St-Petersburg authority legalizes “squatter” village

Some six years ago, a group of businessmen from St-Petersburg started to build up the seashore of the Finnish Bay. The city authorities give a green light to building cottages, hotels and apartments even in the absence of building permits.
05.12.2016
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Hotel mirage

The town of Zelenogorsk 50 km west of St-Petersburg once was a place for children summer camps, cottages and recreational areas. Now it has been occupied by developers of elite residences and yacht clubs.

Seven years ago the Yacht Club Terijoki Invest (YCTI Ltd) received several land plots to build a hotel there. Then-governor Valentina Matviyenko signed an order in 2009 to allocate over 52,000 sq m for the project.

The next year, she signed another order allocating two land plots for the YCTI, 19,341 and 7,629 sq m for 49 years. In exchange, the investor was obliged to transfer to the city budget the rent payments of $1,000,000 (at 2010 exchange rate).

Yet in 2008, the Delovoi Peterburg publication reported that the YCTI and its affiliates, former owner of the Morskoi Facad developers holding Kirill Krutikov (he was also the Director General of the Zelyonaya Strana hypermarket chain), had received three land plots for hotels construction.

The DP had estimated the investments into those projects of $45-100,000.

Still, two of those three land plots had remained empty and no rental payments were transferred.

This is why in 2013, the St-Petersburg’s city property committee sued the YCTI demanding to pay arrears of $166,000. The court had ruled in favor of the claimant.

In February 2014 Matvienko’s order No2 of 2010 was terminated. In June, these plots became of interest of another investor which has been anonymous. It plans to build a sport facility there.

There is nobody home

The land plot of 53,008 sq m had remained beyond the property committee’s scope. Yet in 2013 various media reported that nine cottages had been built instead of the hotel. To clear the territory for them, three early 20th-century villas (once home for a child sanatorium) were demolished in September 2011. One of those villas was visited by Karl Mannergeim in 1930s.

The cottage village comprises nine houses, each built on individual design but in the single “Northern Modern” style. Each houses has a backyard of 30 to 60 acres.

The demolished "Bianca" villa
The demolished "Bianca" villa
The demolished house of the Orthodox priest Mikhail Orfinskiy
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“Life in Zelenogorsk is a real pleasure, provided by its pine forests, sand beaches and sounds of tide swash”, the advertisement says.

Three houses have been on sale for the maximum price of $2,600,000.

Screenshot of the advertising banner
Screenshot of the advertising banner

The village entire territory of   50 thousand sq m formally lacks private owners or lenders and all houses there have been registered as non-residential build-up. The houses formally remains property of the YCTI. Perhaps, their actual owners are reluctant to expose it.

Today a few houses in the village are for sale
Today a few houses in the village are for sale

Career Foundation

The YCTI Ltd has been reorganized since December 2015. In March 2016, its registered capital was increased from $ 660,000 to $1,000,000. The YCTI founders are UK Kremlin and Yacht-club Terijoki JSC (registered in 2008 by offshore companies The Provident Invest Corp and The Mahogany Holdings Ltd with the above mentioned Kirill Krutikov as the CEO).

In 2009, the YCTI built a hotel near the cottage village, but the land under the hotel has been registered to no one.

The yachting club, hotel and cottage village all belong to Krutikov, who used to be the owner of the Baltgazkompleksimpeks JSC and a co-owner of the Morskoi Fasad holding (one of the latter’s project was construction of the $1-bln building estate in St-Petersburg).

The land plot of 53,008 sq m had remained beyond the property committee’s scope
The land plot of 53,008 sq m had remained beyond the property committee’s scope   

The other co-owner of that project use to be the State Duma member Vitalia Yuzhilina. They jointly founded the Eurogarden company in 2007. At that time, Krutikov planned to open 20 hypermarkets by 2012.

In 2011, he established the Investgrup Ltd jointly with the offshore Overmarch Ltd (British Virgin Islands). In 2015, its current account was equal to $1,2 mln. Krutikov, in partnership with Olga Lashkova, had also registered the Yacht Port Terijoki Ltd.

Krutikov’s most profitable business started in 2004 when he had become the president of the Oraniebaum Foundation created to restore and develop that historical palace and park estate. The foundation had been created under auspices of then-Minister for economic development German Gref.

The idea was supported by the National Container Company and the Uralkalii, which contributed $2 mln to the project. The Oraniebaum’s BOD was headed by Valentina Matvienko with German Gref and then-Minister of transportation Sergei Frank as co-chairmen.

After restoration of Oraniebaum was over, Matvienko had ordered to grant the lands in Zelenogorsk to Krutikov’s company.

Five years ago, one more company with nearly the same name, the Terioki Ltd, had also started to develop the seashore near Zelenogorsk. The company belongs to the acting director of the Polar Academy Valery Mikheev, a lawyer Andrei Komissarov and the director of the Nevskaya Concession Company Valery Fotchenko.

In 2011, the Terioki built two 4-storey building directly withing the Zelenogorsk public park, close to Krutikov’s Terijoki hotel and yachting club.  The buildings have been designed as sporting facilities. However, as the local activists had found out, the buildings were actually the luxury apartment blocks.

The activists paid attention of the state construction watchdog which in 2012 won the case against the developers. Still the buildings remain in place so far. Moreover, in 2015 the St-Pete city hall decided to legalize the project.

The saga was over on Nov 16, 2016. The 90-sq-m building will be demolished and construction the 1259,3-sq-m building has been formally authorized.

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