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. Last Updated: 07/27/2016

U.S. Consulate Keeps $6 Lease

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ST. PETERSBURG — The St. Petersburg city arbitration court has thrown out a case lodged by an arm of the city property committee, or KUGI, against the U.S. Consulate in an effort to raise the U.S. diplomatic mission's rent of $6 per year.

The court — citing the consulate's diplomatic immunity — on Wednesday said the case was out of its jurisdiction and that it would have to be forwarded to the Foreign Ministry and U.S. diplomatic authorities in Moscow for further talks, which are scheduled for March, consular officials said.

The $6 annual rent covers both the U.S. Consulate compound on Furshtatskaya Ulitsa and the residence of the U.S. consul general at 4 Grodnensky Pereulok.

The case was lodged six months ago by Inpredservice — a private wing of KUGI that provides landlord services to St. Petersburg's diplomatic missions — in an effort to raise the U.S. Consulate's current rock-bottom rent, which was negotiated in 1984 to last until 2009, said Inpredservice general director Boris Morozov in a telephone interview last Wednesday.

But roller-coaster currency fluctuations since that time have rendered the rent ridiculously low, and Morozov said his organization is losing almost $35,000 a year in rent and services to the U.S. diplomatic mission.

"We cover all the communal and repair expenses for the two buildings, and it is all out of our own expenses," said Morozov.

Daniil Petrov, deputy legal adviser of the KUGI legal department, confirmed that the city was indeed incurring a loss and had, therefore, to make up the difference from the St. Petersburg city budget.

U.S. consulate officials contacted by telephone — who all requested the customary anonymity — said they were not authorized to comment on the situation and would await the outcome of the March discussions between the Foreign Ministry and the U.S. State Department.

The Canadian and British consulates, which were also contacted for comment, would not reveal their rent figures, citing commercial secrecy.

But Morozov said that other consulates in town are not enjoying the same extreme rent breaks that the U.S. Consulate is.

The U.S. Embassy in Moscow has also had its share of property disputes.

In 1999, the United States made an offer to write off World War II-era lend-lease credits to the Soviet Union in return for full ownership of the embassy's Moscow properties.

Russia rejected the deal because under the privatization law, the transfer of state property to pay off foreign debts is illegal, Interfax reported an unidentified Foreign Ministry official as saying during the negotiations.

At the center of the discussions was Spaso House, the U.S. ambassador's residence.

In the inflation that followed the collapse of the Soviet Union, the rent for the property had dropped to as little as $13 in 1996.

The rent has been partially renegotiated since then; the U.S. Embassy has not disclosed the current figure.

On the other side of the Atlantic, in New York, Nikolai Antonov, assistant to Russian Consul General Pavel Prokofyev, said that their consulate is owned outright by the Russian Foreign Ministry.

However, the Russian government pays $3,500 a month for two-bedroom apartments for its New York diplomatic personnel.