Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Massive 'Bolshoi City' Gets Green Light

VedomostiBolshoi City, on the horizon on the left beyond the Moskva-City site, would require approximately 100 businesses to relocate.
City Hall is about to begin an ambitious project that, according to experts' estimates, could cost as much as $100 billion -- construction of the so-called "Bolshoi City," located on 800 hectares northwest of the Moskva-City development.

Earlier this month, the city government issued a decree titled, "On the complex development of the area adjacent to Moskva-City," which launched the new project.

According to the plan, the entire area northwest of the Third Ring Road, between Khoroshyovskoye Shosse and Krasnopresnenskaya Naberezhnaya, will be completely redeveloped by the Bolshoi City, or Big City, company.

Bolshoi City was created last fall by Sistema-Hals, a subsidiary of AFK Sistema, specifically for the implementation of this project, several sources familiar with the development said.

It remains unclear why Sistema was picked for the job, but Deputy Mayor Iosif Ordzhonikidze has said that it was the company itself that offered to begin redeveloping this part of Moscow.

According to the source, the 800 hectares allocated for the project could be used to build an entire town. Currently, this area is occupied by dilapidated five-story blocks, a prison and industrial facilities. City Hall has been planning to clear this part of the city for development since the mid-1990s.

It is not clear what will be built on the spot, as the Moscow architectural committee will only present its plan in two months' time.

Bolshoi City will be responsible for designing the development's concept, clearing the plots, preparing all the necessary documentation and coordinating investments.

A Bolshoi City representative said that the area would have housing, offices and entertainment facilities. Local authorities are insisting that the project should be focused on creating a residential area, said Andrei Shostak, head of the Krasnopresnensky district's construction department.

A source at Bolshoi City suggested that Sistema would not only be serving as project manager, but would also be investing in some of the plots in the development.

Market watchers, however, doubted that Sistema alone would be completely up to the task.

"For a project like that, companies that have experience designing entire cities are needed," said Oleg Myshkin, director at Colliers International.

Yulia Nikulicheva, deputy general director at Jones Lang LaSalle, said that building just 10-story apartment blocks on the site could set investors back $80 billion to $100 billion.

Sergei Riabokobylko, managing director at Cushman & Wakefield Stiles & Riabokobylko, estimated the project's cost at "tens of billions of dollars."

"This will become the largest development project in Moscow," he said.

The project may potentially be interesting for both domestic and foreign investors.

Some of the companies participating in the Moskva-City development may decide to take part in Bolshoi City as well, said Sergei Polonsky, president of Mirax Group, the project developer for the Federation Towers.

But before the area is ready for redevelopment, as many as 100 businesses will have to be relocated, Polonsky said.

Among the factories located on the site are a transportation facility and a tool manufacturer.

Andrei Chernyshov, a co-owner of the Mantulin Krasnopresnensky sugar plant, also located on the site, estimated that moving his factory will cost $150 million.