The Ellinikon: The great fiasco from above

• What K. Mitsotakis and Adonis Georgiades said in 2019

• What Lamda Development Promised for “flagship investment”

• Banks’ commitments to the project

• Two scientists analyze: We are still in our infancy

Data Journalists’ Survey

Video – Editing: Giannis Traganidas

How many bulldozers can fit in the space between the first and last week of the Mitsotakis government? Data Journalists attempted to measure them by flying a drone over the former airport of “The Ellinikon” given the expectations that had been cultivated in 2019, with the Prime Minister assuring prior to the elections that he was ready to start as soon as he entered the Maximos Mansion.

 The sad picture of the works from above 

The result of the survey today is disappointing not only for those who were convinced by the assurances at the time but also for those who watch the selective briefing, mainly of a promotional nature, that the manager of the “flagship investment”, Lamda Development, occasionally allows:

• Much of the area remains the same and unchanged as remembered by those who had managed to take off and land many times from “The Ellinikon”. Hundreds of meters of asphalt runways are maintained, to the extent that even today a small plane could land. The deep excavations required for their removal have progressed little and only on the northern side, towards Alimos, where the urgent works for the construction of the Olympic facilities in 2004 had preceded. Back then the State was paying…

• On the south side, towards Glyfada, the dismantling of the runways and the thick layer of cement that formed hundreds of acres of aircraft parking areas, are progressing slowly. The flight offered us the characteristic image of a “lonely” bulldozer that, equipped with a special “hammer” attachment, was struggling to break the hard concrete crust. Even more characteristic is the comparison of the images of our drone with those included in videos from the Drone Views/Zisimos Zizos channel on Youtube, filmed eight months ago in August 2022. At that time, the machinery had broken the cement on the south side of the area, but even after all these years, the only thing that has changed is that the debris was simply removed, which is now being led to a space in front of the former East Airport and turned into inert materials on the spot. This saves the investor significant costs that would be required to transport the materials. As a result, however, much of tomorrow’s “larger park” has been converted into a storage area for hills of soil and gravel of varying composition.

The hollow promises of Mitsotakis – Georgiades

• Experts who spoke to Data Journalists described the whole picture of the projects as “the beginning of the initial phase”. The same image in the works that have been announced on the other side of the coastal front, in front of the Marina of Agios Kosmas. Flying over the land on which the “tallest skyscraper” will be built does not at all resemble a project that was put first. Marina Tower (now renamed Riviera Tower) was the project advertised in Lamda Development’s first online presentation, in July 2021, amid a pandemic. The strict health protection measures were a good excuse for a presentation with a multitude of graphic depictions but without journalistic questions, with the same “information” tactics followed in the following festive presentations.

• The skyscraper project, which appeared in promotional videos as early as 2016, should supposedly be finished by 2026. In recent statements (2/5/2023), the CEO of Lamda, Odysseas Athanasiou, spoke of “starting deep foundation works” with “pile construction”. The piles are needed to stabilize the soil when it comes to such a tall building by the sea. Athanasiou claimed, in fact, that “about 45% of the total of 300 piles has been completed”. The image from above, however, does not refer to anything similar, as reported by scientists.

• The only project in which apparent mobility is actually recorded is that of undergrounding the coastal road to a length of 1.5 km. This is a 50m-euro project, which is also in its initial phase, although Athanasiou is already talking about completing “about 50% of the excavations and 25% of the concrete”. Its construction was facilitated by the demolition of dozens of buildings at the former Western Airport that began when “The Ellinikon” was still owned by the State before Lamda paid the first installment of the price. In any case, when the project is completed it will account for 0.625% of the total investment which Lamda is raising to EUR 8 billion.

• It is estimated, however, that there is another reason that the undergrounding of the coast road is the only project that somehow seems to be progressing: Next to it exactly, is the site of the former Agios Kosmas Sports Center where plots for villas are now being sold. The first element that raises the value of these plots is the Saronic Sea and the luxury of the plans. The value would have been even greater if the 2,000-acre Metropolitan Park had already been formed behind them. However, because this Park exists only in the announcements and everything indicates that it will be many years later, the only easy way to improve the image was to “disappear” the noisy coast road through undergrounding. This will raise prices for the remaining plots for sale and will continue to increase revenues for the investor. Athanassiou recently informed that contracts have already been signed for 19 plots and advance payments have been made for 8 plots without mentioning the amount of revenue collected so far – and of course, nor the expenses that have been spent on the “flagship investment”.

