While Larnaca anticipates landscape-changing developments, other projects have been cancelled with investors backing out such as the Russian who wanted to build a €170 mln luxury hotel on the seafront.
Larnaca is to be reshaped with the new Port and Marina, a first shopping mall, and luxury high risers but other big-ticket projects have been dashed.
Earlier this year, Larnaca’s dream of hosting the School of Marine Sciences and Technology of the University of Cyprus was buried under concrete when the government rejected the project over high costs.
Another project that went up in smoke is a multi-million investment by a Russian investor who has now backed out after a dispute with the municipality. Each side blames the other for the collapse.
Russian businessman Nikolai Potapenko, the investor behind the real estate project claims local authorities buried him in red tape.
Andreas Zachariou, the businessman’s lawyer, told the Financial Mirror that Potapenko was to invest €170 mln but the project got stuck in seven years of bureaucracy.
Potapenko bought some of Larnaca’s prime land on the Phinikoudes with plans to build a 100-room five-star hotel and a 30-story building dubbed the Larnaca Tower.
The hotel proposed by the Russian investor would have been the town first five-star hotel.
Zachariou said his client finds Larnaca to be a beautiful and picturesque city with a huge history but the centre requires significant investment to improve its attractiveness.
“We tried to change this situation by investing €170 mln in the construction of two hotel units, but we were not permitted to do so. The officials will not be held responsible.”
Potapenko, who has lived on the island for 30 years, has demonstrated outside the Presidential Palace carrying placards saying ‘Cyprus is not for legal investors. Waiting 7 years to issue one license’.
He applied for a building permit at the site of the Hobos Steak House restaurant on Larnaca’s seafront seven years ago, and to date has not secured the required permit.
In 2018, reportedly Potapenko had already pumped about €1.5 mln into the project to include a 20-floor luxury hotel, a spa, conference centre, apartments, commercial units, cinema, and a rooftop restaurant.
Serious money
“My client has injected serious money into these projects, with €35 mln just going into the acquisition of the property where the Larnaca Tower was to be built,” said Zachariou.
“Red tape procedures, combined with the lack of vision on behalf of the authorities, have led us here, with Mr Potapenko no longer interested in the project.”
“Seven years and the local authorities have not issued a license for a substation of the Electricity Authority of Cyprus to be moved from the property to a nearby location.”
In response to Potapenko’s claims, Larnaca Mayor Andreas Vyras told the Financial Mirror, there was good reason for the delay, and the municipality was not to blame.
Vyras argued that Potapenko had changed his plans four times with the latest plan for the site given by the businessman in February.
He argued that the derogations council is an independent five-member committee that submits to cabinet its suggestions about large developments, found serious omissions in the information it received from Potapenko.
“Initially the investor had filed for construction of a large hotel development in the sensitive coastal area of Phinikoudes, within Larnaca’s central shopping area and the urban centre,” said Vyras.
According to Vyras, Potapenko’s latest plan proposes a pure tourism development, for which planning permission is needed for the change of use and exceeding the building coefficient.
“He wants to build a 90-metre tower at Phinikoudes, so he has to go through the derogations council and do an environmental study,” Vyras said.
He said the investor’s plans would involve closing off the town’s commercial centre, “which just isn’t possible”.
A local real estate expert told the Financial Mirror that despite the loss Larnaca could well do without this development.
“We’re not quite sure if Larnaca really needs a five-star hotel, especially when it will come at the expense of the environment.
“Building high risers on Larnaca’s coast would mean these buildings would be pumping massive amounts of seawater from under the foundations to avoid corrosion,” said the expert.
The real estate expert argued that Larnaca is on course to catch-up other cities as far as development is concerned with the Larnaca Marina and Port project, which includes a yacht club with a retail park, plus hotels, private island and residential properties.
“Approximately 20,000 sqm of university lecture and research theatres will be built where a Medical School will co-exist next to a Medical Centre, a Hotel and Hospitality College and a Blue Marine, Environmental and Energy University.”
