Popular questions - Promprylad. Renovation

Popular questions

What is Promprylad.Renovation?

Promprylad.Renovation is an innovation center on premises of a revitalized plant in Ivano-Frankivsk, with four focus areas of regional development ‒ new economy, urban design,, contemporary art, and non-formal education. The project aims to unlock the potential of the city and region, stimulate entrepreneurship and economic growth, and create an effective model to follow for other cities.

What is the aim of the Project?

Promprylad.Renovation has to become a place where opportunities are created and introduced for aspiring people in order to unleash the potential of the city and region. The project should become a prototype for other territories with similar background.

How was the idea born?

In 2015, students of CANаctions architecture school explored Ivano-Frankivsk and worked on creation of urban constitution for the city. Victor Zotov, an architect and founder of the school, drew attention to a deserted plant. He shared the idea with Yuriy Fylyuk, CEO of Teple Misto platform. Later the platform started working on the project and engaged the strategic partners in it.

Who are the strategic partners?

Strategically, the project is being implemented by the consortium of non-governmental organizations Teple Misto, Insha Osvita, Pact Ukraine, MitOst, and LvBS.

Who is implementing the project?

A team of specialists with wide-ranging business experience and practice in social entrepreneurship and non-governmental initiatives (Teple Misto, Urban Space 100, and more). To see the project team go to our website the project team go to our website.

Does the project have any partners? Who has already supported it?

A number of non-governmental organizations, funds, and businesses supported the initiative on planning stage and during pilot floor implementation. These are Ivano-Frankivsk city administration, CANactions, Robert Bosch Foundation, BMW Foundation, 23 restaurants, Impact Hub Odessa.

Partnering contractors of the project are SRI Іnternational, Forma Architectural Studio, Moris Group law firm, Zotov&co architecture practice, Aimbulance agency, Ernst & Young, Garage Gang non-governmental organization.

Partnering donors are Sweden, Canada, PLEDDG, FCM, International Renaissance Foundation, Swiss Agency for Development and Cooperation, British Council, Federal Ministry of Economic Cooperation and Development of Germany, Heinrich Boell Stiftung, EVZ Stiftung.

What is the background for starting a social business in Ivano-Frankivsk?

Ivano-Frankivsk was possibly the first city in Ukraine to launch social business projects. In 2014 a prototype of Urban Space public restaurant was created here. Yuriy Fylyuk with a group of associates implemented a number of initiatives through Teple Misto platform, and now the team aims to reanimate Promprylad plant. Citizens of Ivano-Frankivsk have a rather high level of entrepreneurship, public activity, and are open-minded about innovations when it comes to social issues.

What kind of research was conducted to justify the hypotheses?

In 2016 SRI International (Stanford Research Institute), a credible research organization prepared a report on economic prospects of the city and region, and the feasibility of creating an alternative center on premises of Promprylad industrial site. This report highlights the big value of Promprylad.Renovation project in terms of developing the economy, contemporary art, non formal education, and urban projects. Being a prototype, this project may trigger changes for communities from all over the country and beyond.

Will this kind of project be of high demand in Ivano-Frankivsk?

Before the main phase of renovation started, the project received rent applications for over 95% of projected space, so Promprylad.Renovation will be successful as real estate business. Meanwhile, new cinemas, hotels and restaurants, a farmers’ market, a child center, and a park will not just be a critical part of the project ecosystem but will also be of practical utility for citizens and make social impact.

Wouldn’t it be easier to implement this kind of project in a bigger city?

The size of the city and social backgrounds can provide cheaper workforce and resources, which makes a difference when the overall budget of the project is 25 million dollars. Due to experience with previous projects, the team now has reliable partners and responsible contractors, and a relatively small size of the city makes grass-root connections as efficient as possible.

There are over 20 industrial zones in Ivano-Frankivsk. Why is it Promprylad?

Promprylad plant is located practically in the city center which makes it attractive for renters and visitors. Buildings which are still owned by the plant remain in good condition and can be renovated, and a 100-year history makes this territory historically important and interesting to preserve.

Will the plant cease to operate completely? Isn’t it worth to work towards preserving the operation?

In reality, this once super powerful industrial object is no longer operationally active. Today the number of employees of the plant is a little more than 150. They provide for small-scale production of commercial rotary type gas meters which are in poor demand. Nonetheless, the project team continues to explore possibilities of preserving and upgrading the manufacturing cycle so that the plant can keep operating.

What exactly will be done?

Architectural concept of Promprylad.Renovation provides for purchase and renovation of a 2 ha territory including four remaining Promprylad plant buildings. A few more buildings will be constructed, and a public square and a park will be opened in the yard.
For more details about Promprylad.Renovation architectural concept go here

It should be noted that over the past decades business owners have purchased a big part of plant buildings. These locations are now occupied with residential buildings, an incomplete construction of a shopping mall, and a number of other projected buildings which bear no relation to Promprylad.Renovation.

