| Yuri Luzhkov allowed Alexander Weinstein to build a hotel on the site of Moscow News The capital's center has been replenished with a major investment project: the fate of the building on Pushkinskaya Square, in which the editorial office of the Moscow News newspaper was located from 1956 to 2003, has finally been determined. Moscow Mayor Yuri Luzhkov yesterday signed an order for the demolition of this building, which is owned by MN-Nedvizhimost LLC, a subsidiary of Moscow News CJSC. As stated in the order of the Moscow government, MN-Real Estate, as the customer-developer, will carry out all work on the demolition, design and construction of the new building “at the expense of its own and borrowed funds.”
The MN building (its address: Tverskaya, 16/2) has long required reconstruction. Built in the century before last (the foundation has been preserved since then), it acquired its current appearance in the post-war years. Since then, it has undergone only cosmetic repairs several times. As Alexander Weinstein, the main shareholder of Moscow News CJSC, said several months ago in an interview, “the editorial office can still sit there, but the hotel cannot.” Mr. Weinstein's intention to reconstruct the building became obvious after the Moscow News newspaper changed ownership last fall and the editorial office moved out of Pushkinskaya Square. However, it appears that Mr. Weinstein was not sure how exactly he would use the new building until the last moment. Now the situation has finally become clearer: on a vacant plot of 0.19 hectares, a 4- to 5-star hotel with a total area of 14,390 square meters will be designed and built during 2004-2007. m (ground part - 10,650 sq. m). It is also planned to build an underground parking lot for 86 cars.
As an ITAR-TASS correspondent was told by the Moscow government, the construction of a hotel on Pushkinskaya Square “corresponds to world practice of constructing the most upscale and prestigious hotels on the most expensive land in the historical center of megacities.” The question of what the building's facade should be like has not yet been resolved. The appearance of Pushkin Square will now depend on the decision of the Moscow Architecture Committee, which will approve the finished project presented by Mr. Weinstein. However, the resolution of the capital's government already provides for the possibility of large-scale construction: the permitted area of the building is almost twice the current one (5686.4 sq. m).
Alexander Weinstein himself was unavailable for comment yesterday. A correspondent for the Vremya Novostei newspaper managed to contact the consulting company ABN Realty, which Mr. Weinstein hired as one of the consultants. According to the head of the department for relations with owners of ABN Realty Roman Cheptsov, the construction of such a building from scratch on Tverskaya Square will cost at least $1,500 per square meter. “But we also need to take into account that this is the very center of Moscow, a lot of utilities will have to be moved. In addition, the costs of finishing the building, its furniture, and technical equipment will be high. As a result, such a project could cost the owner $25-30 million,” he believes.
According to ABN Realty, today in Moscow the profitability of the hotel business is at the level of 12-13%. “However, in a place like Tverskaya, and if we also take into account that it is not a ready-made business that is being purchased, but the land belongs to the owner - the future owner of the hotel, the profitability of this project can be estimated at 20-25%. That is, the project will pay off in a maximum of five years,” says Mr. Cheptsov. He is confident that Alexander Weinstein will not involve transnational hotel chains in the management of the future hotel. “This project will be managed from start to finish by the current owner of Moscow News CJSC,” says Roman Cheptsov. The only exception is that a Western construction company, whose name has not yet been disclosed, will be involved in the construction of the hotel. Olga PRYANIKOVA |
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