People in the Know: Kremlin on the Outskirts


As the Moskva City project nears completion, Mikhail Moskvin-Tarkhanov, the Moscow City Duma deputy and co-author of the landmark project, anticipates revolutionary changes on the map of the capital. He is convinced Moskva City is to become the capital’s true center of business activity.

Moskvin-Tarkhanov addresses town-planning and development issues not only in his official capacity, but also in his research and teaching work.

-Do you really think that Moscow’s town-planning authorities will soon shift their attention from the Kremlin towards other parts of the city?

Definitely. The part of the city with the best development prospects can be described as a tennis racket handle. If you adjust an imaginary racket on the Moscow map, its head covering the area within the Garden Ring while the handle is positioned over the Moskva City building site and farther on, somewhat northwards from Serebryanny Bor, you will see what part of the city I am talking about.

We decided long ago that some day we will have a city of the future. That was back in 1992 when God-knows-what was happening in this city. Dogs were roaming the streets in packs, street vendors were selling carpets, and shoes on every street corner, with drunks and gangsters everywhere… But an idea occurred to us; we needed to build Moskva City, a new international business center.

The ideology of the project was formed in stages. Finally, it became clear that the new site would become a powerful center of attraction in terms of town planning and development. We need to build a new city center for Moscow. But it is too early to call it that. That is why for the time being we’ll refer to it as MMDTs (the Russian abbreviation for the Moscow International Business Center).

It was only in 2000 that I first said openly that MMDTs was to become the new center of Moscow. A metro link to the site has already been built; by 2008 the main complex will have been completed, though, I hope, that useless Rossia tower will not be there.

-What is wrong with that project?

To begin with, it is too costly; secondly, it lacks taste; thirdly, it is risky; fourthly, it won’t sell; fifthly, it is extremely hard to maintain; sixthly, it is wrong psychologically, as only third-world countries do such things nowadays. I mean some gigantic constructions, say, a temple built in a desert, something bigger than St. Peter’s Cathedral in Rome, or, take Malaysia, with banana skins all around and a skyscraper towering above everything.

I visited Chicago, where a very good acquaintance of mine, a lawyer, lives. He is a deputy, too, in the Chicago legislature, and before that he worked as an attorney. And he says to me: ‘Do you build anything higher than 70 stories? It does not pay, even here; and, besides, you lack the skills.’

50 stories would be quite enough, he says, okay, let it be seventy, but not a hundred, no! It is just throwing money away; vanity and nothing else!... So, we have been constantly moving that tower on the map of the project and here it now stands at the very edge and the only thing left is to get rid of it altogether.

But we are about to launch the City II project, with new constructions on the sites of existing residential quarters. The houses to be built there are already on the drawing board, but there are people living in those old blocks! The investor began by assuring them that they would be given new flats in new districts, in good locations, etc. And if we move them to new districts, even if the locations are good, mass protests are inevitable.

No, those people must be provided with apartments within the City itself, let them sell them afterwards if they want. They most probably won’t stay there, but they will be happy, and they will sell those flats afterwards, for a good price, and in all matters concerning construction they will remain our allies and brothers-in-arms.

And the plan is to build new upscale residential estates there – the figures are striking, even today. Although the estimates were made two years ago; today, the prices would be much higher. What would the price of a penthouse in a high-rise with flat roofs be? Those kind of roofs could be used as helipads making it possible for the owner to fly right into his flat.

Originally, construction was estimated to be worth $15,000 per sqm. But that is nothing. In fact it’s embarrassing to even mention such figures; it will be no less than at least $40,000. But there will only be 15 apartments like that, so let Russia’s 15 most vainglorious millionaires, former Komsomol workers who have been lucky to amass enormous fortunes, live there.

-What parts of the city will be included in the “tennis racket handle area” you mentioned?

Look here. Here is the Moscow River. It flows along Kutuzovsky Prospekt towards Bolshaya Filyovskaya Street and Fili Park. Here is Moskva City. A line running from the City, perpendicular to the Moscow River towards Vagankovskoye Cemetery and along Begovaya Street is the City II area.

