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Is There Any Way to Stop a Billionaire-Backed Megaproject?

If you were looking to cast the villain in an urban development battle, you’d be hard-pressed to find a better candidate than Bidzina Ivanishvili.

Worth about $5 billion, or a third of Georgia’s gross domestic product, he’s the country’s wealthiest person by a long shot. A former prime minister and the founder of the ruling party, he’s also Georgia’s most powerful figure, infamous for pulling government strings from behind the scenes since leaving politics in late 2013. His name appeared several times in the Panama Papers, a cache of leaked tax documents revealing how the world’s richest people exploit tax havens. He’s eccentric enough to dig up and ship a lone 650-ton tulip tree across the Black Sea, and his Tbilisi home is tailor-made for an evil mastermind: a 108,000-square-foot steel and glass palace, poised on a hill overlooking the city and complete with helipad and shark tank.

No surprise, then, that not only is Ivanishvili behind the largest real estate development in Georgia’s history — a controversial project known as Panorama Tbilisi — until recently he owned some of the land slated for development. If all goes as planned, Panorama would bring three new hotels, two cable cars, 1,800 underground parking spaces, luxury residences and a convention center to the Georgian capital. The project has become a lightning rod amid a nationwide boom that has attracted international developers, including one Donald Trump — who until January had planned to back construction of the country’s two tallest towers.

As rapid construction has taken hold in the capital, Tbilisians have watched green space shrink in the city center and the horizon crowd with towers. The number of cars in this city of 1.5 million people has doubled in the past seven years. Meanwhile, Georgia’s per-capita rate of air pollution-related deaths ranked number one among the world’s nations in a 2012 report from from the International Energy Agency.

As construction begins on Panorama, locals fearing more congestion, deadlier pollution and the loss of their beloved Old City have rallied to the cause. Some want to kill the project, but most would be happy to move it to a different location, or shrink it to better fit to its surroundings. “Look at Amsterdam, Paris, you don’t have great skyscrapers in the main heritage areas in those cities,” said Tbilisi urban planner and architect Irakli Zhvania.

The municipal government, meanwhile, finds itself squeezed between modernization and preservation, between an oligarch who controls the purse strings and power and an electorate increasingly concerned about the impact of unfettered development. “The result is that city officials don’t want to upset the public, or Ivanishvili, and are always looking to find a balance,” Erekle Urushadze, program manager for the anti-corruption program at Transparency International Georgia, said in a recent interview in a Tbilisi cafe.

That balance is rarely found. As a result, Georgians are learning the extent to which committed citizens can participate in development, if at all, in the face of an all-powerful developer-oligarch. And whether Ivanishvili is indeed a villain.

Silk Road to Silicon Valley

Dusty, 15th-century-old Tbilisi is a head-spinning crossroads of culture and religion. Periods of rule by Arabs, Mongols, Iranians and Russians have left their mark, sandwiching eras of independence. Tbilisi grew to some 100,000 people during the Georgian Golden Age in the 12th-13th century, emerging as a regional power, a node of Silk Road trade and a center of culture. From the early 19th to the early 20th century, it served as the capital of the Caucasus.

Today, dozens of conical-roofed churches dot the Old City skyline beneath the imposing stone walls of Narikala, a rebuilt fourth-century fortress, and the gleaming steel statue of Mother of Georgia. Sleek, modern buildings rise from streets radiating like spokes from Freedom Square, site of 2004’s Rose Revolution. The nearby neighborhood of Sololaki is seeing swift gentrification, with hip locally-sourced restaurants and a busy farmer’s market. Up Shota Rustaveli Avenue, the Soviet-era institute of Marx, Engels and Lenin has been topped with a gleaming blue skyscraper and transformed into the Biltmore Hotel. Along the Kura River, two gherkin-shaped glass towers are rising, set to become the high-end King David Residences. There’s also Axis Towers (a five-star hotel, with residences, retail and office space), a new Sheraton across the river in Avlabari, and talk of a new Radisson next to the Biltmore. After decades of post-Soviet instability, Georgia appears to have found its stride: Economic growth peaked at seven percent in 2011 and 2014, and Tbilisi is booming.

