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. Last Updated: 07/27/2016

Mayor Energizes Moskva-City

An order to consolidate many of City Hall's offices in the giant Moskva-City business center has given the development a shot in the arm, the center's promoters said last week.

They predict that much of the project will be built by the middle of the decade.

Moscow Mayor Yury Luzhkov signed an order Feb. 8 for thousands of the city's bureaucrats to quit their Soviet-era buildings in the center for modern, high-tech premises scheduled to open by the end of 2004.

"This order will not just affect Moscow city government staff, but is a key to creating a second city center for Moscow," Deputy Mayor Iosif Ordzhonikidze said Wednesday at a news conference.

The shift to Moskva-City, which straddles the Moscow River behind the Ukraine hotel, will attract investment to the project from all over the world, Ordzhonikidze said.

City Hall plans to pay for the construction by leasing out the premises it will vacate for the move. No information was given on how this will be done.

Bill Lane, managing director of Noble Gibbons/CB Richard Ellis, agreed the city's order would do a lot to promote the Moskva-City project. When the development moves beyond the existing tower that opened last year and the retail bridge, it will spark further activity and attract attention to the site, he added.

"It makes sense to bring all of them under one roof and allow them to better run the city. They'll move into a new, much more efficient office building," Lane said.

The vacated buildings will need to be examined closely in order to determine how best to generate revenue from them, Lane said, adding that he did not expect that the empty office space would have much effect on the capital's real estate market.

The total cost of the Moskva-City development is $10 billion to $11 billion, but only $108 million has been invested in the project in the last three years, promoters said.

Much of the infrastructure for the development has been installed and the development of metro stations for the site is well advanced, the promoters said Wednesday. The site is next to the future Third Ring Road and is eventually to be linked by rail to Sheremetyevo Airport via Leningradsky Station.

The project includes a huge shopping center, a public square capable of holding 1 million people, apartments, hotels and an aqua park, all of which will largely be funded with planned commercial investment.

The promoters said investment packages would run at least five years and investors would be paid with completed space in the development. The Moscow city government guarantees all investments.

Foreign investors can buy land in the development, said Ordzhonikidze, who is Moscow city government's point man for the project. "Foreign investors will enjoy the same rights as local investors, and there won't be any discrimination," he added.

Konstantine Kouzine, a real estate lawyer with Linklaters, said that it has been one of Moskva-City's strengths that it is possible to buy land in the project, although no land sales have been made. However, the passing of the Land Code last year removed that advantage, he said.

Once the project is completed, Ordzhonikidze said evening events would keep Moskva-City from emptying after dark.

Asked about plans for an Alla Pugachyova entertainment center that Interfax reported Feb. 12, Ordzhonikidze said he would welcome such a project. He said he had not had time to study the proposal for an entertainment center but that Pugachyova, Russia's evergreen pop siren, reportedly has found a U.S. investor for the project.

A series of skyscrapers planned for the site would be come in "a second stage of the project," Ordzhonikidze said. Land is expensive and skyscrapers are an economical way of housing many workers, he added.

In response to a question asking whether skyscrapers are appropriate after the Sep. 11 attacks, Ordzhonikidze said terrorism must be tackled, rather than tall structures abandoned.

The central part of the development will be decided by an architectural competition, the guidelines and terms of which will be announced April 1, he said.

German architect Meinhard von Gerkan's model of a conference center inside a huge glass-covered dome featured largely at the Wednesday news conference.

Ordzhonikidze said international submissions would help to draw attention and investors to the project.

"We have to invite the best architects in the world," he said.

He said local architects also had a lot to contribute and could collaborate with foreign architects.