Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Gostiny Dvor Tenants Fight City Eviction Plan

Eduard Favinsky transformed two trash-filled basements into the popular Armadillo Bar, decked out Texas-style from its smoky poolroom to its gleaming wooden bar strung with chili-pepper Christmas lights.

In the same building, the owners of boutiques such as Mario Valentino, Le Menage, Esplendor and Zolotoi Vek have turned more than 750 square meters of shabby, leaky space into upscale shops and stylish offices with brand-new plumbing, electric wires and telephone lines.

Between them, these entrepreneurs estimate they have invested more than $1 million in renovating Gostiny Dvor, the crumbling 19th-century arcade near St. Basil's Cathedral where they all rent space from the Moscow government, which has often sought private capital to bring the city's ramshackle mansions back to life.

But in August they received an eviction letter from local administrator O.S. Leontyev.

The letter, which one shop owner gave to The Moscow Times, asked tenants to "take steps to evacuate" Gostiny Dvor because of a city reconstruction plan. It warned that utilities would be turned off August 26 and announced that leases would "not be prolonged" to cover 1995.

Not about to pack up and leave behind their brand-new cast-iron banisters, mirrored ceilings, consumer-friendly shelves and marble staircases, a group of tenants set out to convince the Moscow government that it was shooting itself in the foot.

"We are counting on the common sense of our government to work with the people who are already here and willing to help, so that what we have already invested will not go to waste," said Alexander Osinin, deputy director of INTO, a holding company that owns three boutiques in Gostiny Dvor and is spearheading the drive against the evictions. Osinin said INTO has assembled a group of investors, including top banks like Inkombank and Bank Vozrozhdeniye, that will put up $100 million to renovate Gostiny Dvor. In return they want a 49-year lease, discounted rent, and registration of the investment group as a joint-stock company called "Gostiny Dvor," perhaps with the city as a shareholder.

Such a plan would be in keeping with the tradition of Gostiny Dvor, a trading center built on order of Catherine the Great and funded largely by private merchants, Osinin said.

Ivan III set aside the site off Red Square for stalls and hostels for foreign merchants in 1504. A stone complex was built in 1595; by the mid-18th century it was home to 74 granaries and 86 "fish-tents," one historian wrote.

Today's huge quadrangular building went up in the early 19th century when it bustled with banks and fancy shops. It decayed steadily under Soviet rule and now stands forlorn, its courtyard piled with junk, its cornices chipped and its paint peeling.

"The city has no money for renovations," said Osinin, calling "real, small investors" preferable to an "abstract large investor." Many grandiose city projects such as the Moscow City business center have been held up partly by the failure to find large foreign investors.

The Moscow government is reviewing the tenants' proposal, said Viktor Anokhin, successor to local administrator Leontyev.

Meanwhile, Anokhin said, the eviction letters still stand, "in accordance with city decrees." He said that under current policy, some tenants might be allowed to return after renovations if they contributed funds, but would not guarantee this.

Tenants concede that their contracts stipulated the city could evict them in order to renovate Gostiny Dvor as an "architectural monument."

But they are nonetheless exasperated by what they see as the tunnel vision of city bureaucrats. "It is the natural reaction of any bureaucrat -- he has a decree to fulfill, he sends out letters without looking at the real situation," said Osinin.