Broken Dreams Plaza – The Mirax Story


Originally published on http://www.grahamwphillips.com, 15th January 2014 (see below) – 

The current Ukraine crisis seems sure to see the breaking up of Ukraine, if that hasn’t already happened, before it turns 23 in August. The country of Ukraine as we know it, or knew it, hastily put together of composite parts, as WWII broke out, then independent as the Soviet Union broke up in 1991. This now hashtaggable #Ukrainecrisis seems that, as it is, the country’s prospects of emerging from young adulthood are uncertain. Yet, even before this, Ukraine had already endured troubles in its life.

There were the 90s? Ukraine’s difficult, or even broken, childhood, with an economy taking a yearly double-digit beating. Then the teens, a few bumps but more, halcyon days where everything seemed possible. Where it seemed like you could do anything. As Ukraine’s economy boomed into double-digit growth in the early 2000s, the sky was the opportunity.

In early teens, an idea was formed to build a soaring skyscraper, around that magic 200-metre mark, in the city’s central Podil area. It would show the world that Ukraine had passed post-Soviet. Ukraine was an adult, making its own way in the world, casting off the shackles, striking out on its own. It was to be finished just as Ukraine got ready to exit its teens, in 2010. Of course, there were other things in the works, other bold statements being made, but Mirax-Plaza was it, where it was at.

Mirax Plaza4Naturally, no one quite makes it without a little outside support, and so it was, Russian firm Mirax Group stepped in with the capital, and some real confidence. The glass-plated, cutting edge skyscraper was to feature 381 apartments, panoramic view restaurant, even a helicopter pad. The group assuredly announced they would return their investment within five years, with market specialists nodding on approval saying that land in Kiev, already expensive (and it was a Ukraine in which the hryvnia was 5 to the dollar, rather than today’s below 8), was rising in price every day making the smart money far in the sky.

As analysts admired the profits coming Mirax’s way, Ukrainians looked on in approval. In a west well-used to new skyscraper naysayers, you’dve been stretched to find a Ukrainian who didn’t swell with pride at the proclaimed class-A, western standard, ‘city in the sky‘ coming their way. True, a few weren’t that delighted it was a Russian firm behind things, but were generally assuaged by Russian company expertise in the sphere.
Mirax Plaza1

Mirax Group, the company giving the plaza their name, were described as one of the leading construction companies in Russia, claiming to have put up over 2 million square metres (Mirax alone was to be 300,000 plus square metres) of business and premium class property, and at that moment working on Moscow’s Federation Tower, billed as the tallest building in Europe, with a planned height of 354 metres.

This was the company’s first project in Ukraine, and as the country’s economy crested in 2004-5, planning permission was rushed through and an enthusiastic statement was released on the company’s website –

The building is commissioned by the Mirax group, one of the most important real estate investors in Russia. Mirax is acting worldwide and is also responsible for the highest building in Europe, the Federation Tower in Moscow, which is currently under construction. The investor had been specifically looking for a Western (German) architect, to take full advantage of the reputation of German engineering in all of the CIS, but also to establish a different design language.

The original building was to be 44 floors, 170 metres, and some did think the budget of $267,000,000 was a little ambitious for that. But this was a Ukraine where everything was possible, everything was turning to gold. The economy had grown over 12% in 2004, and though it dipped in 2005, the Orange Revolution had landed and many thought 12% was just the tip of the bonanza to come. Another tower was duly added to the plan, also to be 170 metres, with a 5-storey shopping mall linking the two. Given the tallest building in Kiev at that time was the 106-metre then Transport and Communications Ministry building, they would comfortably be number 1 and 2.

Architects were world-renowned German firm Eller and Eller. So keen, seemingly, were Mirax to get the project started, that with a hugely optimistic timeframe of 2007-2009 (a more realistic target given was 2010), construction actually started on December 22, 2006. All in 2007 appeared to be going well, as construction got underway on the three-hectare plot. With the particular geology of the area, foundation preparation did seem to be taking some time, with little concrete to show even by the middle of the year. But, just as a few whispers started, the company announced quite staggering plans to add two floors to the original tower, taking it to 46 floors and 192 metres, with a redesign and stunning arcing roof leading to a shard pointing to the heavens.

Whether this was entirely a bold bluff to buy time is unknown, but the public at large seemed to buy it, even if construction rather crawled. The word on the inside was the project was stalling, as Mirax struggled for funds. Talk had at one time been of 1000 construction workers on site, yet it never reached more than a couple of hundred as the 2007 credit crisis started to hit in mid-2007.

Mirax Plaza3

This combined with growing uncertainty about Ukraine’s prospects as Yushchenko and Tymoshenko‘s government had dissolved into internecine warfare and economic mismanagement seeing soaring inflation and a plunging currency. Economic growth in 2007 had held at near 8%, yet the forecast for the next year was bad. It was bad, scraping over 2%. Pictures of the foundation work at least done were released in March 2008 (right), but there was no talk by then of a 2009 or ’10 completion.

Work limped along in 2008, amid rumours that the company’s Ukrainian subsidiary, Mirax-Invest, which had been founded only in 2005, was running on empty. 11 floors had gone up by late autumn, but as the credit crisis seized Ukraine and hit Russia, word from there was not good. In November 2008, parent company Mirax ceased construction on the Federation Tower. Back in Kiev, just as glass cladding had begun on the lower floors, work, which had been labouring, stopped entirely. An announcement was made that Mirax-Plaza would be postponed for a year due to the credit crisis, as the workers downed tools, the cranes fell idle. Rents in Kiev had fallen by up to 50% since the start of construction, while demand for what Mirax Plaza was to offer had collapsed.

Mirax PlazaIn May 2009, Mirax Group announced they had sold the project to Russia’s AEON Corporation, with plans declared that construction would commence once more in mid-2010. But the sale fell through, as 2010 saw Mirax having seemingly found investors but locked in conflict with them over the future of the site. Then, Mirax Group folded in 2011, owing an estimated $500 million. Around $150 million had been invested in Mirax-Plaza.

The former Mirax Group has now reformed as Potok, but a statement on its wikipedia page presumably from someone connected, makes it clear Mirax-Plaza is not in its plans –
It is worth noting that the foreign projects in the UK, Switzerland, the US, Montenegro, Cambodia, Ukraine were not launched by the Potok group of companies and are personal projects of shareholders.

Mirax PlazaSome blame the Russians for this, of course. Their position has been that the mismanaged economy in Ukraine gave them no choice. 2014 is a different Ukraine. More mature, a little more level-headed in these matters. Big projects, such as the recent Ocean Plaza in Kiev, get finished. Ukraine is an adult now. But if all the other unfinished constructions of the time are acne scars, Mirax Plaza is the huge, botched tattoo Ukraine got as a teenager, which needs to be removed before the country can be taken seriously as an adult.

It’s not clear who owns the land. There was talk in late 2010 of the Kiev administration mounting a repossession, the lease on the land having expired, and demolition, if nothing were to be done. But, Euro 2012 came and went, now Euromaidan, you can be sure that the doomed Mirax is very low down the list.
This is the building these days, and for anyone with any interest in, or feeling for Ukraine, it’s around 25-metres of heartbreak.
Mirax Plaza1 Mirax Plaza5 Mirax Plaza7

Minor editing from original – Скриншот 31.01.2015 22551.bmp

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