Sõõrumaa denies hidden business interests in Tallinn

Businessman Urmas Sõõrumaa, set to represent his election coalition in Postimees’ mayoral candidates’ debate today, says that he has no hidden contracts regarding city property with removed Mayor Edgar Savisaar – everything is public.

The annual volume of contracts belonging to Sõõrumaa’s companies in the capital is €5.5 million. The businessman manages five of the capital’s schools, produces gas in the city’s Jõelähtme landfill, rents an office building to the city’s financial department in the Rotermann Quarter, and is the tenant of the city’s Tondi outside tennis courts.

“Had I even a single shady deal with the city, or were it true I secretly own traffic control devices manufacturer Signaal, it would be the talk of the town at the Liivalaia courthouse every week,” Sõõrumaa said, pointing to Edgar Savisaar’s ongoing corruption trial.

The Center Party city government started looking for ways out of schools’ property management contracts with Sõõrumaa after Savisaar’s removal as mayor by the court.

Renovator and property manager Vivatex Holding, owned by Sõõrumaa’s investment firm U.S. Invest, collected €4.6 million from Tallinn last year and reported a profit of €2.3 million. Vivatex is the only schools’ property manager in Tallinn that has not paid its owner dividends.

“Considering the company invested nearly €32 million in renovation of schools and borrowed nearly €24 million, the rate of return on equity is not as high as it might seem at first glance. Vivatex’ profit exceeds forecasts because Euribor has hit an all-time low,” the businessman explained.

Vivatex renovated five schools in Tallinn: The 32nd High School, Laagna High School, Pelgulinna High School, and Kalamaja Basic School. The work cost nearly €30 million based on a contract signed for a period of 30 years in 2006.

The first school to be completely renovated was the Pelgulinna High School that was reopened on September 1, 2007. It was Estonia’s first schoolhouse to be renovated in public-private partnership.

To fend off accusations his company is making too much money off renovating Tallinn’s schools, Sõõrumaa offered to complement the schools with sports halls this spring. The halls would host physical education classes during the day and private fitness clubs in the evenings.

“It would be an investment of up to five million: we would lay the cornerstones this fall and open doors next year,” Sõõrumaa said in April.

The Center Party refused the development project that would have had definite campaign appeal.

Tallinn City Office rented 1,932 square meters of office space from Sõõrumaa in the Rotermann Center to put up the city’s financial service for a period of five years. The city pays the businessman €290,000 a year.

“Reorganization of the city’s financial services brought the accounting of 279 city agencies and nine administrative units under one roof, and it was the mayor’s belief that the service cannot be located somewhere on the outskirts of Lasnamäe borough, but has to be in downtown Tallinn,” said head of the service Katrin Kendra. “The Rotermann Center won the competition because it offered the most favorable rent conditions.”

A temporary committee was formed that weighed several offers.

The financial service employs 113 people and is divided into the city treasury department (that covers financial and loan management and budgeting services, as well as a strategy unit in charge of city development and foreign financing) and an accounting center.

Sõõrumaa has the majority holding in combined heat and power company Tallinna Prügilagaas operating in Tallinn’s Jõelähtme landfill. The company’s turnover amounted to nearly €600,000 and its profit to over €70,000 last year.

“Sõõrumaa’s company won the waste gas management competition and launched its activity before I took office,” said Kertu Tiitso, member of the board of the landfill’s manager Tallinn Waste Recycling Center.

Postimees is not aware of the details of the tennis courts’ rent contract. Sõõrumaa constructed the Tere Tennis Center in Tondi with support from the city and Enterprise Estonia (EAS). The businessman later sold the outside courts to the city and has them on rent today.

To characterize his business relationship with the city, the businessman told a story of the dilapidating Linnahall building from years ago. “The city basically wanted to give me the building in 2003-2004; however, nothing came of it,” Sõõrumaa recalled. “I would have fixed it up for €50 million, and the city would have a functional conference venue today.”

