The Olympic Land Grab

For people who call Sochi home, the lasting legacy of the Winter Olympics will be the Olympian land grab that preceded the games.

In 2007, after Vladimir Putin triumphed before the world in bringing the Olympics to Russia, real estate prices in Sochi exploded, as developers bought into his vision of a Russian Riviera for the country’s jet set.

Locals hoped the influx of petrodollars would lift the community higher. Regional officials saw a business opportunity.

Properties that sometimes had nothing to do with the games received an “Olympic” designation overnight. Owners were offered below-market compensation or faced a futile struggle in Russia’s Kafkaesque court system. Few people protested. Often residents discovered that the law wasn’t even on their side.

* * *

Valery Kravchenko, 47, grew up in a two-story building between the railroad tracks and the beach, where his parents received a room in a communal apartment in 1968. When I met Kravchenko in July 2011, his home was slated to make way for the expansion of Sochi’s rail hub. The building still had no indoor plumbing; propane gas tanks were used for cooking; wood stoves heated the rooms.

Kravchenko, who worked for a city utility, was the first to admit that living conditions were substandard – and that the apartment being offered as compensation had modern conveniences.

Kravchenko and his neighbors found their homes undervalued and now risked having their properties confiscated.

The hitch was that the new place was on the very edge of town, far from the beach and worth less than half of what Kravchenko valued his property. Because Kravchenko’s share of common space and a wooden addition where his sister and niece lived weren’t listed in his privatization papers, they didn’t count.

Kravchenko’s neighbors found their homes similarly undervalued, and having turned down the regional Olympic Department’s offer, they now risked having their properties confiscated.

“People are being painted into a corner,” said Alexei Kravets, a lawyer who was representing the residents. “The majority of people sign because they’re scared.”

* * *

Kravets, 38, knew what he was talking about.

He owned two houses, with a total area of 200 square meters (2,200 square feet), on the nearby waterfront. The authorities, who had declared that the land would be needed for a road, were offering a one-room apartment, less than a tenth of the size, as compensation.

Because of the corruption and red tape involved in receiving a construction permit in Russia, most people build first and ask questions later. Kravets’s mistake was that he had filed the paperwork to legalize his houses too late. It wasn’t his fault that his beachfront property had come to the attention of the Russian state.

“Officially they need this land for a road, but it’s three meters from the beach. It’s clear there won’t be a road here,” said neighbor Sergei Konkov. “I think some big boss from Russian Railways will end up running a private hotel here.”

“We’re ready to go, but with some human dignity. They stole so much and still can’t solve the issue of resettling 1,000 Sochi families.”

Konkov, 53, a retired bank director from the southern Russian town of Volgodonsk, had bought his Sochi property in 2007 in the hope he could supplement his pension by renting out four spare rooms to vacationers. Now appraisers from state construction company Olympstroy had valued his property at less than half the 16 million rubles ($500,000) that he believed it was worth.

Konkov said that he’d appealed to Putin and Dmitry Medvedev, then president, numerous times. He attended protest rallies until the city banned them. The case was stuck in the courts.

“We’re ready to go, but with some human dignity,” said Konkov. “They stole so much and still can’t solve the issue of resettling 1,000 Sochi families.”

* * *

The neighborhood wasn’t exactly a beach paradise. Some of the structures were little more than shanties, others relatively new mini-hotels. The pebble beach was crowded and dirty. It wasn’t even cheap, especially in comparison to seaside resorts in Turkey and Egypt.

In Sochi, the common sentiment was that outsiders from Krasnodar, the regional capital, were using the Olympics as a pretext to seize the choicest land for themselves. Putin wasn’t seen as the villain as much as Governor Alexander Tkachyov, who had installed a sidekick to run Sochi.

When I covered the mayoral elections for Bloomberg in 2009, I tried my damndest to interview Anatoly Pakhomov, Tkachyov’s candidate. Pakhomov, an apparatchik from Putin’s United Russia party, was being carefully guarded. At the time, his spokeswoman gave three different excuses why he was unavailable: he was in a distant Sochi district without phone coverage; it was against the law for him to talk to me; and he was busy “filling the information vacuum on the Olympics.” Pakhomov won with a landslide.

After hearing stories of people losing their homes during my last visit, I decided it was time to try reaching Pakhomov again. He seemed flustered that I had gotten my hands on his cell phone number. When I explained that I just wanted to discuss the situation in Sochi, he replied: “What do you mean, ‘situation?’”

Couldn’t I understand that he was terribly busy? In fact, he was off to open a kindergarten that very moment. Pakhomov referred me to his spokeswoman’s assistant. Good-bye.

* * *

Of course I knew that I was on the local FSB’s radar – after all I was checked into a hotel, getting official tours of Olympic sites and meeting with activists in public places. But for the first time in my eight years as a journalist in Russia, I felt like I was being watched.

As I returned to my 13th-floor hotel room from breakfast one morning, two 30-something fellows were waiting for the elevator when I got out. They were wearing the standard uniform of a male guest of the Hotel Zhemchuzhina: tank-top, shorts and rubber slippers.

I knew that I was on the local FSB’s radar. But for the first time in my eight years in Russia, I felt like I was being watched.

When I met a local journalist in the lobby café later, the two men sat down on a couch across from us, just out of earshot. They ordered tea and engrossed themselves in their newspapers. Later I found the fatter of the two still reading his paper next to the elevators on my floor.

In the evening, I agreed by phone to meet a local environmentalist in the lobby café. When I got there, my two new friends were already waiting. The activist suggested we try somewhere else.

It was almost midnight when I came back. The activist had given me a DVD documenting environmental violations during Olympic construction. I had to walk down a dark footpath, lined with shrubs and trees, to get to the hotel entrance. A young man stood up abruptly from a bench just as I passed him.

I was ready to defend myself. Fortunately, it wasn’t necessary.

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