09 June 2004 03:59
City Hall Axes First Auction to Build Skyscrapers
City Hall's much-hyped inaugural auction for land plots earmarked for skyscraper construction has been called
off.
Deputy Mayor Yury Roslyak told reporters late Monday that the decision was made to scrap the June 10 tender for three
lots because only one of the six companies that submitted bids could provide the "required guarantees."
"This effectively means that the auction is off," said Roslyak, who is in charge of the auction
process.
The one company that did meet all the requirements is Stroimontazh, the construction giant currently erecting the
Federation Tower skyscraper on the Moskva-City site. Names of the five developers that were barred from the auction were
kept secret.
Market watchers, however, offered a different explanation for shelving the project -- not only are the sites being
offered not attractive enough for many developers, the call for bids came just days before the deadline, making it
virtually impossible for them to participate even if they wanted to.
The contest for the right to develop three sites in northern and eastern Moscow, with starting prices ranging from
$5.2 million to $17.6 million, was meant to kickstart the city's stalled and ambitious "New Ring of
Moscow" project to build as many as 200 high-rise buildings by 2015.
When the city announced last month that it would offer these plots at auction, one of the stated goals was to attract
foreign construction companies and developers to the estimated $5 billion project.
Originally a private project conceived by the Konti development company a decade ago, City Hall took it over in 1999,
but only one single high-rise has been completed -- the 43-story Edelveis residential complex in western Moscow. Two
others, the 53-story Continental on Marshala Zhukova Prospekt and the 40-story Vertical on Leninsky Prospekt, are
currently under construction.
First Deputy Mayor Vladimir Resin, who oversees construction in the city, said five out of the six bidders for the
June 10 auction could not meet one of the basic requirements -- that they have worked in Moscow for more than three
years.
"We cannot entrust such a program to companies that lack experience, specialists and equipment," Resin
said.
Some market participants, however, said the plots on offer were simply unattractive and overpriced.
For example, one developer said that the winner of the $17.6 million plot on Proyezd Serebryakova, slated to become a
97,000-square-meter administrative and residential complex, would have to pay a significant sum to relocate scores of
garages. Another developer said that he had only heard about the auctions on May 27, just days before the May 31
deadline to submit bids.
Roslyak said new auctions with new terms would be announced Thursday. He offered few details, except to say that City
Hall may soften its demand that potential developers have 100 percent pre-approved financing for each project.
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[The Moscow Times] |
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