsky DPT, passed by a Kyiv City Council and supported by a mayor loyal to the president, the value of Kuznya — whose ownership grants access to the land below it — increased significantly.
Between 2016 and 2017, the estimated value of Kuznya’s net assets rose from $6.8 million to almost $11.3 million, according to data from Ukraine’s Stock Market and Infrastructure Development Agency.
In November 2018, Ukrainian media reported that Tigipko could have paid up to $300 million dollars for Kuznya. Using data from the same agency, activist Mogylnyy came to a similar conclusion, but says Tigipko may not have paid all the money up front.
Neither the Presidential Administration, nor Tigipko’s TAS Group responded to requests for comment in time for publication.
In a February 2019 interview with the Novoye Vremya magazine, Tigipko explained why he purchased Kuznya.
“Large amounts of territory on Rybalsky Island are not being used for production, and are being used ineffectively,” he said. “On that territory, we soon plan to launch a massive construction project. Most likely, it will be a residential area — with schools, kindergartens, and commercial real estate.”
Soon a website for the project had gone online. Lipki Island City Resort — to be built by City One Developers and Tigipko’s TAS Group — will reportedly feature 36 buildings ranging from two to 30 floors and will house 15,400 people.
But Mogylnyy, who so actively opposes the Rybalsky DPT, isn’t impressed.
“It has nothing in common with the DPT,” he told the Kyiv Post. “In the DPT it’s a middle-sized structure with 6–7 floors. Here it’s high-rises with up 30 floors.”