Now let’s cross the river and walk along its bank on the opposite side, through Silikatnyi Proyezd Street, through some dirty industrial estates, up to the Fili flood lands and Nizhny Mnevniki, along that line towards Leningradskoye Shosse. On the other side of the river is the Western river port, which will undergo redevelopment, too.

City I is a business center; City II is a multifunctional center and a residential area stretching along the river northwestwards, and then towards what is to become a motorway linking the City to the Sheremetievo II Airport. New transport lines will be built there. At the Expotsentr exhibition center the entire project borders on the Belyi Dom (the seat of the federal government), with the Garden Ring only a few steps away.

Now, let’s imagine the racket handle widening at the point where Moskva City is situated, and then narrowing and curving a bit as it stretches northeastwards, towards the future City – the Sheremetievo motorway. Fasten your seat belts: the journey will take 23 minutes. All that is the future City III zone, now called the Olympic Village.

-What measures are being taken to ensure power supply to a construction site on such a grand scale?

The City has a separate double-expansion gas station with an efficiency coefficient of 87%. A stunning machine! Admittedly, we had to fight for the project. Now it is under construction and the second phase has begun. That is an interesting project, an independent energy system. In other words, the City is also the scene of a technological breakthrough.

-Aside from Moskva City, the Moscow government is pursuing a number of other ambitious plans such as the Golden Island, the Golden Ring or the New Ring of Moscow. What do you think of those projects?

As regard the Golden Ring, there is nothing especially complicated about the plan. It is just a small ring around the Kremlin with underground parking lots, shopping centers, public amenities, etc. That project is not particularly costly.

The Golden Island, on the contrary, is a remarkable project! There is, for example, a plan to build a new small chocolate production facility on the site of the Krasny Oktyabr (Red October) confectionery factory, with a chocolate restaurant.

And if we could agree terms with the energy supplier and get a normal gas power station that would save space and at the same time offer a capacity much greater than that of the antique facilities operating there today, it would be possible to attain truly brilliant results.

The old power unit was built before the (1917) Revolution; there are only two power stations of this kind in Moscow, the second is next to the Bely Dom. Just imagine, opposite the Kremlin there is a power station with black chimneys… We could preserve those chimneys, leave all sorts of copper devices, build glazed passages inside…

I’ve seen things like that, in Birmingham: the British offer interesting design solutions for old warehouses and factories. Wouldn’t it be remarkable to have something like that opposite the Kremlin! But the site [Bolotny Island] has poor ground conditions. Then again, there is has been a special proposal by [Moscow Mayor] Yuri Luzhkov who suggested transforming the entire area around Obvodnoi Canal into retail and parking facilities.

After all, Obvodnoi Canal is not deep. It is necessary though to ensure comprehensive hydraulic insulation, but it still remains unclear how much that would cost. But the Island is a very interesting spot. The view from Sofiiskaya Embankment, where the British Embassy is situated… There is no other place in the city with a view like that.

Perhaps that is one of the best views in Europe, in the whole world; a view of the entire Kremlin before you. And, just imagine when Rossiya Hotel is pulled down…

It [the hotel] is a monstrous development, it mars the view of the Kremlin. Of course, perhaps, my personal feelings have played a role in shaping my opinion; my ancestors, the merchants Moskvins, held freeholds in that part of Moscow, our family mansion was also located here. But I am absolutely opposed to raising the issue of restitution in Russia. That is a fatal route.

-Do issues connected to the conveyance of freehold titles to land hamper the progress of projects?

We will be selling freeholds to land; after all, we have already introduced the law on land use. Moreover, we have even introduced a provision – proposed by myself – on a new scheme for the privatization of land. I came up with an absolutely new formula that has never been practiced in Russia before; the prosecutor’s office attacked me immediately for that.

We went through a series of legal proceedings, up to the Supreme Court, and after the Supreme Court’s presidium sided with us, the provision was eventually included in the law. It deals with the conveyance of rights to plots of lands to investors upon the execution of investment contracts.

