Prosecutor Orders Probe in Alley One Construction Scandal in Varna

22 Nov

The Appellate Prosecutor’s Office in Bulgaria’s Black Sea capital Varna overturned for the second time the refusal of the Regional Prosecutor’s Office to probe the case involving the sale of land in the city’s Maritime Garden.

The Deputy Appellate Prosecutor had assigned the probe to the Regional Prosecution requesting clarifications on the deals surrounding the so called “Alley One” project.

The sale of the beach-front alley land plot to “Holding Varna,” which is a company belonging to the murky, surrounded by secrecy and legends, business group TIM, was done with the authorization of the former Governor of Varna, Hristo Kontrov. The deal for the total amount of BGN 11.7 M or BGN 100 per square meter of beach-front terrain was sealed in May 2009, just 2 months before the general elections, which brought into power the center-right Citizens for European Development of Bulgaria (GERB) party, replacing the socialist-led Three-Way Coalition cabinet.

Under the Detailed Urban Plan from 2002, the plot has been slated as an “Urban Coastal Zone” with recreational functions, however, the documents attached to the sale list it as an area for which there isn’t urban planning and with “unclear future,” leading to a significant price reduction in the appraisal.

According to the 2002 plan, the plot was part of the mega-project “Alley One,” to “modernize” the coastal line by building hotels, restaurants and a yacht port. But the Black Sea Coast Development Bill, passed in 2008, bans similar projects.

Kontrov claims he had approved the sale on the written request of the former Head of the Bulgarian Investment Agency, Stoyan Stalev, sent in April, 2009, in order to make the realization of the “Alley One” project possible. In 2007, the Agency awarded “Holding Varna” with a certificate for “Class A” investor for the same project, giving the investor the right to acquire terrains necessary for the project’s realization. In is unclear, how and why Stalev had recommended the sale of the land in 2009, despite the 2008 construction ban.

In the beginning of June, the Varna City Hall announced their decision to give rights for the construction of 5 buildings along the beach-front alley to “Holding Varna.”

The move stirred outrage among local residents and several NGOs, involved in the battle to preserve Varna’s beautiful park. Architect Kalina Pavlova, who leads the NGOs protesting against construction in “Alley One” vowed to file a claim with the European Court of Human Rights.

On June 9, the Varna Regional Directorate for Construction Control announced they were halting the controversial construction on grounds the Varna City Hall had violated the law by issuing building permits for beach-front construction. The permits are deemed illegal because they have been granted without preliminary approved projects for the buildings and permits for stabilizing the landslides and for the draining of the terrain.

The Appellate Prosecutor is now requesting clarifications on the status of the 5 sold land plots at the time the decrees to turn them into private-State properties in March 2009 were issued and to find out why the Deputy Regional Governor, Avram Todorov, and the Deputy Economy Minister then, Anna Yaneva, were given the authority to manage State properties.

The Prosecutor further asks to establish the reasons why the Council of Ministers failed to react to the change of the property status from public-State to private-State and to probe the sales transactions.

“Alley One” is a prime beach-front property in Varna’s beautiful Seaside Garden