$2.8 Bln Facelift Awaits Historical Districts

By Alla Tokareva and Nadezhda Zaitseva

Vedomosti

Published: December 5, 2012 (Issue # 1738)

ALEXANDER BELENKY / SPT New Holland, the island in which Millhouse intends to invest $388.2 million, is included in the development project.

City Hall last Wednesday approved the adoption of a program titled “The Protection and Development of Konyushennaya and ‘North Kolomna-New Holland’ from 2013-2018.” The amount of investment will come to 86.9 billion rubles ($2.8 billion), of which 69 billion rubles ($2.2 billion) will be funded through the municipal budget and 17.9 billion rubles ($579 million) by investors. The total area of both districts is 126.7 hectares.

Alexander Nikonov, first deputy chairman of the Committee for Economic Development, Industrial Policy and Trade (KERPPT), has announced that extra-budgetary funds will go toward the construction of hotels in the area around Konyushennaya Ploshchad and a cultural and business center on New Holland island. Two projects from the Plaza Lotus Group, which is under the control of brothers Boris and Mikhail Zingarevich, will be completed in the area around Konyushennaya Ploshchad. According to information from the company’s representatives, investments in the transformation of the building at 1 Konyushennaya Ploshchad into a hotel will come to $150 million, while the reconstruction of the building at 1 Field of Mars will cost $250 million.

The reconstruction of New Holland will cost around 12 billion rubles ($388.2 million), and will involve the creation of a cultural center, including a dance palace, a gallery, and a museum, as well as offices and hotels. Investments from Roman Abramovich’s Millhouse in the project will come to 2 billion rubles ($64.7 million) by the end of the year, said a spokesperson for the investor.

Around 75 percent of the budgetary funds will go into design, refurbishment, property redevelopment, the adaptation of cultural heritage sites for modern use and the creation of temporary housing for the relocation of residents, according to the document. Approximately 7 billion rubles ($226.5 million) will be spent on transport infrastructure and almost 9.5 billion rubles ($307.4 million) on energy infrastructure. As a result, the city will resettle the inhabitants of 570 communal apartments, repair 17 bridges and 1,200 meters of embankment, and reconstruct Sennaya Ploshchad, all at its own expense. A representative of KERPPT said that until now there had not been sufficient funding available for the program in the budget. The Treasury plans to finance the program with 1 billion rubles next year, 3 billion rubles in 2014, 5 billion rubles in 2015, 10 billion rubles in 2016, 20 billion rubles in 2017, and 30 billion rubles in 2018.

The Chairman of the Committee for Construction, Andrei Arteyev, spoke out against the project at a meeting of the municipal government; he recommended discarding traditional methods of surveying in favor of laser scanning, which requires far less money and time. Alexander Makarov, chairman of the Committee for the State Control, Use and Protection of Monuments, suggested postponing the adoption of the project. According to him, the New Holland investor is yet to present a plan for the development of the area to his department.

The reconstruction of a further five of the city’s historical districts, according to City Governor Georgy Poltavchenko, will require around 360 billion rubles ($11.6 billion), of which 200 billion rubles ($6.5 billion) will be allocated from the city budget; the rest will come from federal and private investments. The spokesperson from KERPPT did not comment on when projects for the development of the remaining historic districts will appear. The governor had previously valued a program for the preservation and development of St. Petersburg’s historic center at 4 trillion rubles ($129.5 billion).

Representatives of Millhouse and the Plaza Lotus Group expressed satisfaction with the adoption of the project. “Kolomna will attract tourists and as such our project can only succeed,” said John Mann, a representative of Millhouse. The company took part in the project’s development and sponsored its designers, he added.

This is a significant advantage for all of the investment projects in the districts concerned, said Yelena Deshpit, executive director of Plaza Lotus Group. The main concerns are the complex approach to infrastructure, the optimization of transport networks and the improvement of the urban environment, she added. “The main thing is that the process of getting the districts into decent condition is speeded up, but at the same time we won’t be seeing any significant savings in our projects,” said Deshpit.

It is a huge plus for investors working in these areas, said Dmitry Zolin, managing director of the Senator network of business centers. According to Zolin, attention from the authorities will provide an opportunity to speed up agreements. Although Senator does not have any projects in these districts, the fact that the city has decided to tackle the historic center is something that can only be welcomed, he added. “The authorities obviously expect an economic return, perhaps the arrival of new investors in these districts,” said Zolin.