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

. Last Updated: 07/27/2016

Ice Palace Faces Financial Uncertainty

ST. PETERSBURG -- As workers race to finish St. Petersburg's new hockey stadium in time for the city to host the World Ice Hockey Championships, questions remain about the financing, ultimate cost and even the name of the 12,000-seat stadium.

Although officials say the building will be ready for the opening game in late April - the frame is already finished, and 500 people are working in two shifts of eight hours each - no one knows for sure how much the total bill will be.

Finnish construction firm Skanska OY signed a contract in December to build the stadium on Prospekt Bolshevikov for $84 million. City Hall doesn't dispute the value of the contract, but has asked Skanska to build it for closer to $50 million because Russia's financial crisis has made the cost of local labor and building supplies much cheaper.

Skanska OY's project manager, Arto Hagg, confirmed that City Hall asked for a less expensive price, which he believes is possible, but maintains that his company is not legally obliged to charge less.

"We will complete the construction on time if our client will fulfill its obligations," Hagg said in an interview Monday. "But if there is no money, there is no work."

When Dvorets Sporta, the city-owned company in charge of the stadium's construction, signed the deal with Skanska, Yakovlev promised that not a single ruble from the city budget would be spent on the new stadium. Instead, Yakovlev offered the city budget as a guarantee to private investors to lend money.

So far, Dvorets Sporta has received credits totaling $35 million from various Russian banks, said Yury Shablov, Dvorets Sporta's marketing director.

Shablov said that a part of the capital needed to complete the stadium has come from the sale of 72 private spectator boxes. He said that 66 of the boxes have been sold to banks and other businesses for $330,000 each, while six deluxe boxes, equipped with saunas from which owners can view events, have been sold for $440,000. Shablov refused to name which banks and companies because, he said, he "doesn't want them to have problems with their taxes."

Shablov said that finding the money to finish the project is not a problem. "We will receive as much money as we need from the banks," he said, declining to name which banks.

"If the banks gave us $35 million already, they will give us the rest of the money we need," said Valentin Litviakov, an official with City Hall's Road Committee, which is overseeing the project. "The banks want their money back and understand that if they don't give us any more, they won't get anything back."

Opponents of the project, like former city Finance Committee chairman Igor Artyemev, say Yakovlev has no clear idea of how the city administration is going to pay back the money it received from the banks to build the stadium.

Artyemev, who left Yakovlev's government earlier this year after accusing the governor of corruption and is now the local head of the political party Yabloko, said "Yakovlev is building a memorial to himself."

City Hall is struggling with one potential solution to the financing dilemma - convincing a brewer or other sponsor to buy the stadium's name.

Facetiously dubbed "Yakovlev's Palace" by the local media for the city's failure so far to find a corporate sponsor to pay for the right to name the stadium, the city originally hoped to receive $15 million for the title, but there were no takers. More recently that figure dropped to $8 million, but still no takers were to be found.

Now, according to Alexander Yevstrakhin, the city official responsible for overseeing construction, a buyer has been found - for $2 million.

"This price is closer to reality," Yevstrakhin said, adding that the name of the new stadium would be announced in the next few weeks.