The New York Times’ T Magazine recently dubbed Georgia “the California of the Caucasus,” in apparent reference to its wine, natural beauty and casual hipness. But the makings of a tech industry have also begun to emerge, thanks to new incubators and coworking spaces, the recently opened Tech Park, a sleek government-backed mentoring space, and Silicon Valley Tbilisi, an Israeli-supported IT academy, with satellite offices of 60 foreign firms. Outside town, construction recently began on Georgia’s Technological Institute. A Chinese conglomerate is building a new city along the Tbilisi Sea, in an effort to revive Silk Road-style trade. Nearby, a Slovakian firm is building an “Eco Green City” of its own. It’s expected to cost up to a billion dollars, with 90 percent of its energy from renewable sources.

Georgia’s Dream Project?

Some credit Georgian Dream, the ruling party, for Tbilisi’s growth spurt. The party rose to national power in 2012 behind the backing of Ivanishvili, who served as prime minister for about a year. Weeks before he stepped down, in late 2013, he announced the creation of the $6 billion Georgia Co-Investment Fund (GCF), to which he contributed $1 billion of his own money. With investors like Ras Al Khaimah (one of the seven emirates of the U.A.E.) and the State Oil Fund of the Republic of Azerbaijan, the fund aims to spur foreign investment and economic growth in Georgia and has already backed some $2.1 billion worth of projects in industry, agriculture, energy and tourism.

In March 2014, GCF presented plans for Panorama, showcasing a 10-story, “seven-star” hotel at Freedom Square, luxury apartments and a convention center overlooking the Old City from Sololaki Hills, near Ivanishvili’s mansion. Toss in two other GCF projects — Tabori recreation area, with a golf course, hiking paths, planetarium and aquarium, to be built further above the city on Sololaki Rise and linked to Panorama by cable car; and Galleria mall, already under construction across the street from the Freedom Square hotel site — and the total cost comes to about $580 million. (Consider that at a Georgian bar a beer costs about $1 and you begin to appreciate the relative scale of $580 million.)

New development is popping up around Freedom Square. 

One of the largest-ever private developments in the Caucasus, Panorama would be built amid some of Tbilisi’s oldest buildings, on protected land. City Hall swiftly rejected the plan, advising GCF to build outside the city center. Three months later, Georgian Dream swept to power in Tbilisi, with their mayoral candidate, David Narmania, taking more than 72 percent of the vote. Later that year City Hall changed the zoning category of the Sololaki Hills land, lifting the heritage protection status. The next spring three companies were granted permissions to build there, in a process that activists saw as rushed.

In a conference room at the downtown offices of GCF, a trio of staffers recently sat down to explain how the Panorama plans first made public two years ago were far from final. Public input led to alterations, including the removal of a cable car that would run through the Old City and the reduction of the footprint of construction on Sololaki Hills. A new video rendering of the completed Panorama project showed the Sololaki Hills apartments and convention center hidden behind tall trees and Ivanishvili’s mansion, and difficult to see from the Old City.

In the rendering, the 10-story glass tower for the Marriott Autograph hotel at Freedom Square stood out from its historic, low-rise surroundings. But it also reflected the square back to the viewer, expanding the sense of place, to an extent. GCF argues that Panorama will enrich Tbilisi’s core and become the city’s calling card. Responding to accusations that Panorama would harm the environment and only benefit the elite, Tsotne Ebralidze, GCF’s Managing Director of Hospitality and Real Estate, pointed out that the project expects to plant some 30,000 evergreen trees and employ up to 6,000 people during construction, with 2,000 employed after completion in 2019.

In addition, cable cars running from the top of the Freedom Square hotel to Tabori would be open to the public for the cost of a metro ride — giving Tbilisians a vast green space minutes from the mostly gray and concrete city center. “It’s accessible and affordable,” Ebralidze explained at the meeting. “Anybody can just take the metro to Freedom Square and get on the cable car and you’re at this huge recreation area in 5-7 minutes, able to run and bike and enjoy.”

A Cosmetic Urbanism?

Nata Peradze, a leader of Guerrilla Gardening Tbilisi, is among the many who disagree. Last fall she organized a protest to call for several city officials to resign. A hip, young crowd of about 150 people — lots of full beards, dogs and dreadlocks — gathered on the grounds of City Hall one early afternoon. Next to 5-foot-tall speakers, a DJ started spinning 70s funk. Municipal officials returning from lunch in twos and threes slipped past the crowd and into the building. After a short speech, Peradze oversaw an auction of environmentalist artwork by local activists. The proceeds, more than 700 Georgian lari, would help plant more trees.

