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. Last Updated: 07/27/2016

City Land Ownership Debated

In the tense atmosphere surrounding the relationship between the federal and the Moscow city government, their representatives will be busy in the next few months deciding who owns buildings and land in the center of the capital.

The process, which has already provoked angry reactions from City Hall, may bring some welcome clarification to the issue of land ownership in some of the most expensive parts of the city.

In June, the federal government reactivated a process it began two years ago to affirm its jurisdiction over land and buildings of "federal significance" in the capital. The federal initiative came in the form of an additional fourth book of the Moscow General Development Plan, presented to city legislators by the state building committee, or Gosstroi, four months after City Hall passed a three-book city development plan.

The government's aim is to define, allocate and clearly mark the institutions and the land in the capital belonging to the federal authorities, said Nikolai Maslov, deputy head of Gosstroi.

The list of these properties, as presented in the Gosstroi document, comprises the buildings housing federal institutions such as the Kremlin, the White House or the State Duma as well as numerous foreign embassies.

Maslov said the land on which federal institutions are built covers 12 percent to 16 percent of the Moscow city territory and 60 percent to 70 percent of the territory inside the Garden Ring.

This land, as well as a number of plots situated in the very center, where the federal government is planning to build further, should also be clearly mar ked as the federal government's property, Maslov said.

City Hall officials are reluctant to lose control of some of the most expensive plots of land in the city and are resisting Gosstroi's initiative. Vladimir Plotnikov, head of the Moscow Duma and the Moscow city administration's joint committee on building laws, said reallocating the land "would be illegal."

"Only the land under the buildings housing the highest state organs belongs to the federation," Izvestia newspaper reported him as saying. "For anything else to be built, the permission of the Moscow government is needed, and the land should be either rented or bought. You want to own land in Moscow f you're welcome, but first pay for it."

The law defining the status of the capital says only buildings used by the "highest organs of federal power" and those used by the Prosecutor General's Office, the Central Bank and the Pension Fund, together with the plots of land they are on, are federal property.

The law stipulates that the land the federal government plans to build on can be either "acquired" or rented from the city "according to the law." How land is to be acquired is not spelled out and the federal government has been left to make its own list of what it owns.

Until now, most federal government institutions occupied land on the basis of a long-term rent agreement with a "zero coefficient," which is to say they never paid rent, said Andrei Shirokov, a member of the City Duma's building committee.

"Those rental agreements were actually illegal," Maslov said. "It is absurd to sign a rental contract for land that you are supposed to own."

Maslov said the city and federal officials have until September to make and agree upon the list of objects and plots that will become federal property. "The final list will be signed by the federal government, acquiring the status of law, in the fall," he added.

Painful as it may turn out to be for the city government, the redivision of property and land could help the real estate developers, said Gerald Gaige, a real estate consultant at Arthur Andersen. "Any clarification, anything that brings order and makes the issue of land and property ownership in Moscow more transparent will be an improvement," Gaige said. "No matter how the property and land is divided in the end, the fact that the division took place would be in itself positive."