Alexey Baranov, A Development: Builders from the Philippines and Pakistan will be brought to Ukraine. It's something we are destined to face.
Baranov worked for many years with the group of well-known businessmen Vasyl Khmelnytskyi and Andrii Ivanov before founding his own company, A Development. However, he still relies on the financial resources of his former employers.
The implementation of A Development's new ambitious project – the residential complex "Rikhert & Park" – has stalled due to opposition from activists. The peak of the confrontation was a petition on the Ukrainian president's website demanding to terminate the land lease agreement with the developer and establish a national park.
The positive response from Volodymyr Zelensky to this petition came as a complete surprise: he instructed the Ministry of Culture to develop the necessary documents. Baranov is astonished by this reaction and is prepared to defend his position in court.
Who helped the petition for the park gather 25,000 votes? Why does Baranov meet with members of Leonid Chernovetskyi's "young team"? Why did Mykola Azarov reprimand Baranov?
About Oles Dovhyi and working in Azarov's government
— Six months ago, I saw you with MP Oles Dovhyi at Arsenal Square. What was the topic of your meeting? What did you discuss?
— Oles is my friend; we have known each other for a long time. We just met up; I have no dealings with the authorities. I work in a clean market and have no need to interact with politicians or officials.
— Have you been friends for a long time?
— Probably since 2012-2013.
— Dovhyi was the secretary of the Kyiv City Council under Leonid Chernovetskyi and was involved in the distribution of municipal enterprises for development and land alienation. Does he still have influence over land issues in Kyiv?
— That question is not for me. I did not work in Kyiv during the time he was secretary of the Kyiv City Council, and I am certainly not ready to discuss my friends' work.
— You don’t discuss land issues with him?
— Of course not.
— You are a graduate of the "Kyiv Investment Group" of Vasyl Khmelnytskyi and Andrii Ivanov. You now have your own company, but you collaborate with their company UDP on specific projects. How would you assess your independence from your former employers in percentage terms?
— One hundred percent. In projects where they are partners, or rather co-investors, I am the managing partner, so I make the decisions. Of course, we consult on certain issues, but the business strategy and model are my personal decisions.
— You refer to UDP as a strategic investment partner. If translated into simple terms, do they provide the money for construction?
— Partners are needed in several cases: when funds, competencies, or other partner opportunities are required. We are in partnership with UDP in several projects: the military commandant’s office at "Arsenal," White Lines, "Rikhert & Park," and "Bolshevik."
— Is UDP the first place you seek funding from, or do you only turn to them when you can't find financing elsewhere?
— Construction is a very capital-intensive industry, requiring significant investments. In the project, I share not only profits but also risks. A project can take seven to eight years to implement, so it's better to have a reliable partner whom you trust.
— You worked as Deputy Minister of Transport under Kostiantyn Yefymenko. In 2010, the Cabinet of Ministers issued a reprimand to you. For what?
— I worked as a civil servant for two years, which was enough for me. Although it was an interesting experience because macroeconomics comes into play, and we managed an entire sector. When we were working, the Ministry of Transport had 700,000 employees directly under its control—from "Ukrzaliznytsia" to "Ukrposhta." I was responsible for road transport and preparations for "Euro-2012."
I received the reprimand because there was a desire to give terminal E at Boryspil Airport to Duty Free without a competition. I opposed this, and Azarov reprimanded me for it.
— How was it to work in Mykola Azarov's government?
— There were many powerful people there who had experience managing large projects. If it weren't for Borys Kolesnikov and the head of the National Agency for preparations for "Euro-2012," Volodymyr Kovalevskyi, there would have been no "Euro-2012" in Ukraine.
They took over when construction of the arena in Lviv and the airport in Donetsk had not yet begun, and the reconstruction of the Olympic Stadium in Kyiv was underway. These issues were resolved very quickly in front of my eyes. Most of the infrastructure projects implemented under that government remain the largest in Ukraine to this day.
— Being responsible for preparations for "Euro-2012" with its bottomless budgets is a gold mine. Did you earn capital there to start your own business?
— The Ministry of Transport did not have a budget for "Euro-2012." All budgets were centralized and came from the "Directorate for the Construction of Facilities for Euro-2012." The Directorate was not subordinate to us at all, and I earned money in business.
— Did you live in Crimea from the moment it was occupied until August 2014?
— My family lived there until the summer of 2014, while I worked in Kyiv and visited occasionally.
— What was life like in occupied Crimea?
— The occupation of Crimea is not the occupation of Mariupol or Donetsk. Crimea was surrendered without a fight, without a single shot. There were no "anti-aircraft" operations; no one was killed. Legally, it was not an occupation but an annexation. I did not live in Crimea under Russia.
"Developers are feeling the squeeze"
— Your most well-known project is A-Station – the restoration of the Arsenal factory buildings, the military commandant's office, and Arsenal Square. This project is praised by architects, urban planners, and Kyiv residents. Is it profitable?
— Of course. Real estate is profitable in any case; the question is the profit margin. "Arsenal" became successful because we laid the right functions into it.
— So it’s not necessary to demolish historical buildings and build 25 floors for a project to be investment-attractive?
— Why did Kyiv go the way of high-rises? Building mid-range or premium-class facilities is expensive. There is no free land; all projects are redevelopments of former factories. Buying a factory is already a significant investment. Then comes the work with documentation, changing the land use designation, designing, and obtaining a construction permit. Investments in real estate are capital-intensive.
The price per square meter in Kyiv is 40% lower than, for example, in Warsaw, so developers… I don’t like that word; I prefer "developer." Therefore, developers are going "upward."
— You didn’t take that path, and you have a profitable project.
— I have the opportunity to do what I like. I saw the idea in European Union countries and brought it here.
— Why don’t other developers see the path of restoring historical monuments?
— "The squeeze." They want more profits. To each their own.
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