“Our form of protest is not based on aggression and violence,” Peradze later explained. “In our post-Soviet reality, because of the nihilistic attitude of society, we choose a form of protest that is creative and peaceful. We manage to achieve way more by adopting these methods.”

That’s not to say Georgian activists are soft. Organizations like Guerilla Gardening and Tiflis Hamkari, which works to preserve the city’s heritage, argue that Panorama will increase congestion and upset the architectural style and character of the Old City. Transparency International Georgia complained that no investors other than Ivanishvili had been named and that some of the land was sold too quickly for others to make bids.

Urushadze, of TI Georgia, points out that dozens of government officials are former employees of Ivanishvili, from mid-level officials up to the minister of the economy and the prime minister. “Whenever Ivanishvili wants a project he finds a way,” he said. “There’s really nobody to stop him. He controls the government entirely — all branches and all levels of government.”

That control has given Panorama a boost. Last year, more than two dozen NGO’s and activist groups joined forces, creating the Ertad (“Together”) Coalition to organize as one against the project. But the coalition essentially disbanded earlier this year after dissolving into petty squabbling over strategy and objectives.

“Maybe we wouldn’t have been able to stop Panorama,” Elene Margvelashvili, director of Iare Pekhit, a pedestrian rights group, said during a recent interview at a cafe overlooking Freedom Square. “But there would have been a precedent of a big crowd coming together over this kind of issue.”

Margvelashvili and others admit that, despite growing activist numbers, still too few people are involved to make much of an impact. One problem is a lingering, top-down Soviet mentality, among officials as well as citizens, particularly people over 40 years old. This will likely change as today’s younger generation matures.

Construction of Panama Hotel is underway. 

Still, the battle over Panorama is far from over. In August, a Tbilisi court accepted a case arguing that the city’s 2014 re-classification of protected areas to enable Panorama construction contradicted a 1985 cabinet ministers decree and a law on cultural heritage, and was thus invalid. The case was suspended at an October hearing, and as of early April, remained suspended. If the judge agrees with the plaintiff’s argument, the decision could ultimately invalidate the building permits and halt construction.

Such a reversal would not be unprecedented. In 2013, Guerrilla Gardeners Tbilisi set up a camp at the site of construction for a major new hotel in Vake Park, preventing bulldozers from doing their work. When the new government arrived the following July, they halted work on the project. A Tbilisi court soon decided that the construction permit had been issued illegally. Today, there’s still a big hole in Vake Park.

From a distance, the city appears to be embracing urbanist ideas. It’s installing vertical gardens, sprucing up several streets and aging buildings and adding pedestrian-only areas as part of the $8.5 million New Tiflis project. When he took office, Narmania promised to plant one million trees in his first year, and his City Council invited activists to monthly meetings to offer ideas.

But critics say these steps are small-bore and predominantly cosmetic. Margvelashvili points out that some of the newly pedestrianized streets were already car-free, and that city officials never listened to activists at those monthly meetings.

Of the half million trees Narmania planted, many reportedly withered and died because they’d been planted too close together. Meanwhile, Georgia’s ministry of environment has questioned the methodology of the IEA report, which found that in 2012 Georgia had the world’s highest mortality rate attributed to air pollution — nearly 300 deaths per 100,000 people. The ministry argues that pollution-related mortality should also take other factors into account, such as indoor air quality and the prevalence of smoking.

Activists point to increased construction, reduced green spaces, poor-quality fuel from Azerbaijan and old, high-emission vehicles due to the absence of mandatory inspections. The World Health Organization says cities should have at least nine square meters of green space per resident. Tbilisi has maybe half that.

Last year the city hired a planning firm to develop a comprehensive urban plan. Meanwhile, it has continued to approve major projects like Panorama while waiting for the plan’s completion later this year. Activists are growing impatient. At a recent meeting between NGO leaders and top city officials, a member of Guerrilla Gardening Tbilisi urged officials to address the city’s environmental problems rather than make populist statements. In response, Mayor Narmania called him a “monkey, son of a donkey” (a harsh Georgian insult), and expelled him from the meeting.