Sõõrumaa added that as a major real estate developer and security company owner he might not be aware of all minor transactions his companies might have had with the city.

“I develop more than 200,000 square meters of land in the capital and employ more than a thousand people, which is why it would be naive to presume I do not have contracts with the city,” Sõõrumaa explained. “I would ask the voter: do we want people who cannot even feed their families to run this city, or should we trust it to those who give jobs to multitudes.”

If you notice an error, highlight the text you want and press Ctrl + Enter to report it to the editor
I recommend
No recommendations yet


Post your comment to communicate and discuss this article.

Chairman of the Estonian Chamber of Commerce and Industry and one of the owners of construction group Nordecon, Toomas Luman, finds that a prime ministerial candidate should first and foremost be able to answer the question of what will become of the demographic crisis in Estonia. The businessman sees controlled introduction of foreign labor as the solution. A digital construction cluster was created in Estonia a few years back to bring innovation to the s...
Last year saw 27,125 registered offenses, up 0.5 percent from the year before. Violent crime was up by 12 percent to 8,249 offenses. PHOTO: Dominic Lipinski / PA Wire / Press Association Images / Scanpix Growth was biggest for domestic violence – the police launched criminal proceedings in 3,607 cases that constitutes an increase of more than one-third – annual growth of 37 percent from 2,632 cases in 2017. At the same time, reports of domestic violence we...
TALLINN - Ahead of the withdrawal of the United Kingdom from the European Union, tens of thousands of British citizens have chosen the citizenship of some other country, but only one Brit has recently chosen an Estonian citizenship. Spokespeople for the Ministry of the Interior told BNS that only one British citizen submitted an application for Estonian citizenship last year and the applicant was also granted the citizenship. Before that, no Brits had soug...
TALLINN - Experts from Finland, Denmark, Norway and the Netherlands highlighted the importance of decentralization and granting local governments greater decision-making powers at a conference titled "Strong local government -- strong state?" in Tallinn on Wednesday.  All Nordic countries have chosen a model granting local governments significant decision-making powers, thus the central government does not prescribe how local governments are to fulfill the...
The language learning application Drops by game developer Planb Labs, established in Estonia by Hungarian founders, was named Google Play's best app of 2018. With the number of downloads surpassing 10 million, Drops was named Google's app of the year as the revenue of Planb Labs, a company registered in Estonia, increased fivefold, CNBC said. The developer's revenue grew from €335,000 in 2017 to €1.7 million in 2018. The company's shareholders include Hung...
TALLINN - The Estonian Health Board has banned the distribution of chlorine dioxide, also marketed as the Miracle Mineral Supplement (MMS), the A-component of an unused product, meaning the sodium chlorite solution, must be taken to a hazardous waste collection facility. Ester Opik, head of the Health Board's North regional department, said that the banning of the distribution of the product was caused by the fact that MMS, distributed as a cosmetics produ...
Nature cannot abide a vacancy, as the saying goes. If just one year ago, Estonia was battling the sale of MMS and the practice of giving it to children, a new “miracle cure” called Advanced TRS has appeared on the market now. Even though the make-up of the substance is different, the promise to cure autism and cleanse the body of heavy metals, which kind of extreme detox is accompanied by severe side-effects, sounds all too familiar. TRS is recommended to...
Allied NATO battalions will soon mark two years serving in the Baltics. They have worked better than expected but would need prepositioned heavy weaponry and a functional contingency plan in case of a crisis, a report by the International Center for Defense and Security (ICDS) finds. “We do not know how Russia would have acted had we not welcomed allies in Estonia, Latvia, Lithuania and Poland in 2017. I’m afraid they would have tested our resolve,” one of...
The time of filing income tax returns is nearly upon us. The new income tax system, in effect since last year, will obligate many women who went on maternity leave toward the end of the year to make additional income tax payments, while those who give birth in the middle or at the beginning of the year have no such obligation. What this means is that some women will owe the state simply for giving birth “at the wrong time”. Laura Roop, who went on maternit...