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Avoiding awkward and unpredictable public auctions – Odessa

May 28, 2017

Odessa City Hall owns a lot of historical buildings in the city centre.

Criminally orientated local city governments past have however managed to refrain from blatantly flogging off these historic buildings via opaque methods on a large scale.

No longer.

The current Odessa City Hall governance, under the leadership (or perhaps management) of Mayor Trukhanov, a man whose organised criminality is no secret, is now selling off prime historical publicly owned buildings in the city centre – and doing so whilst avoiding those awkward, unpredictable public auctions.

Naturally the claim by City Hall, no doubt with some merit, is that the maintenance of these properties is an expensive undertaking and that such costs can be both saved and passed on to new owners whilst also putting funds into the City coffers.

Well fair enough if that be the policy and there are no significant public objections – on the proviso that any new owner is lawfully obliged to maintain the architectural integrity of the buildings they purchase and/or the overall architectural ambiance of the immediate vicinity of their new acquisitions in the historical city centre.

However, it is the manner in which these sales are made that catches the eye – namely the willful avoidance of unnecessary publicity and public auction of public property.

The City Hall scheme is not only apparent, it is in fact blatant.  It is the most blatantly dubious/nefarious property scheme since the most obvious and impressive fraud conducted under Mayor Trukhanov’s tenure was rudely waved in the face of the local tax-paying constituency.

The current nefarious scheme works thus – Prime historical property owned by the City/people and managed by City Hall is leased to (often offshore, but not exclusively) companies for a period of 7 – 10 years at the decision of City Hall.  In short it determines who gets to lease what – as expected for a city administration.

For those readers now considering the possibilities for corruption in leasing allocation – hold that thought.

As part of the lease, within the clauses can be found the right to first refusal when it comes to any future purchase during the validity of the lease.

Within weeks of leases being signed, City Hall then makes the decision to sell these leased prime location historical premises.

The new tenants eagerly invoke the first refusal right to buy clause, happily meeting the often low valuations of City Hall.  Indeed the new owners are undoubtedly “very grateful” and “willing to show their appreciation” to those that facilitated such acquisitions.

In short, City Hall chooses the property, those who it leases too, and ergo who it will sell these properties too while avoiding any unnecessary publicity, and critically any public auction requirements – all under the veil of saving public funds.

Taking the last six weeks as a petri dish, Grecheskaya 40 was leased to Jacksonville LLC on 11th April.  A mere two weeks later the decision to sell was made and Jacksonville LLC bought the premises – no public auction and no public discussion.  Jacksonville LLC only two days ago leased neighbouring Grecheskaya 20 – clearly there will soon be a decision to sell that too – and guess who will buy it?

Also in the last six weeks Potoki House on Primorsky Boulevard was leased by Invest Development LLC, 1 Chernomorka, recently leased by Cano Trade, will be placed for sale imminently by City Hall.  Having leased Varna 27, Transkomstroy LLC are about to benefit from a decision to sell that premises too.  How fortunate for Transkomstroy that a previous lease at Varna 27/1 was recently put up for sale and bought by them.  Another beneficiary in the past six weeks is Kirillov AV who no sooner leased Propsect Freedom 95 than were presented the opportunity to buy when a decision to sell was made – again without public auction unpredictability and transparency.  Langeron 1/1 leased so recently the ink must still be wet will now also be sold – no doubt to the “lucky” restaurateur that leased it.

Widening the time frame aperture simply lengthens the list of property leased and then almost immediately put up for sale and subsequently sold to the very recent tenants.

Clearly it is a dubious scheme denying public auction and transparency at best, if a reader were to take a charitable view.

For those that fully recognise Mayor Trukhanov and numerous highly placed City Hall officials for what they are then naturally there will be no charity when viewing such a blatantly nefarious scam.

Prima facie (any backhanders aside) this is entirely legal – as the best criminal conspiracies always are.

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