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Cablegate: Small Business Owners Cry Foul Over City's Eviction Plans

VZCZCXRO8783
RR RUEHDBU RUEHSK RUEHVK RUEHYG
DE RUEHLN #0139 3491502
ZNR UUUUU ZZH
R 151502Z DEC 09 ZDS
FM AMCONSUL ST PETERSBURG
TO RUEHC/SECSTATE WASHDC 2873
INFO RUEHMO/AMEMBASSY MOSCOW 1777
RUCNCIS/CIS COLLECTIVE
RUEHLN/AMCONSUL ST PETERSBURG 3242

UNCLAS ST PETERSBURG 000139

CORRECTED COPY - ADDING CAPTIONS

SENSITIVE

SIPDIS

E.O. 12958: N/A
TAGS: PGOV PHUM
SUBJECT: SMALL BUSINESS OWNERS CRY FOUL OVER CITY'S EVICTION PLANS

1. (SBU) Summary: A running property dispute between local
small-business owners and the St. Petersburg city administration
has escalated, as the administration recently announced it will
evict the entrepreneurs in January 2010 from a market they
leased from the city in 2001. The lease expired in 2004, so the
city seems within its rights to clear the property. Local
prosecutors have brought criminal cases against some of the
leaders of the entrepreneurs' association representing the
owners; one of those leaders alleges he was beaten by city
police as an intimidation tactic. That leader accuses city
officials and a member of the Governor's family of seeking to
drive the owners out of the market in order to gain control of
the lucrative business site. End summary.

2. (SBU) The Khasan Market in St Petersburg opened in 2001,
under a three-year lease agreement between the city and the
managing company "Omi," which operates the market. The market
houses scores of small business owners and their employees, and
Omi claims to have invested $17 million in infrastructure
improvements to the facility. The city and Omi have been unable
to agree on an extension of the lease since it expired in 2004;
the market has been operating without a valid lease since then.

3. (SBU) The St. Petersburg city government recently announced
it would evict the entrepreneurs operating out of the Khasan
Market on January 15, 2010. The building reportedly will be
demolished, and a new building will be built by 2011 at the
city's expense. No details have been released yet regarding who
will own or lease the new building, or what it will be used for.


4. (SBU) In a November 20 meeting with Conoffs, Grigoriy
Solominskiy (a leader of the St. Petersburg Association of Small
and Medium Size Businesses, as well as Omi's principal lawyer)
said the market's real problems began after the owners of Omi
rebuffed an "offer" from Sergey Matviyenko, son of St.
Petersburg Governor Valentina Matviyenko, to buy shares in the
enterprise. Solominskiy added that after Omi rejected
Matviyenko's offer, the market began to face "pressure" from the
city government.

5. (SBU) Solominskiy said direct pressure on the market included
random police raids on shop stalls, and arbitrary criminal
charges brought against shop owners. Solominskiy stated that he
and Sergey Abrazheev, General Director of Omi, also were
recently charged with criminal offenses. Solominskiy was
charged with insulting police officers during an October 9 raid
on the market. He rejects the charge, and claims he has a
videotape proving he only asked plainclothes police to identify
themselves. The police refused to do so, Solominskiy claims,
beating him instead and then taking him to a police station
where he was formally charged.

6. (SBU) Solominskiy believes the criminal case against him is
supported by city officials, since he is convinced his political
and pro-entrepreneur activities have made him enemies within the
city administration. (Note: Solominskiy was one of the
founders of the Petersburg Civil Committee, a now defunct
organization which previously had coordinated opposition groups'
activities in the city.) He further believes that once certain
city officials learned of the police charges against him, a
decision was made to prosecute his case to the fullest extent of
the law in order to silence, as he put it, "a politically
inconvenient figure for the city administration."

7. (SBU) Comment. There may be less to this "David vs. Goliath"
story than meets the eye. As Solominskiy freely admitted, the
current commercial occupants of the business center have been
using it without a valid lease for the past five years. So it
appears the city would be within its rights to evict the tenants
in the absence of a new lease agreement. Solominskiy's
encounter with the police was captured on videotape and posted
on his blog site, which we have reviewed. The footage clearly
shows him being pushed to the ground - but not beaten - by one
unidentified man in plainclothes before being forced into a car,
after which he claims he was taken to a police station where he
was then charged with insulting the police. Although there is
no direct evidence of Sergey Matvienko's involvement in the
market controversy, his business fortunes have certainly
improved since his mother became governor of St. Petersburg.

GWALTNEY

© Scoop Media

 
 
 
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