Smolny completely withdraws from the skyscraper construction project

The financial crisis helped the authorities of St. Petersburg refuse to participate in the largest and most scandalous investment project - Okhta Center, within the framework of which Smolny and Gazprom were going to build a 396-meter office complex for the gas monopoly. Yesterday, the heads of the financial committees of the government and parliament of St. Petersburg told Kommersant that budget funding for the Okhta Center project (for which the city spent 4.4 of the 29.4 billion rubles promised by 2016) will be completely stopped. The corresponding amendment to the city law “On the target program “Construction of an administrative and business center in St. Petersburg” has already been prepared - following an earlier amendment to the draft city budget, excluding expenses for the Okhta Center in 2009-2011.
Last Friday, the Legislative Assembly published for the first time the text of an amendment to the city budget for 2009-2011, introduced by Governor Valentina Matvienko on October 29, 2008. Officials and deputies then told reporters only about the temporary suspension of funding for the Okhta Center for 2009, without disclosing the content of the amendment as a whole. As it turned out, it provides for a refusal to finance the project also in 2010 and 2011. When asked by Kommersant whether this means that in the end the entire target program “Construction of an administrative and business center in St. Petersburg” will be closed (Kommersant reported about such plans on October 29, 2008), the chairman of the Smolny financial committee Eduard Batanov and the head of the budgetary and financial Committee of the city parliament Vladimir Barkanov answered in the affirmative for the first time.
“We have clearly and unambiguously outlined our position,” Mr. Batanov told Kommersant, confirming that the corresponding amendment to the law on the target program for the Okhta Center regarding its closure has already been prepared. “The amendment will be made immediately after negotiations with Gazprom regarding the procedure and timing of the ‘divorce’,” said Mr. Batanov. We are talking about Smolny’s assets in OJSC Okhta Public and Business Center (ODC), where the city must invest 29.4 billion rubles by 2016. According to the target program, by 2009 St. Petersburg should own 49% of the authorized capital of ODC, and Gazprom Neft should own 51%.
The head of the budget and financial committee, Vladimir Barkanov, predicts that an amendment to refuse funding for the Okhta Center will be included in the law on the target program this week. The deputy explains this decision by “economic measures aimed at fulfilling social obligations in conditions of the financial crisis” (such obligations, in particular, include the construction of the stadium of the Zenit football club, owned by Gazprom, which its owner refused to finance). “This is a serious reason to cut costs even on such a politically important project as the Okhta Center,” Mr. Barkanov is sure. According to him, the city can either privatize the asset it owns in the Okhta ODC, or fix its share in accordance with the 4.4 billion rubles invested in the project and not sell these shares until construction is completed, counting on an increase in their value. According to the deputy, Valentina Matvienko and the head of Gazprom Alexey Miller were supposed to discuss this issue last weekend. According to Mr. Batanov’s forecast, a legal scheme for the redistribution of assets will be developed within a month. Mr. Miller's press secretary Sergei Kupriyanov was on vacation yesterday and was unavailable for comment. Vice-President of Gazprom Neft Alexander Dybal and the press service of the Okhta ODC declined to comment.
The law on the target program for financing the construction of the administrative and business district on Okhta was adopted by the St. Petersburg parliament in March 2006, since then the name of the program and its content have undergone significant changes. Initially, the project itself was called "Gazprom City", but in the program it appeared as an "administrative and business district in the Krasnogvardeisky district", which the city authorities planned to build at the expense of the budget, planning to allocate 60 billion rubles over 10 years. At the same time, Smolny acted as the customer for the construction of future private property, and the Gazprom Neft subsidiary was listed as the “performer.” A year later, under public pressure, the authorities and Gazprom renamed the project “Okhta Center”, establishing OJSC “ODC Okhta” for its implementation and reducing the share of budget financing to 49% (29.4 billion rubles). The reference to the Krasnogvardeisky district has disappeared from the name of the target program.
Now Smolny finally refuses the scandalous “gift” to its strategic investor, which for three years has been creating problems for the city authorities with the protesting (including in the courts) public, dissatisfied with both the appearance of the 396-meter Gazprom office near the historical center of the city and and its budget financing.
Meanwhile, at the site of the future Okhta Center, you can only see a dug-up area surrounded by a fence. Vice-Governor Mikhail Oseevsky stated a month ago that of the 4.4 billion already transferred by the city to the Okhta ODC, “only a small part” has been spent. According to official data, the funds were spent on the purchase of land plots, the demolition of industrial facilities located on them, archaeological excavations and geotechnical surveys.
However, the authorities have not yet approved a procedure that would allow violating the existing height restrictions for buildings in this location. Despite the fact that the skyscraper concept was chosen at an international architectural competition, it still does not have legal status, and a project based on it has not yet been submitted for approval by the administration. And the temporary development regulations (TDR) for the Okhta Center site that passed public hearings were protested by the city prosecutor's office, demanding that the specific height of the object be included in the document. ODC "Okhta" proposed adding a height of 396 meters to the VRZ - exactly such a tower, according to one of the authors of the project, Philip Nikandrov, has already been designed by the English bureau RMJM. However, according to the chief architect of the city, Alexander Viktorov, only the 100-meter mark can be included in the VRZ, in agreement with the prosecutor's office. And even then, it is not yet known whether it will be possible to do without repeated public hearings.
Thus, the financial crisis turned out to be a very convenient reason for the administration of Valentina Matvienko to withdraw from the project that created so many problems for her. According to Kommersant sources, in Smolny, the governor’s subordinates have recently unanimously insisted on such a decision, who remained the last defender of the project - due to the obligations she assumed before Mr. Miller.
Anna Pushkarskaya

Newspaper "Kommersant St. Petersburg" No. 203/P dated November 10, 2008, p. 1

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