KYRGYZSTAN: UPDATE ON HYATT HOTEL'S DISPUTE WITH

UNCLAS BISHKEK 000969 SENSITIVE SIPDIS DEPARTMENT FOR SCA/CEN (GORKOWSKI) EEB/IFD/OIA (STILLWELL) E.O. 12958: N/A TAGS: EINV KIDE ECON KG SUBJECT: KYRGYZSTAN: UPDATE ON HYATT HOTEL'S DISPUTE WITH CITY OF BISHKEK REF: A. (A) STATE 49477 ¶B. (B) BISHKEK 469 ¶C. (C) BISHKEK 2008 875 AND PREVIOUS ¶1. (SBU) The following is an update to the dispute between a U.S. based hotel chain and the City of Bishkek (refs). a. Claimant A b. 2008 c. Claimant A, a major U.S.-based hotel chain, operates a hotel in Bishkek on approximately two hectares leased from the City of Bishkek. In July 2008, the City of Bishkek claimed that the hotel's fence blocked "public access" to the statue of a famous Kyrgyz ballerina and demanded that the hotel remove its perimeter fence. However, the fence did not block pedestrians from entering the area where the statue is located. In July 2008, municipal authorities shut off the water supply to the hotel, and city workers tore down the security fence surrounding the hotel. Meanwhile, the Mayor of Bishkek's Office released a press statement noting that the hotel pays $2,600 per year to lease its land. Claimant A believed that the Mayor was seeking to force Claimant A to pay more for the land it leases rather than honoring the original terms of its lease. The Charge' d'Affaires protested these actions to the Deputy Foreign Minister, and the Embassy sent a diplomatic note of protest. Later in July 2008, municipal authorities restored the water supply to the hotel. Embassy representatives also met separately with the Mayor to request that the fence be reinstalled and to emphasize how the incident could discourage foreign investment in Kyrgyzstan. In February 2009, Claimant A and the City of Bishkek signed a new land lease agreement. Under the terms of the new agreement Claimant A agreed to pay a higher amount to lease the lands and agreed to move the gate regulating automobile entrance to its grounds closer to the hotel, past the statue of the ballerina. According to a representative from Claimant A, as of September 2, 2009 the situation is now resolved and the City of Bishkek has made no more complaints or demands. d. (SBU) Claimant A: Hyatt Regency Bishkek GFOELLER