Changing the Cyprus system: Restoring historic buildings is endless

You may read the opinions and thoughts of our founder and managing director, Mr Miltos Kouzis, as they were shared on Cyprus Mail, alongside with the entrepreneur Mr Stylianos Lambrou – founder of Heart Group, regarding the procedures and issuance of permits of listed buildings.

We live in the era of digitalization as the world moves fast and technology makes our lives more simple but yet in Cyprus some people choose to do things their own very slow way. Things need to change as fast as possible! If we really want to attract business people from all over the world we must adapt and move with the same “rhythms” like the rest of the business world. We need to act fast and be transparent with quick procedures and actions. Tons of paper applications are laid on the desks of governmental departments waiting for someone to take action.

There is an old saying: “If you lose time, you lose money”. If the officials share our vision for restored historic buildings, new employment positions, fresh money in the Cyprus fragile economy and beautiful city centers then there is only one way. Change things and take action!

“The Cyprus system is broken,” insists Stylianos Lambrou, a Limassol-based serial entrepreneur in an interview with the Cyprus Mail.

“The delays are intolerable,” adds real estate agent Miltos Kouzis, of MK Options Estates. “We bring in tens of millions in investment to renovate listed buildings in the centre of Limassol. We apply for a permit, and then are asked to wait as long as three years before it is even reviewed,” he told us on Monday.

Stylianos Lambrou

Investors don’t want to wait, so they take their money elsewhere. “These projects could revive whole neighbourhoods in the centre of the city, attracting shops and restaurants, rebuilding the local economy. And all is held up because the listed buildings department takes so long even to review our applications,” Lambrou complained – he himself and his partners had committed a total of €10 million to 5 projects in the old city of Limassol

There are about 50 listed buildings in the centre of Limassol that are decaying in ruin, Lambrou said. “These are beautiful buildings, some from the late 19th century, some from the neoclassical period, others from the Art Deco period of the 1920s and 1930s. Losing them would mean losing a critical part of Cyprus’s heritage.”

Lambrou, whose Heart Group is known for the creation of HeartCyprus, the Heart Hotels, the Reflect Festival, a future-casting festival which is the largest in the region, and other both for-profit and non-profit enterprises, has worked to bring in serious, sophisticated investors to this project. “This is not a quick-buck scheme,” he pointed out. “But we have found investors, both from home and abroad, who are willing to commit their funds for the long-term.”

Unfortunately, the long-term, measured in terms of Cyprus bureaucracy, is just too long, Lambrou notes.

“What’s more,  when the review finally happens, the approach is so narrow-minded that significant improvements can’t be made.”

Lambrou wanted to renovate a listed warehouse in the centre of Limassol, one dating back to the turn of the century, and to make it into a small boutique hotel. He had planned to put in glass all around the top floors, but the listed buildings department wouldn’t allow construction on the top of the warehouse even though he had the “building density,” meaning the right to build on it.  “This is a common practice in all European cities – connecting the old with the new, and it was necessary to make the investment work,” he commented.

“Everything has to be just like it was before,” Lambrou says, “irrespective of architectural value.”

Meanwhile the government is actually losing money, as there fees on all these projects, Kouzis continues.

“Each renovation project brings in money directly to the government. But the projects don’t happen because of the impossible delays. You cannot ask investors to tie up funds for such a long time – it costs them money, and that’s not why people invest.”

Kouzis suggests that the government bring in more staff to the listed buildings department – the fees would make it worthwhile.

“Or,” he adds “offer incentives to investors that will make it worthwhile for them to wait for approval. There could be interest payments on investor funds once they are committed to projects, for example, to make the long wait worthwhile.”

The government does offer considerable incentives for investors in renovating listed buildings. “These amount in practice to about one third of the entire investment. “Building density” can even be transferred to other buildings, so that the investor can count on a full return on investment.

Yet, even with all these advantages, waiting two to three years to get a project started puts off even serious investors, Lambrou said.

“This is a broken system in Cyprus; we could move forward rapidly, but for every two steps forward taken by the private sector, the bureaucracy takes us one step back.”