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  • "This Unique And Wonderful Project Is At The Verge Of Collapse"

    "THIS UNIQUE AND WONDERFUL PROJECT IS AT THE VERGE OF COLLAPSE"
    Marine Martirosyan

    http://168.am/en/articles/6931
    Octobe r 10, 2009

    In May 2002 an agreement was executed between the Armenian
    government and the Cafesjian Family Foundation, according to
    which Gerard Cafesjian would sponsor and build the Cafesjian
    Museum [in Yerevan]. The deadline of finishing the construction
    was 2007. According to the agreement, during these five years the
    foundation would be exempted from all taxes. The government also gave
    11 hectares of land surrounding the Cascade to the foundation. The
    [Tamanyan Park across the] Cascade was given to the museum for using
    purposes only. The Cascade and the 11 hectares of land surrounding
    the Cascade was government's investment in the Cafesjian Museum
    project. The museum project was controlled by the Cafesjian Family
    Foundation, represented by the Vice President of the foundation John
    Waters. The foundation includes non-profit foundations as well as
    business entities (for instance, CS Media, Cascade Bank, etc.). Seven
    years have passed since the execution of this agreement but the museum
    is not built yet. Even more, now there are problems in this foundation
    and some people have been fired, including John Waters. According
    to our information, John Waters' Deputy, Edward Balassanian, the
    head of the Center for Contemporary Experimental Art (CCEA) was also
    fired. However the latter told us that he had not been fired but has
    resigned by his own request and since March 2009. He has worked at
    the Cafesjian Museum Foundation from June 2002 until March 1, 2009.

    - However you worked for the foundation until March 1, 2009,
    year 2009 is coming to an end but the museum has not been built as
    yet. Furthermore, there are persistent rumors and even exposes in
    the press accusing you, the President of Armenia TV Bagrat Sargsyan
    and the head of the foundation from the US John Waters.

    Even recently there were rumors that John Waters and Bagrat Sargsyan
    are simply bankrupting Gerard Cafesjian. Why did the implementation
    of the project fail if so much money was spent?

    - I don't want to discuss the innuendoes and rumors on people and I
    don't want to waste time on it. This is all I have to say about John
    Waters and Bagrat Sargsyan activities. As for the suspension of the
    museum construction, there were two main reasons for it. The first
    reason was connected with the management of the foundation, as a result
    of which development of the project was let out of control. The second
    reason is that they made a project for Mr. Cafesjian which exceeded
    the intended cost by 3-4 times. According to Gerard Cafesjian's plans,
    the budget of the museum would amount to 30 million dollars, but they
    presented a project amounting to 150 million.

    - You can build more than five museums in Yerevan with 150 million
    dollars.

    - Yes. It is really possible to build a museum with 20-30 million
    dollars as Mr. Cafesjian had planned initially. In 2002 he planned
    to spend 25 million for the museum, and another 5 million for
    reconstructing of the Cascade, which was given to him in a dilapidated
    and very poor condition. So the total budget was set at 30 million
    dollars.

    - Didn't they show the second version of the project to Mr. Cafesjian?

    - The project was managed by John Waters. He was in charge of
    managing the architect and it was his fault. I was only in charge of
    construction works, i.e. they had to give me the project and I had
    to implement it.

    - What were your official duties?

    - I was not in charge of the design of the museum project. I was in
    charge of managing utilization of the entire complex and the routines
    of the foundation. I was in charge of reconstructing the Cascade
    (project design and construction) as well as construction of the new
    museum based on the project of the architect. As you know I completely
    renovated the Cascade. The museum is another story...

    - Were you in charge of making the main budget of construction works?

    - During seven years every month we presented financial accounting
    on how much money we received and spent on different parts of
    the project (more than 20 separate line-items), we also submitted
    the budget and calculations for the following month with the same
    details. However in the initial budget of 30 million they did not
    take into consideration the salaries and the operational expenses
    of the Cascade complex. According to my calculations, annually about
    700 thousand dollar was spent on salaries. Every month we paid about
    3-4 thousand dollars for electricity. I even cut down the expenses
    for electricity by installing laser lights on the escalators (which
    had to work continuously) in order to operate them whenever a person
    approaches.

    Otherwise we would have to pay 7-8 thousand dollars per month for
    electricity alone. I really received rundown and broken equipments. We
    repaired everything. The structure was leaking water all over. We
    had to remove the stone coverings and install waterproofing. We
    had to spend a lot of money on these works. I have all necessary
    documentation for these expenses.

