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. Last Updated: 07/27/2016

City Eyes Tender to Better Hotel

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The Moscow city government has called a tender for financing reconstruction of the Moskva Hotel on Manezh Square that will make it a four- or five-star conference hotel.

The winner, who must be prepared to invest at least $250 million in the project, will receive a block of shares in the hotel from City Hall and management rights. The city owns 100 percent of the hotel and the stake the investor would acquire has not been specified.

"The tender for contracting work will be held later, in September," said Sergei Artyukhin, hotels specialist with City Hall’s international tender center.

"The competition that we are announcing now is an investment tender to provide financial support for the project. The winner will cover the costs of a stage-by-stage renovation under an approved plan and will receive a block of shares in the venture and the right to manage the hotel in exchange."

Renovation will take five years and be completed in two stages, said specialists from Mosproyekt-2, who have prepared the architectural element of the project.

Work began on the Moskva Hotel in 1935 under architect Alexei Shchusev. It was considered to be the most luxurious hotel in the capital until the World War II and the main body of the hotel has the status of an architectural monument of the Soviet period.

In the first stage the facades looking out onto Manezh Square and Okhotny Ryad will be repaired. These walls, which were built between 1935 and 1940, have deteriorated badly.

The part of the hotel behind those facades is already closed with reconstruction due to begin in winter 2001. After that is done the damaged 15 percent of the hotel facing Teatralnaya Ploshchad and Ploshchad Revolutsii will be repaired.

At the same time, the internal courtyard will be turned into an atrium with a swimming pool and a conference hall. After renovation the total area of the hotel will have been increased from 97,000 square meters to 143,5000 square meters.

The results of the investment tender will be released on Sept. 29. "This first stage will cost approximately $100 million and may be completed in less than a year," said Boris Yevseyev, deputy director of the hotel.

Neither City Hall nor the Moskva officials have revealed the potential sources of financing.

"We have two serious investors and a multitude of contractors hoping to do the work, but it would be unethical to reveal their names before the competition results are released," Yevseyev said.

International hotel chains on the local market have yet to show any interest in managing the Moskva.

Foreign chains have very little interest in new, expensive hotels due to low demand for them in the city.

"If the hotel really is to be a five-star in the European sense of this word, then the Moskva will most likely be competing with the Western chains. It would be tough for our hotel because the market is overloaded and managers have little experience of fighting for customers," said Alexander Lesnik, a tourist industry administrator.

Potential competitors preferred not to comment on the situation as it is unclear how the situation will look in five years when reconstruction of the Moskva has been completed.