GOLDEN OPPORTUNITY TO ACQUIRE LAND FOR

C O N F I D E N T I A L CHISINAU 000080

SIPDIS

STATE FOR OBO ACTING DIRECTOR SHINNICK
STATE EUR-IO/EX

E.O. 12958: DECL: 02/05/2019
TAGS: ABLD AMGT MD
SUBJECT: GOLDEN OPPORTUNITY TO ACQUIRE LAND FOR
NEW EMBASSY COMPOUND IN CENTRAL CHISINAU

REF: 08 CHISINAU 1156

Classified By: Ambassador Asif J. Chaudhry for
reasons 1.4 (b) and (d)


1. (C) Action request in para. 4


2. (C) We were concerned that our new embassy
would sit out in the sunflower fields, resplendent
but lonely, far from the center of Chisinau. Then
the President suggested a centrally located
military site that might work for the new U.S.
Embassy. For a year we negotiated with government
officials to shift ownership of the land away from
the Ministry of Defense, to obtain parliamentary
approval for privatizing the land, and to pass a
government decision to sell the land. We were
close to a final offer from the government,
discussing with the First Deputy Prime Minister's
staff about the form that the purchase would take,
when we read in the papers that the site would be
auctioned publicly. No prior notice, no reason
why a direct sale to the USG was not possible.
But the gods smiled on us. The Vasile Lupu Street
site we wanted had no bidders.


3. (C) The Ambassador pressed our continued
interest in the site in a letter to President
Voronin. The President, Prime Minister and First
Deputy Prime Minister (FDPM) met; the President
gave a green light to proceed with an offer to the
Americans. On February 6, FDPM Igor Dodon told
the Ambassador that the USG could acquire the land
in one of three ways (see below). Dodon noted
that the recent tender set the price per hectare
at USD 1.1 million for the Vasile Lupu Street
land. The seven-hectare site might cost the USG
as little as USD 7.7 million--less than the
estimated price last year and quite a bargain, we
believe.


4. (C) Commercially available, large plots of land
in the central part of Chisinau are no longer
available. Post firmly believes this is a unique
opportunity to acquire a sizable piece of land in
Chisinau. We want our new embassy to be seen by
Moldovans, not relegated to the sunflower fields.
We want to be present in Moldovans' minds, an
active partner in Moldova's evolution, not an
afterthought at the edge of town. Post requests
that OBO dispatch a site survey team quickly to
Chisinau to review the site and begin formal
negotiations with the Moldovan government. We
have a short window of opportunity--one that
doesn't look out at the sunflower fields. Let's
take it and purchase outright this plot of land.

Method 1: Long-Term Lease Agreement
--------------


5. (C) Dodon stated that the first option of
acquisition would be a long-term lease agreement
for the site. The lease would permit the USG to
build on the land and then after the construction
was complete the USG could then purchase the land
from the GOM. In order to complete this
transaction, first the USG would need to determine
how much land it would require. The total plot of
land was seven hectares. The GOM would need to
know whether the USG would require less. Minister
Dodon mentioned the pros and cons of this option.
For the USG, it would be significantly cheaper to
lease the land and then buy it at a reduced rate
once construction was completed. The negative for
the GOM would be the fact that the proceeds from
the sale of this land would have gone to the
Ministry of Defense (MOD) in order to build
apartments for the soldiers displaced from the
Vasile Lupu Street site. If the land were leased,
the GOM would need to ask the USG for funds to
resettle its troops. (Note: The cost of
resettling the displaced troops and the uncertain
price to be paid after construction may end up not
being such a bargain over purchasing outright.)


Method 2: The Intergovernmental Exchange of
Property
--------------


6. (C) This method of acquisition outlined by the
Minister would be an intergovernmental agreement
on the exchange of property in Chisinau and
Washington, DC. The GOM would give the USG land
and possibly buildings for a NEC and the USG would
reciprocate by giving the GOM land and possibly
buildings of equal value in Washington, DC. Dodon
cautioned that the intergovernmental exchange of
property was a difficult method, because it
required approval by both the GOM and the
Parliament. Securing approvals could be time
consuming for both the USG and GOM.


Method 3: Direct Purchase of the Land
--------------


7. (C) (Note: Post recommends this option) Dodon
stated that a third option would be for the USG to
write a letter to the GOM requesting to purchase
the land on Vasile Lupu Street. The USG would
then purchase the land at market value. The GOM
and Post would form a committee to determine the
market value for the land using an independent
auditor. At the recent tender offer, the GOM had
priced the land at USD 1.1 million per hectare,
which is less than Post was quoted last year as a
possible price. The minister was very supportive
of this method because it solved the problem of
finding funds for building new housing for its
soldiers and it allowed the USG to own the
property outright. He did caution that with the
election coming soon (April 5),it would be best
for the USG and GOM to come to an agreement at the
earlier possible time.

We should take advantage of this short window of
opportunity, lest we end up with a window looking
out on the sunflower fields.

CHAUDHRY