Is it safe to exploit the plant buildings for this kind of project?

Despite a long history and industrial past of the buildings, today the plant premises are absolutely safe to be at. In course of preparation for the reconstruction, examination of load-bearing constructions proved their viability for further exploitation. The plant follows environment management system in accordance with ISO140004:2015 standard and successfully passes reexaminations every year.

What kinds of technology were used in the course of reconstruction?

Test reconstruction of idle plant areas became an example of social entrepreneurship and efficient construction. Fascinating architectural concepts (all the concrete constructions and floating partition walls were preserved), modern energy-efficient technologies (heat pump project, frontage ventilation, aluminum window systems with energy-active type of glass) and decorations (made in Ukraine fiber-cement facade panels) were used in course of renovation.

What is ‘pilot’?

The idea to test the hypotheses was born in December 2016, and in June 2017 reconstruction of the third floor at one of the plant buildings on Sakharova street began. The goal was not only to reanimate the space but also to check if there is a demand for it among renters, and to gather up a team able to implement such an ambitious idea. The first event on the pilot floor took place in September 2017. Today there are 12 operators representing 16 functional spaces on a 1700 m² floor. 120 people work here.

Who occupies the pilot floor?

Being a reconstruction model, the pilot floor holds 16 functional space which represent all four focus areas of the project mission. A children’s center, office units, and a coworking space, dancing school, bar, conference hall, robotics center, craft manufactory, barber school, multimedia laboratory, urban studies center, exhibition hall and city administration office ‒ this kind of neighborship proves the importance of community-business-government cooperation.

What is impact investing?

Impact investment stands for investing in companies, organizations, and funds with an intention to make a measurable social and/or environmental impact alongside a financial return in the long run.

Impact investment has three mandatory criteria ‒ expectation of financial return, intention to improve a certain social or environmental sector, and upgrade the methods to measure this impact. Unlike charity, impact investments promote the idea of sustainable development of communities through supporting businesses and economy.

Which business spheres does impact investing apply to?

Impact investing has no boundaries, however, the investors often choose to support sustainable agriculture, alternative types of energy, improvements in healthcare, housing, efficient household management, innovations, as these are the spheres where positive impact of the investments will be more apparent.

What is the social impact of the project?

Promprylad.Renovation is an impact investing project, which is a type of investments aimed not only at financial return, but also at making a positive measurable social or environmental impact. 50% of the profits will be used to fund the initiatives focused on city and regional development. 30% of the center area will be given to social and non-governmental functions at a reduced rent rate.

What constitutes the business of Promprylad.Renovation?

As a business, Promprylad.Renovation is a multifunctional commercial realty object with a focus on proceeds of operational activity.

The project offers its renters a 3400 m² A-class office space, and 13000 m² B-class offices. Over 2400 m² will be given to an exhibition hall and conference center. Hotel rooms of different categories will cover a 4600 m² area.

What do we need investments for?

Raised funds will be spent to purchase the buildings and gradually renovate them, and to construct two new office buildings, and a cinema and conference hall. During next five years the project will raise 700 million hryvnias from private investors and organizations.

What will the main sources of income be?

Main sources of income are:

  • renting out office units and special-purpose spaces;
  • hotel and exhibition complex;
  • selling event tickets, holding turnkey events, short-term rent of exhibition and conference halls.

Does the project have a calculated business plan?

As any kind of a business project, Promprylad.Renovation has a detailed business plan developed by Ernst & Young. A business concept, suggested by SRI International research, provided the basis for the plan. Follow the link to check out the business plan.

What is the minimum amount of investment?

Minimum payment is an equivalent of USD 1,000 in UA hryvnias (UAH) at the exchange rate of the National Bank of Ukraine.

What is the procedure for investing?

Investors join the project through purchasing corporate investment fund shares. The fund owns 50% in Promprylad Holding LLC authorized capital. Due to legal limitations, retail investors (up to 1.8 million hryvnias) may invest through contributions to Promprylad Invest LLC authorized capital.

What are the main rate of return and other business plan indicators?

  • Total amount of investments is 25 million dollars
  • Reconstruction budget is 20.6 million dollars including VAT
  • Total area of the project is 37,800 m²
  • Stabilized net profit is 3.2 million dollars per year net of VAT
  • Asset value is 30.9 million dollars
  • IRR (Internal Rate of Return) is 17.7%
  • NPV (Net Present Value) 2 million dollars
  • Overall pay-back period is 12.2 years
  • Payback period for commercial investors is 13.3 years