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. Last Updated: 07/27/2016

Sakhalin Has Plans for Its Own WTC

A group of Alaskan and Russian investors are studying the feasibility of constructing a 18,600-square-meter world trade center on the oil-rich island of Sakhalin.

"Sakhalin needs a showplace for trade and investment on the island," said Dan Berkshire, president of Anchorage-based management consultancy Global Perspectives and coordinator of the trade center project.

The group plans to construct a $40 million to $50 million complex in the Far Eastern island's capital, Yuzhno-Sakhalinsk.

Sakhalin Governor Igor Farkhutdinov and Robin Richardson, former executive director of the World Trade Center Alaska in Anchorage, came up with the idea several years ago, and developers began performing due diligence on the project late last year.

Georgy Karlov, head of the region's industry and trade committee, said he is traveling to the United States in March to discuss the project with investors.

"The project is of great significance to our city and region," he said.

Sakhalin is one of Russia's top 10 regions for foreign investment, thanks to recent offshore development of oil and gas, Karlov said. Last year, investment totaled about $800 million, he added.

The planned world trade center's anchor tenants would probably be oil and gas contractors, Berkshire said. He said there is no international-standard office space available in the center of Yuzhno-Sakhalinsk. "What is there is extremely expensive, and the projected need will only continue to grow as the oil and gas projects come on line," he said.

Besides oil and gas, Berkshire said the island has the potential to develop a strong commercial fishing industry. It could also attract some tourism and increase its timber and coal exports.

There is already a lot of development on the island, and there likely will be a shortage of qualified construction workers and materials, he said. But existing class A space is either owner-occupied or totally leased, he added.

Darrell Stanaford, senior director of corporate and industrial services at Noble Gibbons/CB Richard Ellis, agreed the planned center could work well on Sakhalin. "With an appropriate mix of residential, hotel, office and retail space, it could be successful," he said.

The Sakhalin project would be the fourth world trade center in Russia after Moscow, St. Petersburg and Novosibirsk, said Marina Gromova, spokeswoman for the Moscow WTC. Irkutsk has a similar trade center, but it is not a member of the global World Trade Centers Association.

Lawrence Peek, an Anchorage architect with experience on Sakhalin, developed the trade center's plan.

The plan calls for a nine-story, horseshoe-shaped office building made of steel and tinted glass. The first floors would be retail space. Space on the top floors would be reserved for apartments. Peek's plan also allows for a private club, an exhibition center, a conference center and local government offices.

Berkshire said there would be room for the Japanese consulate to move into the trade center. South Korea is also considering setting up a representative office on the island, he said.