“All these problems work hand in hand and will soon make the city unlivable,” says Peradze. “Already it’s dangerous and can have serious physical and mental health effects. If no imminent changes occur, health problems will skyrocket, forcing people to leave Tbilisi.”

In September, Narmania acknowledged that the number of cars in Tbilisi had doubled since 2010, from 200,000 to 400,000. He called for steps to reduce congestion, including better roads, improved public transport and stronger regulations. He also promised to implement restrictions to regulate the height and size of buildings in central neighborhoods and encourage green roofs.

Zhvania advises locals wondering how quickly the city might implement such plans to contemplate the forest of empty apartment towers surrounding City Hall. They were built years ago, then left to rot after the developer went bankrupt.

Urban planner and architect Irakli Zhvania stands before City Hall-area construction. 

“What do you expect from an administration — both the previous and the current — that has this view from their windows?” asked Zhvania, who studied at the Massachusetts Institute of Technology on a Fulbright scholarship in 2014-2015. “How can these people take care of the entire city when they can’t even make their own block look decent?”

Yet when the powers-that-be want something to happen, it gets done. A few years ago Zhvania served on a council protecting Tbilisi’s culture heritage. It had one non-voting member, plus 12 independent experts — architects, planners, historians. But in 2014 it was folded into a federal agency and filled with officials from the ruling party. “This way, the government could be sure that any project they wanted to go through would go through,” Zhvania explained. “The reason for this was very clear: Panorama was coming.”

Inevitable Change

Legend has it that Tbilisi was founded after a fifth-century king found his hunting falcon drowned in a hot spring and decided to build a city on the site. The name Tbilisi is derived from the Old Georgian for “place of warmth,” a reference to the sulfur springs that still today feed the city’s public baths. These days, Tbilisi is as unruly as those bubbling waters. Sidewalks are crowded with parked cars, so walking space is scarce. With few crosswalks, one often sees pedestrians, even the elderly, standing in the middle of a busy street, turning their heads this way and that and waiting, Frogger-style, for a break in the stream of passing vehicles.

Georgians are conservative folk, and particularly resistant to change. Yet the capital’s varied architecture — Medieval, Middle Eastern and Modernist; Stalinist, Neoclassical and Art Nouveau — suggests change has been one of the city’s few constants. Across the West, a debate has been raging about the insertion of contemporary architecture into historic urban areas. Some tilt toward conservation, imitation and preservation, while others embrace progress and the inevitability of urban change. The goal is striking a balance between private profit and public good, finding a way to preserve the character of an historic area while facilitating enough progress to sustain it.

Whatever its shortcomings, Panorama links Georgia’s two great assets: the capital’s charming historic core and the country’s lovely mountain scenery. Richard Tibbott, chairman of international advisory services at the real estate consultancy Cushman & Wakefield, has advised London’s tourism department and worked on the London Eye and other Thames attractions. He argues that Panorama does not contradict or compete with Tbilisi’s historic environment, but complements it. “This is a very bold mixed-use investment that appears to provide a very strong boost to the Tbilisi visitor economy,” he wrote in a review of the project for GCF.

Thanks to Ivanishvili, Tbilisi tends toward the example set by Dubai or Istanbul — cities dominated by the vision of an all-powerful leader. Yet the country’s richest man has done much to improve Georgia. In the last couple decades he has resurrected Tbilisi’s 400-year-old Botanical Gardens, which had fallen into disrepair, and built the Sameba Cathedral, the country’s largest church and an immediate tourist attraction, along with national parks and hospitals. He has helped renovate Tbilisi arts outlets, and in his home district built roads, an army base, a cinema, library, water-treatment plant and more. More broadly, GCF has invested in several major projects likely to benefit all Georgians, including $1 billion worth of hydropower projects.

Few Tbilisians would call themselves NIMBY’s, and many locals appreciate what Ivanishvili has done. “We don’t mind development, we just want to keep our city as attractive as it’s always been,” Zhvania said during an interview at a stylish bar just off Rustaveli Avenue. “Building Panorama right here destroys the character of the Old City, disturbs the setting, takes away any chance of gaining UNESCO Heritage status. … Let’s keep this area the way it is, keep it charming, and do the big projects outside the center, where we have more space.”

Our features are made possible with generous support from The Ford Foundation.