Four years ago, the Nikolsky shopping and entertainment center opened in central Kharkiv — one of the city's largest commercial complexes on Hryhoriy Skovoroda Street, 2-A. The estimated construction cost was 2.35 billion hryvnias. However, according to the prosecutor's office, the developer failed to fulfill a basic legal obligation provided for by law for any large-scale commercial project.
What is development participation and how much money is it
Development participation in infrastructure is a mandatory payment by the developer to the municipal community: the funds are intended for roads, utilities, and social facilities. For a shopping center of this scale, the amount was over 180 million hryvnias — approximately 7.7% of construction costs.
«During the multi-year construction of the shopping center, the developer failed to fulfill the obligation to pay development participation funds for the engineering, transportation, and social infrastructure of the city»
Kyiv District Prosecutor's Office of Kharkiv
The prosecutor's office insists that these funds must be collected into the community budget as lost development resources for the city. A lawsuit has been filed in court.
An object with chronic scandals
The Nikolsky shopping center opened on May 21, 2021 and from the first days attracted attention not only because of its scale, but also because of conflicts — from security concerns to social complaints. The current lawsuit is not the first legal problem for the complex, but this is the first time it concerns systemic non-compliance with obligations to the city, rather than a private or technical dispute.
The mechanism by which the developer was able to avoid payment for years remains an open question: whether it was insufficient municipal oversight during construction or deliberate delay, banking on legislative changes or debt forgiveness.
Context: who and how controls such payments
- Development participation was regulated by the Law of Ukraine «On Regulation of Construction Activities» — before its amendments in 2020, the calculation mechanism depended on decisions by local councils and was often challenged by developers in courts.
- According to real estate market analysts, non-payment or understatement of development participation is a common practice among large commercial developers throughout Ukraine.
- The prosecutor's office acts as a plaintiff in the interests of the community — meaning Kharkiv City Council either did not initiate collection independently or turned to the prosecutor's office for support.
If the court satisfies the lawsuit, the 180 million hryvnias would theoretically return to Kharkiv's budget — a city that is currently bearing wartime costs and where the question «where was this money before» would have quite concrete significance. The real question is this: are there similar non-payments in other large commercial facilities in the city — and will this lawsuit become a precedent for their revision?