Full video from Data Journalists’ drone

• The most disappointing picture corresponds to the core of the area, where the Metropolitan Park will be formed. The flight recorded images of a “desert steppe” with the only exception of the southern area where based on the former Olympic facilities, a Sports Center will be formed. One of the few earthworks identified by the lens concerns the formation of a branch of the Trachones stream that descends parallel to Alimos but will also pass through the facilities. The thousands of trees that sprang up in the blink of an eye in Lamda’s advertising spots are nowhere to be seen, without even being replenished by the manufacturer’s cranes.
• Lamda, however, recently recorded a “failure” in the sector that excels, namely the revenue from the exploitation of real estate that has not yet been built. The reason the “largest commercial center” of 185,000 square meters has advertised that it will build on the eastern side of the land, near Vouliagmenis Avenue. A huge part of the buildings designed next to the Vouliagmenis Mall had been announced (December 2021) that Piraeus Bank will acquire to house its headquarters. A few weeks ago, however, a series of reports appeared in the press that were not denied and insisted that Piraeus changed its plans and perhaps the same applies to Eurobank.
• In conclusion, none of the images in “The Ellinikon” refers to the “feverish rhythms” of which the CEO of Lamda Development spoke. For a country that experienced – and paid a high price for – the Olympic project, the pace of implementation could easily be consistent with a public project of one that well knows how to slander supporters of the current government. The difference is that “The Ellinikon” has already acquired ownership of 30% of the fillet and rights of 100 years in the largest part.

 The suspended step of Elliniko – The truth of numbers  

The capitalization of Lamda Development, whose stock has fallen from a high of 6.52 euros on February 28 to 5.7 euros, is marginally above 1 billion euros.

But this is not the only one, although indicative of how the market anticipates the project – problem of Lamda Development that has undertaken to “run” “The Ellinikon”, the dates and timelines do not work out. The project is not progressing, at least at the pace expected and expectations fostered by its management, senior market executives say.

In 2016 they said the park would be ready in 2021

Banking executives who spoke to us do not hide their concern about the fact that Lamda’s board of directors decided to partially change the use of capital raised from the latest increase in its share capital of 650 million euros to cover part of the financing gap that the investment for the two shopping centers in “The Ellinikon” faces.

The company claimed in its official announcement that the decision of its board of directors on May 2 to change the use of funds, is made aware of the excellent progress of the Greek project to date, which makes the use of funds for guarantees of good performance by the lending banks of the project as unnecessary or significantly limited.

The shopping mall and the nonexistent gardens

The reality is that €100 million out of the €166.65 million earmarked for the payment of the second tranche of the price will go towards the development of two commercial centers, for the coverage of bond issuance of subsidiaries and for the coverage of the necessary capital of the company until the end of the year 2025.

The company says it will cover the gap of the second installment from the funds it received from the Common Bond Loan in July 2020. In a small detail: the funds that remained unallocated on 31.12.2022 amounting to 22 million euros were deposited in sight bank accounts in accordance with the provisions of the Prospectus.

In the financial report for the year 2022, which was posted on the Stock Exchange a few days ago (athexgroup.gr), the company states that an amount of 80 million euros was initially allocated to the company “The Ellinikon” S.A. through an intra-group loan of up to two years from its issuance (i.e. the second half of 2023), and after its repayment will remain available for the partial coverage of a bank guarantee letter of 150 million euros, which expires after the completion of the construction of the first phase of the property development project in “The Ellinikon” estimated at 5 years, to ensure the fulfillment of the Company’s obligations for any overruns of the cost of the above project, as well as for the coverage of any reduced revenues from sales and/or exploitation of assets intended for the financing of the project budget.

After the expiration of the above bank letter of guarantee, the company will allocate the amount of €100 million (which will eventually have been allocated in total) for the financing needs of the next installments of the price for the transfer of the sold shares of The Ellinikon S.A., and for investments in the next phases of the project, i.e. after the five years from the Transfer Date and/or for covering the working capital of the company at the specific time period.

The 80 million euros were used to cover the project’s precursor projects (eg expenses for architectural projects, consultancy studies, demolitions, and infrastructure projects), the construction of The Ellinikon Experience Park, and The Ellinikon Experience Centre.

