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. Last Updated: 07/27/2016

Moscow, City Have a Deal

The Moscow city government has signed a resolution to lease 14. 7 hectares to the Russian company City in the first step of a real estate project valued at $8 to $9 billion, the company said Wednesday.

City, headed by Russian entrepreneur Alexander Hazhakyan, will receive a 49-year lease on property near the Moscow Expocentre. City will not pay for the lease, but has agreed to build the roads, water and sewer lines for its leased property and a surrounding 95 hectares.

City plans to build its own real estate projects on its 14. 7 hectares and expects to sign an agreement within three weeks to become the manager for the entire 110-hectare project.

The agreement clears the way for the company to begin a unique share issue to pay for the project's infrastructure. City plans to release 1. 5 billion rubles worth of securities to the general public and to domestic and foreign companies to finance the construction.

The resolution was signed on Tuesday by top Moscow city government officials, including Boris Nikolsky, first vice premier. The resolution is a precursor to the signing of a formal lease for the land, which is expected by the end of this week. City plans to issue its shares shortly after the lease is signed.

"We are the only private company in Russia to which such a huge project has been given up for development", Hazhakyan said.

The project is the work of Hazhakyan, the former manager of the Russian Commodities and Materials Exchange.

The idea was hatched when Hazhakyan was seeking a permanent home for the exchange.

City officials were seeking at the time someone to finish the second phase of the Moscow Expocentre.

Hazhakyan said in a recent interview that he had support from several foreign governments to guarantee credits for construction or leases within the development.

Hazhakyan also said that several foreign oil companies and banks plan to build or lease space on the property.