ST. PETERSBURG --The World Bank is to provide a $100 million loan to help finance a major overhaul of St. Petersburg's historic center, as part of a concerted effort to channel public and private funds into restoring and preserving the historic landmark.


"This city was erected on a profound vision as the cultural capital of Russia and an international crossroads," said Michael Carter, head of the bank's Moscow office, addressing participants at a two-day conference aimed at mobilizing potential investors and project organizers. "Unfortunately, the city will not recognize its potential unless immediate steps are taken to preserve its heritage. Architectural monuments of world significance are in serious danger."


Plans presented by city officials envision a complete face-lift for three major parts of the city center -- Sennaya Ploshchad, the Moskovsky train station area, and the area between Nevsky Prospekt and Vladimirskaya Ploshchad. City and World Bank officials hope to complete these main projects in time for the city's 300th anniversary in 2003. Such a large-scale renovation could also boost the city's chances of winning the bid to host the 2004 Olympic Summer Games.


Seminar participants included local banks and real estate developers as well as representatives from international organizations such as the European Union, the European Bank for Reconstruction and Development, the U.S. Agency for International Development and the British Know-How Fund.


Carter said the World Bank estimates its own contribution to the project at $100 million, with an additional $100 million needed from other sources to complete the full range of projects. Some of the cost could be recouped over time through property taxes, new charges to direct beneficiaries of the renovation, and fees on services introduced or improved through the reconstruction, such as garbage collection.


"If we modernize these services, then we can expect to begin collecting money from them," said Vladimir Zhelyustov, director of the city construction department.


The problems facing St. Petersburg go far beyond the need to freshen up the buildings' ornate facades. According to city estimates, 3,000 buildings in the center need serious structural reconstruction. Half of the living quarters housing 800,000 people require renovation, with 10 percent of the housing in need of emergency repairs. Infrastructure, including transportation, heating, electricity and phone service, also demands serious attention.


"This is a unique project for the bank in Russia, mainly because of the element of historic preservation," Carter said. "We also hope to help improve the local housing conditions."


The main challenge is to encourage private investors to pour funds into projects that will have only a minimal return. Carter estimated that only 3 to 5 percent of the reconstruction work on historic buildings would be profitable for private investors. Some of the initial investment could be offset by long-term gains. "In the long term, the city has the potential of raising a large amount of investment, both through institutions and the private sector," he said.