What does that mean? Without any sale agreement an investment contract itself, once it is fulfilled, becomes a title deed. That provision was included in the Moscow law (Article 7), and is waiting now for its time to come. What is so great about that provision? The investor will secure the freehold to the plot of land only after he has fully honored his commitments under the contract and obtained a title to the property raised on the site.

In other words, the building will have to be commissioned first and put into operation in line with a decree from a prefecture (a district authority) or the Moscow city hall, whereupon the investor will apply to register the title to the building and the plot by submitting the investment agreement and a deed upon fulfillment.

That makes it possible to forestall attempts on the part of some officials to control the price of land. Certain federal government officials have failed to devise anything better than selling plots through open auctions with a starting price fixed by the federal authorities. Some officials even dream of keeping prices below the market level and then sell those plots off to guys who will then sell them at market prices and move to Miami.

That primitive dream is always there in their minds and is cherished by each new generation of federal officials. That is why, in order not to provoke them, we have opted for an alternative solution.

-And when was that scheme adopted?

In 2003. That is exactly what is stated in law. There is also a very significant provision – a reservation clause providing that the appraisal of land is made on the basis of market prices. But what is a market price where there is no market for land? This has to be either an appraisal based on returns or some other methods of appraisal. In Moscow it is believed there are three forms of appraisal, though, in truth, there are other methods as well.

-Has there been any precedent?

No. When we start thinking of selling land we always consider Moskva City first. Usually, the authorities opt for a simpler way, thinking the new scheme won’t work. That is why I think we should test the new scheme on a separate plot, somewhere beyond Moskva City.

I have also had another interesting provision introduced in that law. Though it was city hall that initiated it, and I joined in later. It allows joint stock companies to include their plots of land in the charter capital, though only on the basis of the law of the Moscow City Duma. That is a very special and interesting provision.

Even if you run a joint stock company where the government holds a 100% stake, the property on the land is private, because joint stock companies operate on the basis of private property. The plot belongs to the firm, not to the government, while the government only holds shares entitling it to dividends and participation in managing the firm.

The sale takes place at the moment the company is founded, not when the shares are sold to private persons. That is why, even though RAO UES (Russia’s energy monopoly) is a 100% government-owned company it has to be kept in mind that its property is not state-owned. They are state capitalist companies where the state is not the owner but the holder of all liabilities, not the property rights.

-And is ownership of land important, in your opinion?

It is important, for instance, when constructing a large complicated property such as a gigantic skyscraper, involving huge investment and with a payback period of seven years or longer. Such projects require additional guarantees. That is especially true if investment is coming from Southeast Asia, where great importance is attached to land ownership. They don’t respond willingly to tenancy or other, less rigid, rights.

U.S. and European investors are calmer and show more understanding. What of it? After all, in Britain, for example, land rights are believed to be held by the Crown while other people’s rights to it, albeit perpetual and inalienable, are disguised as liabilities and it is not always clear what they are selling. But in their everyday life they firmly believe they have private property rights over land. As regards Southeast Asia, it is quite the opposite. Take the Koreans, or investors from Singapore, they need such guarantees. For example, if we invite partners from Hong Kong and promise them a 49-year lease they won’t be very happy. They do accept such terms sometimes, but they don’t like it.

Mikhail Moskvin-Tarkhanov was born in 1953. He graduated from the Lomonosov Moscow State University and the Russian Civil Service Academy under the President of the Russian Federation. Before his election to the Moscow City Duma Moskvin-Tarkhanov worked as a chief specialist at the Institute for the Development of Moscow. He held a seat in the city legislature of the 1st /1993–1997/, 2nd /1997–2001/ and 3rd /2001-2005/ convocations. On Dec. 4, 2005 he was re-elected. Moskvin-Tarkhanov is a member of the United Russia faction, chairman of the City Duma committee for development and town-planning, and deputy chairman of the education and science commission.