Guiding Lines: Show for the Public

“Everything was decided in advance,” an acquaintance working for a construction firm whispered in my ear. “The whole affair is just a publicity stunt.”

In the end the session adopted some of the proposals and ordered a revision of the others. It appears that after the session the audience was supposed to rest assured that the city government has strict control of each new development or construction site in the capital.

However, at second glance a different conclusion comes to mind. It appears that city hall’s attempts to establish control over the development of commercial properties in the capital are somewhat erratic. There are numerous discrepancies between legal provisions and practice. Take, for instance, the city center where the most exciting events on the commercial real estate market are unfolding nowadays.

The main issue that has to be addressed first is the General Plan for Moscow Development till 2020. Everyone knows that the city authorities have still not launched monitoring of the General Plan within the Central Administrative Okrug [district]. For the time being the city is looking for sources of financing for those commissions.

That means that the senior officials in charge of the construction sector fail to carry out regular checks into whether the provisions of the General Plan for the Central Administrative Okrug, governing the correlation between residential and non-residential properties, are being complied with. Poor coordination between the government bodies means the city center is gradually transforming into one large commercial zone.

Office developers are most active in this area. Analysts put the supply of Class A and B offices alone at 2 million square meters, which accounts for half of the entire top class office property market in the capital.

Take the city government’s plan for the development of a tourist and recreation zone — the Golden Ring of Moscow - envisaged in the plan for the development of the city center, or a decree to the effect, No.208-PP of March 26, 2002. Those documents stipulate restrictions to the development of offices and shopping malls on and outside the Garden Ring.

Meanwhile, at least three new large-scale projects are about to emerge on the Garden Ring. They are: a retail center for the Korean firm Lotte at the intersection of Novinsky Boulevard and Novy Arbat, Citydel of the JSC Tema on Zemlyanoi Val, and a project by Sistema-Gals for the redevelopment of the landmark Peking Hotel on Bolshaya Sadovaya, where new office and retail properties are planned.

But Moscow has already seen three major malls – Novinsky Passazh, Smolensky Passazh and Sadovaya Galereya [gallery] – open on the Garden Ring! Doesn’t that run counter to the city plan? What is especially ridiculous is that many developers had never even seen the decree mentioned above.

The project to transform the city center within the Garden Ring into a historic and recreational zone is another ambitious initiative by the Moscow mayor. In Paris, for example, tourism revenues make up 50% of the municipal budget – certainly something to envy.

To boost its tourism industry, Moscow has come up with a program to build the Golden Ring zone. The project, however, will require radical measures to relieve traffic in the city center and the building of several pedestrian areas. Doing so calls for a reduction in the commercial activity there, as each new office development that emerges within the Ring attracts more and more cars into the center.

Ironically, at the same time the town-planning council continues to approve new office developments in central locations, such as the reconstruction of properties next to the GUM department store, although, that part of the city has the narrowest streets.

It is unclear why piles of “important” decrees and programs governing town-planning in Moscow are adopted? Why hold open sessions merely to remove two upper floors from some particular high-rise if most projects go ahead anyway?

Once, the authors of the Moscow-City projects dreamt of building what they hoped would become not just a commercial quarter but a zone that would attract business activity.

But by the time Moscow-City is built the entire capital will already have been transformed into one large commercial zone with a couple of pedestrian areas lost somewhere in its depths, with several architectural monuments redeveloped as bank offices, and several wilted bushes along the roads… It has become all the more obvious that the market is going its own way, while the city is heading somewhere else.