Comment by Andrey Borodin: Here’s another proof of the fact that allegations and convictions against me and my colleagues are utter nonsense. A plot of land that was used as collateral against the loan granted by Bank of Moscow and according to Russian state prosecutors was worthless turns out to be an investor’s Klondike.
As Vedomosti learnt, in December 2016, Moscow’s Urban Planning and Land Commission approved a development project of 160 hectares of the areas located within the territory between Lobachevsky Street, Moscow to Kiev Railway, Michurinsky Avenue and the Ramenka River. An official of the Moscow City Government said over 1.3 million sq. m. of real estate assets are planned to build here. The bulk of the development project will affect a 58-hectare plot that was previously owned by Elena Baturina and became the subject matter of a number criminal proceedings involving the Bank of Moscow, said an unnamed source close to the Bank. 1,15 million square metres are to be developed there. Konstantin Timofeyev, the chairman of Moskomstroyinvest, or Moscow’s Development and Investment Commission, said that CJSC Don-Stroy will be the investor of the project.
Those 58 hectares located nearby the intersection of Michurinsky Avenue and Lobachevsky Street were owned by OOO “Territorial Directorate “Ramenskaya” (or OOO TD Ramenskaya), a company owed by Baturina. She planned to build low-rise residential houses and develop vast recreational areas on the territory of approximately 600,000 sq. m. The plans had changed, however. Back in 2009, Baturina’s company Inteko prepaid RUB 27,000,000,000 loans for which prepayment Baturina sold blue chips and a land plot in south-western Moscow for the total amount of RUR 13,000,000,000. The land was acquired by CJSC Premiere Estate, a company owned by former managers of the Bank of Moscow. The RUR 12,6 billion loan to finance the acquisition of the land plot was extended by the Bank of Moscow. The loan was secured by a pledge of the acquired plot.
In 2010, Vladimir Zhirinovsky, the leader of Russia’s Liberal Democratic Party, filed an enquiry with the Moscow Internal Affairs Directorate. Zhirinovsky alleged a misappropriation by the Moscow Government: before the bank extended the loan, it had issued shares in the total amount of RUR 15,000,000,000 that were acquired by the Mayor’s Office. That coincided with the resignation of Baturina’s husband, Moscow Mayor Luzhkov. Following Zhirinovsky’s enquiry, there was initiated a criminal case against unidentified employees of the Bank of Moscow over the theft of funds (see inset on Page 18). The parties denied the allegations and assured the deal was on the arm’s length. Later, theft charges were brought against the Bank’s President Andrey Borodin and his first deputy Dmitry Akulinin. This, in fact, forced Borodin to sell his shareholding in the bank and flee Russia.
Bankruptcy proceedings were initiated against Premiere Estate and TD Ramenskaya.
In 2012, the Bank of Moscow held an auction to sell the claims against Premiere Estate. The initial auction price was RUR 14,600,000,000, but no one agreed to buy. Two years later, during the insolvency proceedings, the creditors of CJSC Premiere Estate (with the Bank of Moscow being the principal creditor) attempted to sell TD Ramenskaya – initially, for RUR 6.2 billion and, then, for RUR 5.67 billion, but, again, no one agreed to buy the company. The Bank of Moscow retained the land plot, and now it [the land] is being dealt with by Don-Story Invest.
Moscow approved development of 930,300 sq. m. of high-rise residential buildings, 200,750 sq. m. of public and commercial real estate assets and 24,550 sq.m. of infrastructure, a Moscow Government official said. The investor shall be obligated to build two schools for 2,750 pupils and several kindergartens for 1,200 kids in total. Also, along the bank of the Ramenka River, there will be built public recreational areas. According to Moscow’s Development and Investment Commission, the area will accommodate 17,000 individuals and this will create about 5,000 new jobs.
The Moscow City Architecture Committee was instructed to provide by February 2, 2017, materials to the Prefect’s Office of the Western Administrative District for public hearings. If results of public hearings are negative, the development project will once against be considered by the Urban Planning and Land Commission.
The project has an excellent location. In fact, this is the last major land plot with such a location. Partner of Stroy Group Andrey Zakrevsky said: “Now, the project would have cost much more expensive than the price asked by Baturina. Theoretically, it could have been sold for $500 for one square metre, it’s RUR 27,5 billion, twice as much. No such big projects will be put up for sale, Zakrevsky noted.
The project has an excellent location in highly popular western Moscow, in the vicinity of Michurinsky Avenue and near park areas, said Yulia Nikulicheva, head of Strategic Consultancy Unit with JLL. “In the area in question, there exist no other sites of such size and such quality that do not require any further investments in cleanup. And a perfect balance of residential and non-residential developments is likely to have a positive impact upon the rate of return of the project.” According to Nikulicheva, investments can amount to 63 to 70 billion Roubles. Marina Gordeyeva, Head of Strategic Consultancy at CBRE, assessed potential investments as 70 to 80 billion Roubles depending on the concept, class and positioning of the project Nikulicheva is confident that a business class development would be more appropriate in this case. The sale price of one square metre will not be less, Zakrevsky stated. As a rule, such projects are implemented on a step-by-step basis and the project implementation period is no less than ten years, Gordeyeva noted.
Experts polled by Vedomosti noted the improving transport accessibility of the area. The authorities are doing a lot. New metro stations (Michurinsky Avenue, Ramenki, Lomonosovsky Avenue) are under construction, the plan of the Southern Relief Road of Kutuzovsky Avenue is being prepared, new ground transport lines are expected to be launched, the website of Moscow’s Development and Investment Commission says. In view of the project implementation period, the load on the transportation infrastructure will be increased on a step-by-step basis, Gordeyeva concluded.
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