Hotel and Retail to Highlight Pedestrian Lane

Time has marched on since Moscow's City Council came up with an ambitious plan in 1982 to turn Stoleshnikov Pereulok into a pedestrian shopping zone. Now, workers are performing a double step to unveil an adapted version in time for the city's September 850th birthday party.

The block of Stoleshnikov Pereulok between Ulitsa Petrovka and Ulitsa Dmitrovka was closed to traffic last week as workers begin to transform the central Moscow street into a pedestrian retail zone.

The outlines of a new Stoleshnikov Pereulok are beginning to take shape. A small white chapel at the foot of the lane marks the spot on which an earlier church, torn down in the 1930s, once stood. A few steps away, across a newly laid pedestrian walkway, a retail and 270-room hotel complex is taking form. Next door is a freshly renovated office and retail building that houses a 24-hour clothing boutique, a music store and an Internet cafe.

That wasn't quite what the Moscow City Council had in mind for the street when it struck upon a master plan 15 years ago. That blueprint included 25 retail stores along a fountain-filled car-free zone, with covered passageways between buildings. There were to be two movie theaters, a 500-room hotel, an exhibition hall, a retail arcade, two restaurants and six cafes.

The project passed through various organizations until it fell to city-backed developers Mospromstroi, and in the intervening years, most features of the original plan fell by the wayside.

The shops-and-hotel concept will remain, however, in buildings 14, 16, 18 and 20, a unified a complex on the southern side of the street developed by Novostroi, a division of Mospromstroi, and built by the contractor Kontinent.

Novostroi has already completed the project's first phase, the bright, pastel green building No. 14, which houses about 10,000 square meters of office space as well as the Base 14 retail complex, which includes a Levi's store, Chevignon clothing store, CD shop, a French cafe and an Internet cafe.

Novostroi is also overseeing construction of the adjacent Stoleshnikov 16 to 20, a retail and hotel complex with a target completion date of Dec. 15.

According to Paul Schobel, who represents Parus, the owner of the Stoleshnikov 14 to 20 development, the entire project will represent about 70,000 square meters of office, retail and hotel space.

Schobel said the complex includes roughly 2,500 square meters of retail area and 10,000 square meters of office space in the top floors of building No. 14. The office space, he said, has been fully leased.

According to Alexander Shapiro, general director of Novostroi, office space was let out at a shell-and-core cost of $650 to $800 per square meter per year. Ground floor retail space, he said, is going for $1,500 to $2,000 per square meter, per year.

The bulk of the complex's space will be taken up by about 270 rooms of hotel space, according to project representatives.

Both Schobel and representatives from Kontinent, however, expressed doubt the hotel would be completed by the projected Dec. 15 delivery date. Schobel said the hotel, which would be either a four- or five-star facility, would be run by "first-class Western management," although he said a partner had not yet been chosen.

Schobel said the project's developers were pushing to open the retail portion of the building in time for the city's September anniversary celebration.

"It would be wonderful if we could open the retail area by the city's birthday," said Schobel. "I don't know if we can manage it, but we'll try."

Retail clients signing onto the new retail area will join the existing Crocus-Moskva shoe store and a number of other clothing stores, boutiques and cafes on the block. A jewelry store and bookseller are also expected to open soon in Stoleshnikov 14.

The retail tenants on Stoleshnikov Pereulok should benefit from the street's central location: It is located within walking distance of the Kremlin and a number of other major retail centers, including GUM, TsUM, Petrovsky Passage and the soon-to-open Manezh Square shopping center.

Longtime retail residents of the street express satisfaction with business there. Larisa Komarova, director of Crocus' Stoleshnikov stores, confirmed her organization's intent to open another store on the lane. Similarly, the owner of Base 14, JamilCo, expanded from a single Levi's store on the street six years ago to its current multi-shop quarters.

"Naturally, where there is retail space -- and there is a lot of it here -- there is the opportunity to expand and to offer other brands," said Andrei Rogachev, JamilCo's marketing director. Rogachev added that JamilCo is planning to open Swatch, Walford and Naf-Naf outlets on the street.

Some analysts, however, expressed doubt that Stoleshnikov will become a prestigious retail center.

"Manezh Square is taking a considerable share of the good renters. It's nearby, and I think Stoleshnikov, with its limited floor space, will have a very difficult time competing with it in that respect," said Andrei Kupriyanov, marketing director for the SAVA real estate agency.

Kupriyanov noted that many of the boutiques on the street appeared to be targeted at a young market, but that others -- jewelry stores, a fur boutique and an inexpensive bistro -- detract from the perception of a careful retail mix.

"If I were in the city administration's place, I'd have made it into some kind of specialized [commercial district], like for jewelry stores. Then you really could talk about a certain kind of exclusiveness," Kupriyanov said.

-- Jeff Grocott contributed to this article.