Is building a café for a private individual a matter of public interest? An expert from the Corruption Prevention Commission notes the presence of corruption risks.

"There are corruption risks. If one company has leased the space, everything is functioning normally and profitably, then why do they want to take it away? They don’t do it without a reason," said Varuzhan Hoktanyan, Program Director of Transparency International Anti-Corruption Center, in an interview with Pastinfo, referring to the Yerevan Municipality’s initiative to declare the 4th section of the Circular Park as a matter of public interest and replace the tennis courts with cafés. The TIAC expert notes that it is necessary to find out who is actually behind this.

Pastinfo had previously covered the operation to “seize” the park area in more detail in its June 16 article titled “Business Seizure Operation with Active Participation of City Authorities.” As reported, in May 2023, Mayor Tigran Avinyan announced at a city council meeting that the Chairman of the Board of Evocabank had donated 300 million AMD to the community for the reconstruction of a sports school, calling it an exceptional gesture. However, by January 2024, it became clear that the city authorities intended to take over the 4th section of the Circular Park from its current owner and transfer it to a company managed by Marieta Gevorgyan, the main shareholder of Evocabank—all under the guise of declaring it a matter of public interest.

Varuzhan Hoktanyan, in an interview with Pastinfo, described the process as strange, also noting the presence of corruption risks.

“I suspect there is some synchronization here, meaning they are trying to seize the property in that way. In reality, it’s not even their property; it was leased from the municipality. However, this is a very strange situation,” said Hoktanyan.

He added, “I also understand they plan to build something on Bagratunyats Street, something like tennis courts. I’m not sure if that’s really the case, but that’s what’s stated on paper. They intend to build a similar complex on Bagratunyats Street, naturally for the wealthy, and then present it as if they’ve simply relocated the facility so people can still play tennis. It seems they are preparing such a scenario. But even that doesn’t justify their actions because, if we truly lived in a civilized country, they would first build an accessible, beautiful, and comfortable sports complex.”

Hoktanyan also pointed out another issue: “The tennis courts were, in a way, part of the city’s identity. Back in my student years, many people used to go to those very courts, and that tradition might still continue today. From an aesthetic perspective, it’s rather unpleasant to see a café replacing tennis courts, especially considering there are already so many cafés in the Circular Park.”

“After all, should building a café for a private individual really be recognized as a matter of public interest? I mean what have we come to? If they truly intend to build a café or something similar there, or generally if that area is going to be handed over to a private entity rather than used for constructing a state-owned building or a structure of public significance, then maybe, though I wouldn’t call it the right decision, it could somehow be understood,” said Varuzhan Hoktanyan. “But if they want to take over land under the label of ‘public interest’ just so a private party can build something and profit from it, then that completely discredits the very concept of public interest. You cannot do such a thing under that pretense.”

He continued: “Although this was a widespread phenomenon in 2007–2009, if this goes forward now, we’ll be forced to acknowledge that nothing has changed, that what was done then is simply repeating itself today. In that case, the question arises: what was the point of what happened in 2018, if everything is just ‘coming full circle, meaning we’re reverting to the same old methods? To put it mildly, this is a strange, troubling, and negative development.”

The TIAC expert emphasizes that corruption risks are present starting with the fact that the company involved was established literally just a few days ago. Moreover, it’s necessary to determine who the actual beneficiaries are beyond the officially declared one.

“In reality, there are connections that go beyond the officially stated beneficiary: someone’s acquaintance, friend, former classmate... Perhaps an investigative journalistic inquiry is needed to uncover who these people are, what they do, how they operate, and who they associate with. For me, the key question remains—who are these people? Sure, formally we know who owns 100% of Evocabank’s shares, but we need to understand whether there are hidden connections, or if this is just a business deal that, as usual, recognizes no moral boundaries,” he said.

Our interviewee points out:
“One company has leased the area; everything is functioning normally and profitably, so why do they want to take it away? They’re not doing it without a reason. It would be a different matter if there were plans to build a new, modern, impressive sports school or center, then we could say, fine, someone more ambitious has come along who wants to do that.

But from what I understand, it’s not that kind of company that is trying to acquire the space. I doubt their goal is to build a grand new tennis court and sports school, I really doubt it. More likely, as is common with many of our businesspeople whose imaginations are quite limited, that imagination only stretches as far as building food service establishments, not anything involving higher aspirations.”

When asked why the authorities ultimately chose to go down the path of declaring the area a matter of public interest rather than simply terminating the lease agreement, Hoktanyan responded:

“That was actually the first question I asked myself, and I don’t have an answer. Why was it decided to declare it a matter of public interest? Perhaps because the land is state-owned and leased out, and that’s being used as the basis to terminate the lease. In other words, to create a cause-and-effect justification: under the label of public interest, they can reclaim leased areas.”

He added, “I assume, speaking in plain terms, that they couldn’t ‘dig up any dirt’ on the current leaseholder. The payments were being made, the business was functioning properly, it was profitable. And then suddenly, they decided to declare the area one of public interest.”

“Maybe. Either the leaseholder was genuinely operating well, or I don’t know what really happened. It’s truly strange that they didn’t choose another route. They could have tried to declare the property as one of illicit origin…

Although, if we’re talking about illicit property, then this is a lease, it’s not even their property. If the area was leased, then the only thing they could possibly claim is that it was leased out as a form of bribery. But even that would be a very weak basis,” he noted.