Passport magazine: Russian lifestyle
Home Archive December 2011

About Us

From the Publisher

Contact Us

Current IssueArchive
Restaurant GuideRestaurant ReviewsInternational Food BlogsWine TastingsTravelMoscow EmbassiesAirlines to RussiaMoscow AirportsCustoms and VisasResidence permitMoscow Phone DirectoryMuseums and GalleriesWi-Fi Hot Spots in MoscowClubs!Community ListingsMoscow Downtown MapMoscow Metro MapRussian LinksInternational Links
Advertise with Us
Our Readers - a profileAdvertising RatesDistribution List
Click for Moscow, Russia Forecast
Our Partners
Knights of the Vine RUSSIA

Real Estate

Has Moscow’s architectural knock-about ended?
Vladimir Kozlov

Over the last year, the situation with preserving the architectural heritage in Moscow has improved, but preservationists are still worried, while new regulations regarding restoration and renovation of historic buildings in the city centre may make projects of that kind less attractive for investors.

Unlike the city’s previous authorities, who never expressed much concern about the preservation of Moscow’s architectural heritage and were often accused by preservation activists of authorizing the destruction of prominent buildings, the team of mayor Sergei Sobyanin has made it clear that chaotic construction in the heart of the city and destruction of historic buildings is to stop.

“By 2016, the entire central section of the capital will become a protected zone, where new construction is practically not to be allowed, and the main priority in city development will be the reconstruction of old buildings,” Alexander Ziminsky, director of the elite property sales department at Penny Lane Realty, told PASSPORT.

Moscow has two types of historic buildings: those which have the status of “architectural monuments” and those located in protected historic areas. The demolition of the former category’s buildings is prohibited, while for the latter category it is technically possible—if proven that a building does not have any cultural value.

But over the last 15 years or so, quite a number of historic buildings have been torn down in the city centre, while the restoration of others has made them unrecognizable. One argument in favour of demolishing old buildings is that many are in poor condition.

According to the concept of state protection, preservation, use and popularization of the cultural heritage in 2012 to 2016, prepared by City Hall’s department for cultural heritage, Moscow has 3,251 buildings that are considered architectural heritage. 836 of them need renovation, and another 239 are in an urgent need of a revamp.

City authorities have said that they are planning to increase the budget for renovation works by about 40%. However, the increase does not mean that developers will be able to get lucrative projects in the heart of the city easily. Contracts for renovation or restoration of historical buildings are now likely to come with serious conditions for potential investors/developers, as the rules of the game are being changed.

One major change, according to Ziminsky, is that the mayor’s office has recently stated its intent to change the conditions under which architectural monuments can be rented out. Under the previous system, rental contracts were signed for 25 or 49 years.

“As a result, a number of companies rented a building and sat on it for a while, waiting for the prices to go up, and then sold the rental contract to someone else at a good profit,” he commented.

Under the new system, contracts are to be concluded in two stages. In the first stage, the rental period would be three to four years, during which the leaseholder would have to renovate the building. And only after that, a second stage, longerterm rental contract could be signed. “Officials suggest that funds spent on renovation works could be later compensated by a discount in rent,” Ziminsky commented.

Another major change is that under the new rules, if a building undergoes reconstruction, its total area could not be increased. “On the site of an old building, a developer will be able to erect a new one of exactly the same area,” Ziminsky said. “So, tearing down historical buildings would be simply unprofitable for developers.”

However, it is not yet clear how projects that were finalized before the new rule was issued are going to be handled. One of the most controversial recent demolitions was that of the “Kolbe building” on Bolshaya Yakimanka last May, and under the original plan, the developer intended to erect a much larger building on the site. “I wonder if the developer has revised its plans,” Natalya Samover, a coordinator of the architecture preservationist movement Arkhnadzor, told PASSPORT.

“The restoration of a building is normally 50% more expensive than the construction of a building from scratch,” Ziminsky said. “So authorities will have to come up with a bonus scheme for attracting investors.”

As the time when a developer could get a restoration contract for a building in the historic centre and basically erect a new, much larger and more contemporary building on the site, seem to be gone, involvement with historic buildings is losing attraction.

The new rules and conditions for developers are likely to make investment in historic buildings quite unattractive unless City Hall comes up with an incentive for prospective investors.

“The restoration of a building is normally 50% more expensive than the construction of a building from scratch,” Ziminsky said. “So authorities will have to come up with a bonus scheme for attracting investors.”

According to Ziminsky, City Hall could use the example of Germany where investors in renovation of historic buildings are exempt of profits tax and are entitled to substantial donations from the state budget.

Talks about privatization of architectural monuments have been around for a few years, but practical steps have been hampered by fears that new owners could convert historic building for other purposes. Most recently, however, the Moscow government has come up with an idea of public limited companies, in which the city’s share would be buildings and private investors would contribute funds for their renovation. However, the specifics of the concept are yet to be developed.

Meanwhile, architecture preservationists say they have an ambivalent impression about the situation. “One the one hand, City Hall’s rhetoric has changed drastically for the better, compared with what it was under previous mayor, Yuri Luzhkov,” said Samover. “It looks like there is a political will for protecting the architectural heritage. On the other hand, concrete steps [taken so far] are insufficient.”

She drew the example of a controversial construction project of a business centre on Khitrovskaya Ploshchad, which Mayor Sobyanin said won’t go ahead, but no documents canceling the project have been issued to date.

“The construction of 200,000 sq. metres of shopping malls has been cancelled in the city centre,” Samover said. “However, the developers have also become much more active, trying to reach a no-return point.”

According to Samover, several buildings in the city centre have been illegally demolished over the last few months by “rogue” developers who hoped that once the demolition of a building has begun, nothing can be done about it.”

“When controversy stirs, City Hall normally keeps silence,” she went on to say.

One negative signal to those who care about Moscow’s architectural heritage was the decision by the Kremlin to create a fenced-off enclave for several state agencies in Moscow’s historic city centre near Kitai-Gorod Metro station in late October.

The area hosts not only official buildings, but also a number of early 17th century and art nouveau buildings, the house of one of Russia’s most famous religious artists, Simon Ushakov, and two baroque churches, and is very close to Red Square and the Kremlin. Now a metal fence separates the area from the rest of the city.

And although no one expects that some building behind the fence could be demolished, while officials said the general public would be still able to check out the sights, the existence of the fence does little to reassure people of the authorities’ true interest in preserving the architectural heritage.

Meanwhile, preservationists hope that the general stands taken by City Hall with regards to protecting Moscow’s architecture will eventually translate into more concrete steps.

“City authorities understand that the architectural heritage needs to be protected but they are unable to take control of the situation at the moment,” Samover said. “Sobyanin is really in a difficult situation.”

“There is a need for a consultative council for the preservation of the architectural heritage under the auspices of the Mayor’s office, which would be set up by independent experts, and that would help to fight against the existing inertia,” she concluded.

 Copyright 2004-2012 +7 (495) 640 0508,,
OnLine M&A Russia Deal Book
Follow Us