The Kyiv City Council has published a draft decision proposing the privatization of the Zhytniy Market, with the condition of preserving its functionality, appearance, and integrity of the property complex, along with mandatory repairs within three years.
According to the text of the draft decision by the Kyiv Council, the KP "Zhytniy Market" (Verkhniy Val, 16) is removed from the list of objects not subject to privatization, and an auction for the sale of the single property complex of the Zhytniy Market must be conducted through the electronic trading system "Prozorro.Sales".
Kyiv Council member (Holos faction) Taras Kozak explained this change in the decision regarding the fate of the Zhytniy Market as an economic necessity.
"Renovating at the expense of the Kyiv budget is not an option; during wartime, it is far from a priority. Besides, the city is not efficient at doing this. Leasing/management is also not an option - it has been tried multiple times without success. The cost of capital investments to bring the Zhytniy Market to an adequate condition ranges, based on my information, from 118 to 700 million UAH. I personally lean towards the figure of 400-500 million UAH, approximately EUR 10 million. Will there be a tenant/manager willing to invest such a cosmic amount in someone else's property? I don't believe it! Moreover, often behind leasing hides a shadow buyout at a ridiculous price. We've seen this many times," he wrote on Facebook.
That is why he considers the option of privatization at an open auction to be optimal.
"If done correctly, the price at such an auction could increase several times. And it will definitely be the maximum of possible options. The funds raised from the sale could be used to support the Armed Forces of Ukraine and for other city needs," Kozak explained.
"Leasing itself is an unviable business model. The practice where a tenant invests in a property and then has the right to purchase it without an auction will soon be abolished (draft law No. 12230 was adopted in the first reading on January 16 – IF-Ukraine). Thus, the only way to attract investment in the project is through privatization," commented Andriy Zhurchiy, founder and CEO of the investment company Inzhur, to the Interfax-Ukraine agency.
As reported, the investment fund Inzhur announced in April 2024 the need to conduct a privatization auction for the purchase of the Zhytniy Market building in Kyiv from communal ownership. Earlier, on March 18, the Department of Communal Property of the KGGA scheduled a tender for the lease of the Zhytniy Market for March 25, which was later postponed to April 15. The starting price was set at 2.4 million UAH per month. Following public outcry, the Kyiv City State Administration suspended the auction and announced its intention to develop new conditions and requirements for investors.
Zhurchiy reminded that the Zhytniy Market building is prohibited from being used due to a court decision related to its inadequate technical condition.
"There is no fire alarm system, no ventilation, no bomb shelter, and no conditions for people with reduced mobility. According to our estimates, the capital renovation of the building will require 500-700 million UAH in investments," Zhurchiy stated.
The Kyiv Council’s draft decision proposes to include in the contract the requirements for preserving the functionality and appearance of the Zhytniy Market, obliging the buyer to carry out capital repairs within three years from the date of purchase. In case the owner fails to fulfill the obligation to carry out capital repairs within three years from the date of purchase, the community must repurchase the property.
"An investor who buys this building at auction and then invests 500-700 million UAH in its capital renovation and adaptation to modern requirements will take about 10-15 years to recoup those investments. That is why privatization is the best guarantee that the Zhytniy will not meet the fate of the Senniy Market," Zhurchiy believes.
According to the transformation project for the Zhytniy Market developed by Inzhur in collaboration with the international company Colliers and the Ukrainian architectural and engineering company AVR, it is proposed to develop a multifunctional space (traditional market; food hall; cultural center; event venue). The goal is to make the space inclusive, safe, eco-friendly, and energy-efficient. The Zhytniy Market itself has the potential to become a business incubator for Ukrainian farmers and food producers, and during the major renovation and finishing of the updated market, priority will be given to Ukrainian businesses. The number of visitors after the update could increase to 10,000 daily.
"The Zhytniy Market should receive a heritage protection status. Then the ideas of leasing/selling will not instill fear in the Kyiv community. The future tenant/owner should not fear the status of a newly discovered monument — they will receive a unique property, and the city must, first and foremost, protect its history and values," wrote Kyiv Council member Yevheniya Kuleba on Facebook.
The Zhytniy Market in Kyiv's Podil has continuously existed since at least the 11th century. In 1980, a group of Kyiv architects constructed the existing building of the covered market, which became the largest in Europe (almost 2,000 trading places). Its facade is decorated with metal panels on the theme of the history of Kyivan Rus.
https://kmr.gov.ua/uk/content/proekt-rishennya-kyyivskoyi-miskoyi-rady-28977?fbclid=IwY2xjawH_F5pleHRuA2FlbQIxMAABHfxauZtu1SamE5LOjzaxVDri4C2uudiTdyVXvWuWG4pQMZ3Ewq7rWCHjXQ_aem_k5ftJ1n2IoiwJXBTJLU-wA
https://www.facebook.com/znenya.kuleba/posts/10159341405234229?ref=embed_post
https://www.facebook.com/t.m.kozak
https://www.facebook.com/story.php?story_fbid=28093613276948746&id=100001803482161&rdid=Nc9ZlDhMlVaY3H1f#