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. Last Updated: 07/27/2016

Hotel Development Goes Ahead

The Dutch-German firm ADVANTA Management AG received official approval Wednesday from the Moscow city government for its $300-million redevelopment of the landmark Hotel Moskva on Manezh Square, an official with the company said Wednesday.

Andrei Bykov, consultant to ADVANTA and the company's representative in Moscow said the project includes upgrading of the Moskva's facilities and construction of a large, modern conference center. An underground garage and a shopping center will be built under Manezh Square.

ADVANTA, which already runs the five-star Kempinsky Hotel in Moscow, will create and manage at its own expense a park which would be developed in the area between Hotel Moskva and the Metropole Hotel, located just behind the Moskva, Bykov said.

"It is a very serious project and it took some time for the government to think over its final decision. We are happy it is over and we can begin our work", Bykov said.

Last month, ADVANTA group was chosen as the main developer for the Moskva by an official tender committee of the Moscow city government. Four other companies participated in the bidding.

Bykov said that according to the decision signed by Moscow's major Yury Luzhkov, the hotel will be transferred to a joint stock company, 49-percent owned by ADVANTA. The remainder will be divided between the Moscow Property Committee and the Moskva's employees.

He said the decision will ease tension over the Moskva's privatization.

Commersant Daily and Pravda have recently published articles, saying that the project was being delayed because the Moskva's employees were demanding the right to privatize the hotel and take a controlling share in the enterprise. But Bykov dismissed the claims, saying the employees were offered excellent conditions.

The Moscow government's decision says that all the employees willing to work for the renovated Moskva will be trained at ADVANTA's expense.

"In two years the employees will turn into co-owners of a hotel worth at least ten times the present value and will receive dividends", said Bykov.

Bykov said that there was still some disagreement with the current management of the hotel about the project but he said he hoped these problems could be worked out in negotiations with the Moscow government.