Spartak Sports Complex Sold for 5 Billion Drams; Buildings to Be Constructed on Site

The oldest sports complex in Yerevan has a new owner. The Spartak Stadium and adjacent buildings located in the city center have been sold for 5 billion drams. The 2-hectare sports complex was sold to Eco Petrol LLC. Hetq has clarified the details of the transaction.

Spartak Stadium was built during the Soviet era and belonged to the organization of the same name. The Spartak Sports Organization was established in 1935 as a volunteer sports association. By 1987, the organization included four sports associations from the Soviet Union. In the same year, it was renamed as the Armenia Sports Union and gained the status of a public organization after Armenia's independence. This status has been maintained to this day.

The entire property of the Spartak Sports Union has been transferred to the organization, including stadiums, gyms, and sports schools located in Armenia. Some of these were later transferred to communities without profit motives, such as the municipal stadiums in Abovyan and Armavir. The organization has also faced disposals; for example, the cycling school complex in Yerevan was sold, which later became the site of the Hilton hotel in 2015.

The long-time president of the Armenia Sports Union, Razmik Stepanyan, was replaced in 2019 by Socrates Petrosyan, who headed one of the substructures of the organization. Just two years after assuming presidency, he signed the contract for the sale of the Spartak sports complex. Before that, the 21-member leadership body of the organization was changed, and authorization was granted to mortgage the organization’s property. A familiar of Socrates Petrosyan, Arsen Hovhannisyan, a citizen of the Russian Federation and owner of Standard Petrol LLC, became part of the leadership, and under favorable conditions, he acquired the complex.

A month after the extraordinary general assembly of the Armenia Sports Union on July 14, 2021, businessman Arsen Hovhannisyan, who was confirmed in the leadership of the organization, took out a loan of 1 million dollars from Evocabank. As collateral, the Spartak sports complex was mortgaged. The Armenia Sports Union had privatised the complex on the condition that in case of sale, it would have to pay the cadastral value at the time of privatisation, which was 500 million drams, to the Yerevan community. After mortgaging the complex, the community budget was paid 500 million drams.

On September 4, 2023, the contract for the sale of the stadium and gyms was signed. The buyer is Eco Petrol LLC, founded by Sergey Hovhannisyan, the son of Arsen Hovhannisyan. The complex was sold for 5 billion 20 million drams, but the organization must receive the payment by 2028, without a specific timeline. After acquiring the complex, Eco Petrol LLC also mortgaged it in Evocabank, this time for a loan of 4 million dollars.

It is noteworthy that the complex was sold for less than its cadastral value. The cadastral value of the property at 6 Agatangeghos Street is 6 billion drams, whereas the complex was sold for 5 billion drams. The Spartak sports complex, located at 6 Agatangeghos Street in Yerevan, occupies a 2-hectare parcel. Besides the stadium, the real estate includes a gym with an area of 10,844 square meters, an administrative building of 836 square meters, another gym, and facilities for weightlifting and boxing with an area of 539 square meters, a fencing hall of 275 square meters, another administrative building of 1,701 square meters, an athletics hall of 1,509 square meters, and other buildings.

The list of shareholders in Eco Petrol LLC has expanded since its inception, now including four shareholders: Sergey Hovhannisyan, son of Arsen Harutyunyan, Levon Baboyan, Aram Gevorgyan, and Albert Yeritsyan. The last shareholder is the grandson of Albert Yeritsyan, who lost all his assets years ago, being the former mayor of Arabkir, and the son of businessman Robert Yeritsyan.

Socrates Petrosyan, who has been leading the Armenia Sports Union since 2019, stated during our meeting that various attempts were made over time to take the stadium away from the organization, budget funding was reduced, property tax increased, and hints were made from the Ministry of Education, Science, Culture, and Sport saying, "You own property, sell it and keep the sports schools with that money." The organization's president considers the sale of the sports complex to be beneficial.

When asked how they found Arsen Hovhannisyan, whether he found them or they found him, Socrates Petrosyan responded, "We are very old acquaintances. We met 20 years ago in Meghri. We brought Arsen Hovhannisyan when we agreed that he would pay the land fees." He mentioned that they discussed seeking solutions with friends and decided to sell the property, providing that the buyer allocates 3,000 square meters of gym space to the organization after developing the area. In other words, the transaction price of 5 billion drams will not be given to the organization; instead, they will receive the developed space equivalent to that value.

The president of the organization does not consider selling 2 hectares of land in the center of Yerevan for 5 billion drams to be cheap. In response to the assertion that they are losing the running track and only receiving 3,000 square meters, Socrates Petrosyan counters that the running track did not comply with any standards.

The property of the organization used to be public property and was transferred to the Armenia NGO for sports purposes. When asked whether he considers it right and fair to manage public property in this way, and whether the state may have questions, Socrates Petrosyan replied, "The state had questions; it has asked. We have also paid the state’s fees. We have paid the land fees, and we have paid profit tax. I continue to support sports. It’s not that I’m not supporting sports. Maybe public schools collect fees from kids; let someone enter our schools and say that kids have given a dram in addition to the 1,000 dram membership fee." When asked whether this is a profitable deal for sports, Socrates Petrosyan replied, "Yes, both for sports and for sports personnel. For our organization's employees."

He noted that the stadiums of the complex would not be closed and the area would be developed in phases, with them moving to the developed part before the existing halls are dismantled. According to the organization’s president, Eco Petrol LLC also provides financial support to the organization in addition to purchasing the property.

It should be noted that there is no provision in the payment plan contract between the Armenia Sports NGO and Eco Petrol LLC stating that the buyer is obliged to transfer 3,000 square meters of property at the cadastral value instead of the 5 billion drams, as claimed by Socrates Petrosyan.

According to data received from the Ministry of Education, Science, Culture, and Sport, financial allocations have been made to the Armenia Sports NGO annually through the extracurricular education program. Between 2010 and 2023, 4 billion 254 million drams were allocated from the state budget to the sports organization.

As per the information obtained from the Yerevan Municipality, 221 million drams were allocated to the Armenia Sports NGO from the city budget for the maintenance and operation of the cycling facility from 2017 to 2021.

The new owner of the sports complex is set to develop the area. The director of Eco Petrol LLC, Zarine Stepanyan, responded to our written inquiry, stating that a residential eco neighborhood is planned to be constructed in place of the stadium, which will include an eco-complex sports complex. "The area of the stadium will also be developed according to new specifications, which will be coordinated with the council of the Armenia Sports NGO. Our company and the Armenia Sports NGO have an agreement that we will build modern sports complexes for different sports in that area. All the current gymnasiums will exist but at a much higher level and in accordance with today’s standards," said the company director. Responding to a question about investments, the director of Eco Petrol LLC stated that the scale of investments is in the discussion phase, and the project will be financed through loans and personal funds.