YEREVAN (Arka)—Koryun Grigoryan, a press officer for Armenia’s largest sports and concert arena in Yerevan, the Karen Demirchian Complex, condemned the government’s decision to renationalize the facility in payment for its owner’s debts to the government totaling about $25 million, saying the real cost of the facility is $120 million.
Under an Aug. 21 government decision, the facility was placed under the management of the defense ministry.
The facility was built in 1983 and was later named after Karen Demirchian, a late Soviet Armenian leader who initiated its expensive construction. The complex comprising two large halls was sold in 2005 to the Moscow-based construction firm BAMO, belonging to an Armenian-born Russian businessman, Murad Muradian, who paid $5.5 million for it and pledged to spend over $40 million on its renovation.
The facility was seized by the state Service for the Mandatory Execution of Judicial Acts (SMEJA) in late July which tried to auction it off but failed to attract buyers, despite lowering the price from $47 million to $25.5 million.
Grigoryan said the facility’s cost was calculated based on the cost of a squatter meter of housing in the nearby suburb of Yerevan, which is $1000-$1,200 per square meter. According to him, the evaluation did not take into account a vast repair and a subsequent modernization and installment of modern equipment. The cultural importance of the facility was ignored, he said.
He said BAMO fulfilled its obligations to a much greater extent, since just the replacement of aluminum windows cost it about $11 million and another $46 million were invested into its modernization.
He argued that all the procedures to seize the facility were carried out with violations of the law, including the possibility of extending the contract for operation of the facility which is provided for in the agreement.
He said also that the owner is ready to pay all the debts given the postponement of the auction and is ready to continue operation of the facility.
According to Grigoryan, the company will attempt to defend its rights in the courts and will take the case to the European Court of Human Rights if no justice is found in Armenia.