    You said that some people think I am guilty. Now I will present the
    list of the expenses, all of which are documented. In the period
    of June 2002 - March 2009 the expenses and investments of the
    Cafesjian museum foundation in Yerevan are as follows: salaries
    (annual salaries amounted to 700 thoousand dollars) - 4.900.000,
    current expenses, such as utility payments, public relations, etc. -
    1.400.000 dollars, reconstruction, renovation and landscaping of the
    Cascade and Tamanyan Park - 11.800.000 dollars, museum construction -
    4.800.000 dollars, advance purchase of metal and cement - 4.000.000
    dollars, removal of real estate encumbrances - 3.000.000 dollars,
    other expenses - 2.900.000 dollars. It should be noted that the
    expenses of the Cafesjian Museum Foundation made in the United States
    are not included in this list.

    Above mentioned expenses include construction of state of the art
    depositaries in the territory of "Hayfilm" [studios] to store the
    collection of Mr. Cafesjian in safe and proper climatic conditions. We
    have also built a big modern greenhouse in the territory of "Hayfilm"
    to cultivate the flowers to decorate the Tamanyan Park and surrounding
    areas of the Cascade. We used to spend about 20 thousand dollars
    every year to buy seeds for these flowers, which we would save since
    the greenhouse would produce several folds of what we would need
    ourselves. The excess would be sold in free market. By the way,
    Mr. Cafesjian appreciated and highly encouraged this initiative.

    I should add that during the last two years senseless additional
    unnecessary works have been done at already renovated parts of
    the Cascade. In 2007 a new architect named David Hutson was hired,
    who destructed renovations I had made at the Tamanyan Park and the
    Cascade. He did redecoration of the exhibition halls.

    For example, changed the slanted ceilings to horizontal ones, installed
    frosted glass windows, etc. while renovation of all of the halls had
    been completed and they were ready for exhibitions. When I got this
    job, the exhibition halls did not even have windows. I installed
    new windows. However, the new architect replaced these windows and
    specified frosted glasses which were very expensive. Furthermore,
    the new architect decided to dig a big hole in the place of the
    museum because he wanted the basement of the museum to consist of two
    floors. According to the initial project, the building's basement was
    supposed to be one floor. We spent so much money for digging this
    hole which was very disproportional in comparison with the initial
    budget of the building. We spent 4,629,000 dollars on the earthworks
    which included digging this hole.

    During digging the initial hole we met a thick layer of solid basalt
    stone. We had to spend a lot of money to dig this thick layer of
    stone. Any experienced architect knows that digging stone layers
    is more expensive than constructing a new building. As an architect
    I realized that in such a situation the work has to be stopped and
    the project needed to be revised accordingly, but we were forced to
    obey and agree with their decision without argument. Now this hole
    is fully built from the inside. What Hutson did was senseless. He
    presented a project which Mr. Cafesjian naturally could not agree with.

    - What is the status of this process now?

    - Mr. Cafesjian did not plan to spend 150 million dollars on the
    museum and he is right. I have heard that he will come to Yerevan in
    November. His visit has been delayed about 4-5 times. In one occasion
    he had even rented a plane and wanted to visit Armenia with several
    senators and high ranking officials to take part in the opening
    ceremony of the museum. But his visit was delayed several time as
    the architect was not able to provide drawings in time, as a result
    of which we were not able to finish the construction works. Now it
    seems that they are working on the Tamanyan Park, they have brought
    the statue of the Roman Gladiator to the park and have installed
    benches. They are trying to finish the works. I have also heard that
    they are planning to organize exhibitions in some of the halls of
    the Cascade.

    - Will they be able to?

    - I think they can finish the works fast if the quality of work is
    made secondary.

    - Have you ever met Mr. Gerard Cafesjian?

    - Once I met him in New York. We talked for about 2-3 hours. This
    conversation was not connected with the museum. I saw him in Yerevan
    several times too, but I did not have the opportunity to meet with
    him. My contact with him was only through J. Waters. There have been
    cases when I wrote letters about the situation and my expressed my
    concerns to Mr. Cafesjian, but I did not receive any answers from
    him. I sent the copies of these letters both to John Waters and Michael
    De Marsche (the executive director of the foundation since 2007).

    I was especially concerned of the Center for Contemporary Experimental
    Art (CCEA). This was my second problem. When I was hired 7 years
    ago, my salary was three times less than the salary of a person
    of my qualifications in New York. I worked for seven years without
    salary increase. Three years ago I agreed with John Waters that if
    Mr. Cafesjian sponsored the CCEA, I would work until the end of my life
    without asking for salary increase. I made this agreement with J. John
    verbally without any document. But the situation and relations inside
    the foundation started worsening. I immediately informed Mr. Waters
    that I could not work with the architect any more. I also told him
    that if they thought I was an obstacle I could resign. He disagreed
    and said that they will take care of the problem. I continued to
    work. But 8 months before my final departure on March 1, 2009, they
    violated the agreement concerning the CCEA and stopped the financial
    support. Mr. Waters informed me with a mail that the reason of stopping
    the sponsorship was connected with the financial crisis and they would
    reinstate the support soon. Based on this promise I decided to use my
    family savings to pay for CCEA expenses as I believed they would return
    these funds, as promised. They have not paid 75.000 dollars for those
    eight months yet. I have no documents, thus I cannot sue them. But,
    even if I had a document I would not do that because Gerard Cafesjian
    is a great philanthropist and I would not insult him by doing so,
    even if they were not fair to me.

