Industrial Land Ripe For Redevelopment
Published: May 4, 2011 (Issue # 1654)
There are currently 48 industrial zones in St. Petersburg, covering a total of 10,500 hectares — land that is ripe for developing into mixed-use projects, according to one local real estate consultant.
St. Petersburg is a suitable place for the development of mixed-use projects, says Kyle Patching, business development director at Maris CB Richard Ellis consulting company, because industrial zones are being moved out of the city center to its outskirts, leaving dozens of industrial premises — often in prime locations — that could be turned into complexes containing both residential and commercial real estate, as well as educational centers, retail space and entertainment facilities.
Such a trend on the local development market would, however, be greatly dependent on the support of the local authorities, including the simplification of construction permit procedures, provision of favorable tax rates and sale of industrial sites at discounted prices, Patching said at a presentation of the mixed-use concept last week.
City Hall would also have to amend current legislation to simplify the procedure for reclassifying land plots and buildings from one category into another, for example, from industrial to residential, and guarantee the construction of transport infrastructure and services.
In exchange, Patching said, City Hall would see the creation of new complexes, new jobs and increased tax payments to the city budget.
The developers of such projects would in turn have to guarantee the restoration of cultural heritage sites and the creation of non-commercial and social premises where necessary, he said.
Patching, a native of Canada, drew on foreign projects as examples of successful mixed-use complexes, but added that the experience of international architects would have to be “Russified” by working with Russian partners to make it appropriate and effective on the local market.
Mixed-use projects often incorporate social programs, such as kindergartens, schools and colleges, economy-class housing and social housing for students, young families, pensioners and former residents of communal apartments.
The construction of mixed-use projects would also ease one of the city’s most pressing problems, according to Patching — its traffic jams.
“With the appearance of mixed-use complexes, there will no longer be any need to drive to work or to a store at the other end of the city, so the traffic on the city’s roads will be considerably lighter,” he said, while admitting that such initiatives require investment in infrastructure and a well thought through approach to prevent misjudgements in selecting the function of such complexes and in their adaptation.
Olesya Ruslyakova, a representative of the public-private-partnerships department of City Hall’s Committee for Investment and Strategic Projects, said at the meeting last week that the administration was in theory interested in such projects, but that the developer would have to take responsibility for managing the complexes for 10 years after their completion to ensure that construction work was carried out properly.
Mixed-use development projects on industrial sites have not had much luck so far in St. Petersburg.
Irina Anisimova, real estate development director at Sestra River Developments, the company in charge of the construction of the Petrovsky Arsenal mixed-use complex, said the project was being delayed due to difficulties in obtaining permits.
“Our main difficulty is getting approval for architectural views of our project from St. Petersburg’s chief architect,” she said.
Anisimova said the complex, to be built on the territory of an old weapons and tools factory located in the center of St. Petersburg’s resort suburb of Sestroretsk, would comprise 20 buildings that will combine both residential and commercial functions. However, the city’s chief architect has repeatedly delayed approval for the construction of a 20-story residential building to be located outside the area.
“We don’t know the exact reasons for the delay, which is dragging on for a second year now. However, it is preventing us from providing the project design documents for official state analysis and from beginning construction,” she said.
Anisimova said the company’s efforts to obtain all the permits and documents legally had already made the project’s development take much longer than they had expected, adding that the project’s investors were dissatisfied with the situation.
So far, the American investors in the project have already invested $42 million. Ultimately, the project will see $350 million in investment, she said.