They built skyscrapers with words

At the same time, the company “advertises” that the revenue from the residential developments of The Ellinikon, which so far is only 214 million euros and of this money 148 million euros concern advance payments for villa plots and apartments, will exceed half a billion euros by the end of this year.

While the big thorn remains the fact that Piraeus and Eurobank before the ink of the MoU with Lamda dries well, seem to abandon the idea of relocating to Elliniko. Some talk about the biggest fiasco as the two banks finance the ambitious The Ellinikon project with loans of 1 billion euros.

The market says that the second thoughts are linked to the delay in completing the investment that had been delimited until 2025 for at least 2 additional years.

It is noted that the agreement, which was signed in July 2021 and was widely advertised as the first regarding office space, provides for the acquisition by Piraeus Bank of offices of a total area of 40,000 sq.m., for the future relocation of the Bank’s central administration offices to the Business Center of Vouliagmenis Avenue, to be developed by the Group, within the Ellinikon area.

The banks leave before they arrive…

The total value of this transaction is EUR 147 million. The MoU with Eurobank was signed in December 2021. That MoU stated that the two parties will consider the acquisition by Eurobank S.A. of a plot (approximately 18 km2), located within the Business Hub in the area of Vouliagmenis Avenue, within which a high building (tower) of a total area of 40,000 sq.m. will be developed, under the supervision and construction management of The Ellinikon SA.

Lamda Development did not respond

Data Journalists submitted questions about the research to Lamda Development but received no answers.

Under the microscope of two experts

“We are still at the beginning of the initial phase of the projects” without it being clear when they will be completed, whether this will actually happen, or whether the investor will ever activate the possibility that the agreements give him the opportunity to leave prematurely.

This is the general conclusion after the flight made over the former Ellinikon airport by Data Journalists, along with two experts: George Anamateros, civil engineer and expert since 2003 in the list of the courts of Athens-Piraeus and Giannis Melas, also a civil engineer and at the same time contractor, certified real estate valuer, expert of the Technical Chamber of Greece (tee) and judicial expert on behalf of the Court of First Instance, Court of Appeal, and the bureau of internal revenue.

Buckle up and don’t… hope.

The images show the southern part of the area. For months now, the only thing that has happened is that the machines have broken in some places the hard surfaces on which the aircraft once stepped without having gone through the necessary deep excavations. It will also need to clean up soils contaminated by decades of spillage of fuel and other hazardous materials. For the rest, in a few days, we are entering the third year of the works from June 2021 when the first 300 million of the price was paid.

Who benefits from delays?

Who benefits from the delayed development in the work of the Ellinikon? The two scientists are trying to answer this question. Is it because of the huge project budget? Is it the antiquities that are expected to be found?

The airport left Elliniko in 2001 and its owner, the State, should have taken care of its property since then. The project could have started as early as 2016.

In its infancy and the undergrounding of the coast road

The initial phase of the excavations is the most advanced underground project of the coastal avenue. “It’s like seeing the initial excavations and the retaining walls of an apartment building that is going to be built,” says Yiannis Melas. It started as a simpler road construction project, he adds and wonders about the existence of a transport study as it is predicted fatal congestion from the movements of both the 30,000 inhabitants of the “new city” and visitors who will come for the Park, hotels, and other uses.

The park that stayed in the plans

By interrupting the flight for a while, our experts explain the implementation phases of the project as they have been imprinted “on paper”. They describe the huge amount of time given by the Samaras-Venizelos government for the completion of the projects on the coastal front. But also the improvement that the SYRIZA government achieved for the Park, where the terms are still unclear. The park should be done first because it would add value to both society and the contractor, they insist.

Invisible foundations of the skyscraper

Flying over the coastal front we stop over the plot on which the skyscraper that was officially presented two years ago as Marina Tower will be erected. Despite the investor’s assurances that the foundation has progressed, the picture refers to an earlier stage, that of the surveys on the geological composition of the soil. Greece’s biggest skyscraper should be finished in five years. The two years have already passed but the foundations remain invisible.

What if the investor “escapes”?

Return to the question of who favors delays in the implementation of the project. A reminder of the very high amount of investment, the unforeseen costs of finding antiquities, and the possible reluctance of the investor to put his own funds. G. Anamateros reminds us of a specific article in the contract that corresponds to an “escape button” for the investor. To “step” in the ten years when the gold-bearing coastal front will have finished, to “escape” having received from the sale of plots, and then to run not to the Park, but to the courts for compensation.

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