    - Which documents did John Waters sign and which ones did Bagrat
    Sargsyan?

    - Some areas surrounding the Cascade were encumbered upon by private
    parties. The transaction documents on purchasing these lands, houses
    and garages to remove the encumbrances were signed by Mr. Sargsyan
    and Mr. Waters.

    - Why did not your letters reach Mr. Cafesjian?

    - In December 2008 when I saw that the project of the museum was rather
    big and the situation was not good, I sent an action plan in a letter
    to Mr. Cafesjian and described what we had to do to get out of the
    situation. I wrote a timeline and informed that I would finish the
    museum and the Cascade works within three years at a budget determined
    by him, with the condition that I had to be in charge of managing the
    project. I addressed the letter to Mr. Cafesjian and sent the copies to
    Waters and De Marsche. I have never gone over people's heads. We were
    told that the health condition of Mr. Cafesjian was not good and we
    were told not to write letters to him and inform that the situation
    was drastic in order not to put emotional pressure on him. Thus,
    apparently John did not pass this letter. Mr. De Marsche after this
    letter totally changed his attitude towards me. The person who used
    to tell me that they needed me, changed his attitude and even did not
    greet me or invite me to meetings. In February I told John about this
    situation and presented my resignation.

    Eventually my letter reached Mr. Cafesjian. I suspected that John had
    not sent it to Mr. Cafesjian. I sent the same letter to Mr. Cafesjian's
    adviser in April and mentioned in it that I it had been sent to him
    in December. They replied that they had not received any letter from
    me. Later the adviser informed me that Mr. Cafesjian had read the
    letter and appreciated my proposal. He asked me to stay in Yerevan in
    May in order to meet with Mr. Cafesjian's new representative. When
    that person came, his mind was already poisoned. We talked for two
    hours and he eventually realized that there had been a conspiracy,
    and apologized to me several times.

    They cannot accuse me of anything. I stand behind all of my signatures,
    except in two cases: One relates to the sale of reinforcement metal
    and the other is removal of land encumbrances, i.e. the transactions
    of buying the lands around the territory. Persons responsible for
    these transactions were Bagrat Sargsyan and John Waters. I did
    not have any participation in it. The other relates to the sale
    of the metal. The metal was sold by direct order of John Waters (I
    have the letter). When the project was ready, I asked the director
    of Haypetnakhagits (ArmStateProject) to provide the list of the
    metals necessary for the implementation of the project. We bought
    this metal from Ukraine by the approval of John Waters and paid 770
    dollars per ton for it. We bought 4.800 tons of metal. It was not
    a risky decision because if we did not use a part of that metal we
    could sell it anyway. The fact is that when Mr. Cafesjian decided
    to make the project smaller, we had 3000 tones of additional metal,
    which we did not need anymore. Mr. Waters and Mr. De Marsche initially
    ordered us to sell the metal for not less than 1200 dollars per ton
    with the condition that the money had to be paid in cash. At that
    time we owed 2-3 million dollars to our contractors who asked us
    to give this metal at a little cheaper price which would also clear
    our debts. Some of them were prepared to pay up to 1000-1100 dollars
    per ton for this metal. In one week, however, we received a written
    instruction from Waters to sell the metal at 770 dollars per ton
    to the same intermediary company, through which we had imported the
    metal to Armenia from Ukraine. What could I do? I had no choice but
    to obey my superior's order.

    - Is the crisis the reason why Mr. Cafesjian controls his money
    now? According to our information, about two months ago he fired
    180 people.

    - It is really a very sad story. These people have worked for the
    foundation for many years with great care and diligence, and now
    they are faced with losing their only source of livelihood because of
    the crisis. This, probably is the most cruel, but inevitable outcome
    of capitalism...

    I remember about three years ago Ross Vartian, the director
    of Cafesjian's lobbying organization in Washington, said to me
    during a casual conversation that "When they show Mr. Cafesjian the
    spread-sheet of the funds spent on his projects, he will have a heart
    attack". Mr. Cafesjian has invested a lot of money on "Hayfilm", the
    museum, alternative energy research organization and other projects,
    which either do not function as they should, or are not completed
    as yet. I think such report has been sent to Mr. Cafesjian, and it
    is the reason why he made the above mentioned changes. I think it
    is not the end. There will be more serious developments. I am really
    sorry for these turn of the events. This unique and wonderful project
    is at the verge of collapse. It does not matter whether Balassanian
    will finish the project or someone else. The important thing is that
    huge investments have been made in the cultural sector in Armenia,
    which has to be supported and helped to bring them to a desirable
    conclusion. I say this with utmost sincerity and best wishes.
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