Flap over purchase of Ukraine's Embassy in Canada continues (02/07/93)

Flap over purchase of Ukraine's Embassy in Canada continues

by Christopher Guly

OTTAWA - "Someone is trying to intentionally smear my name," said Erast Huculak angrily over the telephone from his Toronto home.

His fury is based on persistent rumors that he was involved in a real estate deal with Oleksij Rodionov, former deputy head of the Ukrainian mission in Ottawa, in which they owned, sold and repurchased the three-story building now occupied by the Ukrainian Embassy in Ottawa.

Mr. Rodionov, dismissed by Ukrainian Ambassador Levko Lukianenko last fall over charges of undiplomatic behavior and misappropriation of embassy funds, was involved in the initial search for the embassy's office space.

Last September, Mr. Huculak and his wife, Lydia, who own a string of pharmacies in Ontario, bought the 331 Metcalfe St. property as a "one-time" gift to Ukraine, after the Ukrainian Canadian Congress (UCC) opted out of the deal. Although the Huculaks' company, Prestige Corp., still owns the building, the embassy pays only a nominal $1 a year in rent.

The Toronto family also supervised interior renovations, the installation of air conditioning and the purchase of some office and reception area furniture, according to Tony Rhodes, part owner of the real estate firm of Rhodes & Co., who arranged the Metcalfe Street deal.

Originally, the UCC, which as of December 31, 1992, had raised $1.5 million via its Ukrainian Embassy Fund, had agreed to find office and residential space for Ambassador Lukianenko and his diplomatic staff. Before they found their present building, former embassy officials Mr. Rodionov and Eugene Kutcher, also fired by the ambassador, shared office space with the UCC's Ukrainian Information Bureau. Meanwhile, Mr. Lukianenko worked out of his apartment at the Minto Place Suite Hotel.

A search for office space began, and the intention was to either purchase a building or rent space. Mr. Rhodes said that he strongly recommended against a leasing arrangement. "I told them it would cost between $55,000 and $60,000 per year, making some landlord really rich."

Eventually, the Metcalfe Street property was discovered, and a group, including Winnipeg lawyer Oleh Romaniw, who later was elected UCC president, met to decide on what steps to follow.

Mr. Rhodes said the building was originally controlled by the Toronto Dominion Bank after its owner, R. Chevalli, a landlord in the city, had defaulted on the mortgages. On October 1, 1991, the holding company of Young, Henry and Wheatley purchased it for $335,000.

After investing more than $100,000 in renovations and legal expenses to rezone it for a diplomatic office, the company listed the price at $650,000. "They had used (the banned) urea formaldehyde for insulation, which had to be removed," said Mr. Rhodes. "That cost about $40,000."

He added that Mr. Huculak first offered $500,000, but then negotiated the final sale price of $615,000 - down from the original $650,000 cost. As Mr. Huculak told The Weekly last September, an independent appraisal was done and "the price paid was what the house was estimated at."

Mr. Rhodes believes that some members of the Ukrainian community "nosed around" and discovered the $315,000 jump in the listing. While Mr. Huculak was out of the country, UCC officials pulled the plug on the deal. At the time Mr. Romaniw was optimistic that last summer's bilateral agreement between Russia and Ukraine would give Ukraine a 16 percent share of all former Soviet property and assets. So far, however, none of the six buildings occupied by the former Soviet Embassy in Ottawa has left Russian control.

Since his name was on the promissory note and he ran the risk of being sued for default, Mr. Huculak signed the deal for the property on Metcalfe Street alone on September 10, 1992, said Mr. Rhodes. After spending two and a half months refurbishing the interior, the building officially opened on December 1, 1992.

"He went out on a limb...and is not making a cent on this," explained Mr. Rhodes, who said he met with Mr. Huculak on five separate occasions. "Romaniw tried to screw us," he added.

Mr. Huculak, president of the Canadian Friends of Rukh, insisted the Metcalfe property is a gift to Ukraine. "I am not in cahoots with Rodionov," he said. "I hardly know the guy."

When Mr. Huculak presented the keys to Ambassador Lukianenko last fall, Mr. Rodionov told The Weekly, "By not having permanent office space, we lost many opportunities to begin bilateral exchanges and arrangements in Canada."

Today he sings a different tune. "I told (Mr. Huculak, Mr. Romaniw and the ambassador) that the building was not suitable from the beginning," he said recently. "It is too small and has no backyard to organize receptions."

Mr. Huculak said Mr. Rodionov referred to him in a letter of complaint that Messrs. Rodionov and Kutcher attempted to send to Kyyiv last fall. That letter was intercepted by the ambassador. However, Mr. Rodionov - who Mr. Rhodes said tried "to take a knife to the whole deal" - denies targeting Mr. Huculak.

"In that letter I told the Ukrainian Foreign Ministry about the ambassador's constant quarrels with the UCC," he explained. "One day he decides to do one thing, the next day, another thing."

But the financial chaos surrounding the embassy extends beyond its office location. Mr. Rhodes said that another deal, involving the purchase of a residence for the ambassador and his wife, also fell through.

The congress, which had signed a $3,900-a-month lease to rent a residence in the city's exclusive Rockcliffe diplomatic district, cancelled that plan. After receiving support at last October's triennial congress, the UCC purchased a $668,000 house for Mr. Lukianenko and his wife at 480 Island Park Drive.

Yet, Steven Kisil, executor of the estate of George Tumachewsky of Oshawa, confirmed that the deceased man left $450,000 from his estate to fund the purchase of the ambassador's residence. The UCC paid the balance and will use the rest of its embassy fund to cover ongoing maintenance expenses and salaries for future staff, said Bill Werbeniuk, executive director of the UCC's Winnipeg headquarters.

Meanwhile, Mr. Lukianenko awaits word from Mr. Huculak as to when the Toronto entrepreneur will officially transfer ownership of the Metcalfe Street property over to the embassy. "Last August, he formally gave it to the Ukrainian government on television. I know he means to finalize it soon," Mr. Lukianenko said, adding that he hopes this is done expeditiously.

Dr. Julia Woychyshn, president of the Ottawa branch of the Canadian Friends of Rukh and vice-president of the Ottawa UCC, said she thinks the Huculaks are awaiting some sign of stability on the part of the embassy. However, she denies that recent disagreements should be construed as a sign of an ongoing battle between the Friends of Rukh and the UCC.

"Part of the problem might be that the UCC doesn't know how to handle the embassy being here. They're in Winnipeg, and everything is happening here in Ottawa," she noted.

She added that the embassy's start-up has been largely due to a joint voluntary effort. Quoting her own figures, she tabulated a total of 1,346 hours of free labor, saving the embassy $20,190, based on a $10 per hour charge. "Everybody means well - we want the embassy to work."

Lydia Huculak fails to share that enthusiasm. "We have been working so hard, but there's always someone trying to dig up some dirt to discourage us. I don't know if it's jealousy or if it's a matter of whether they can (help) or not. But whether you give 10 cents or $10,000, it makes no difference, as long as people take part in the effort."

As for Mr. Rhodes, he is still reeling from his embassy experience. "Maybe (Mr. Huculak) has done one or two bad deals in his time, but (the UCC) really stung him badly. Rhodes Real Estate (Limited) has been in business in Ottawa for 35 years, and this has been the worst deal we have ever had."

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