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Tbilisi City Hall Will Spend Over 1 billion USD on Enforcement of Land Use General Plan

Issues with the Tbilisi land use general plan have caused serious problems recently. Political, public and academic circles have been actively discussing this issue. There are many groups involved, and all of them agree that Tbilisi needs a development plan.

Last week, Tbilisi City Hall remarks were discussed in a public format. The document prepared by the City Institute organization triggered serious confrontations. Opposition representatives aggravated the situation, while important issues like encroachment on property rights and financial-economic aspects of the document were left without due answers.  Regarding this issue, the Association of Young Financiers and Businessmen (AYFB) has published its findings.

Neither City Hall nor the City Institute organization have answered how to change land zoning categories, what economic effects will result or what liabilities will arise for the municipal budget, the document says.

According to the AYFB report, if the current version of the land use general plan is adopted, the private sector will bear serious losses. Many citizens have submitted appeals to AYFB as part of the research process. These appeals describe many encroachments on private property. The private property of our citizens was shifted to other zones without preliminary consultations or information support in about 25-30 thousand similar cases. This signifies that compensation from the Tbilisi budget should go to all these private property owners. According to the most optimistic calculations, this amount is $300 million.

According to AYFB research, the situation is worse in commercial zones with the status of recreational zones. The dismantling of Eliava Fair is the most obvious case. Naturally, this process raises many legal and financial questions.

According to Geostat information, a total of 2,199 legal entities are registered on Khosharauli and Agladze Streets, the left bank of the river Mtkvari and Vakhushti Bridges. Each one employs at least four people. During the dialogue, businesses talked about bank liabilities they took to ensure operation, and these amounts ranged from 1,000 GEL to 4,000 GEL a month. The total amount, on average, reaches 25000 USD. If these business operators cease operation for several weeks, they may face bankruptcy threats, and commercial banks may expropriate the real estate that small entrepreneurs have mortgaged in exchange for bank loans.

According to the research, this area is shared by 144 bodies and the total value of land plots exceeds 230 million USD, plus the value of the buildings on this land, along with expenses for dismantling and relocating these buildings to new locations.

The document also notes that the soil of this area is unfit for a recreational zone, and will therefore be replaced and irrigation systems installed. The issue of the Wagon Repair Plant area also remains unresolved. According to certain plans, part of Eliava Fair will be relocated there.

One more infrastructural project with an unclear financial component is related to the system of tunnels. According to the land use general plan, the motorway along the river bank will be moved underground so the park may extend to the river bank. As a result, a joint pedestrian network will be shaped aboveground along the river bank, with bicycle and walking bridges and enlarged footpaths.

AYFB has conducted consultations with road infrastructure specialists to determine the projected cost of developing and implementing this project. It was impossible to determine an exact amount at this stage, because there is no final project. According to approximate calculations, the necessary budget will be several million dollars.

According to AYFB, more than $1 billion is required to resolve the issue with Eliava Fair. The municipal budget is not sufficient to resolve all these issues and alternative resources will be required.

AYFB has submitted recommendations to City Hall, including changes to zoning laws, the submission of related arguments and substation. AYFB also asserts that Eliava Fair should be stripped of its recreational zone status, because no financial component has been decided regarding the relocation of this territory, and bankruptcy risks may arise for small and medium entrepreneurs.