A multimillion-dollar shopping and office center will replace the burnt-out facade on the southern side of Pushkin Square by late 1996, city officials said Thursday at a gala groundbreaking ceremony.


Ownership of the 25,000-square-meter center will be divided equally between the city, which is providing the land, and the Russian electronics firm Microdin, which is financing the project, said Vartkez Artsruni, who represents Mosinterstroi, a city-owned company formed for the project. He said the project would cost between $25 million and $35 million.


Behind the pre-revolutionary facade at 16/2 Tverskaya, Russian and Turkish workers will construct a six-story building of offices and boutiques featuring a glass atrium, glass escalators and three floors of underground parking, officials said. A second building of luxury apartments is scheduled to follow.


The charred facade, draped with green netting, has marred one of the city's most prestigious corners and obstructed sidewalks for several years since a fire gutted the building, which housed a theater organization.


In an interview after the ceremony, where he glowered at a model of the planned building after learning that not all sections would be air-conditioned, Mayor Yury Luzhkov said he was glad to see construction begin because the site had stood idle for four years.


Artsruni attributed the delay in part to difficulties finding an investor. He said the city had originally sought a foreign investor but failed, mainly because foreign investors "always want more certainty, and a better legislative base."


Western developers have said they are particularly wary of projects in Moscow, where the city government retains tight control over property and often pegs many conditions to development deals. At least one deal with a Swiss investor fell through because of "misunderstandings with the city," said Michael Oster, a Moscow real estate broker.


"What would bother me would be the permits to construct a building on Pushkin Square, and right above the largest metro station in Moscow," Oster said. "The city would watch you every step of the way. But here, where the city's your partner and they own half, maybe they won't watch so much."


Microdin's president, Alexander Yefanov, said the electronics firm, which owns 20 stores in Moscow, beat a German firm that had proposed a less profitable, offices-only plan.


Trest-Mosstroi 6, a branch of the Moscow firm Glavmosstroi, will build the center's concrete "carcass," while the Turkish firm Alarko, which reconstructed the bombed-out White House, will fit out the inside, Artsruni said. The city insisted that Russian builders participate so as to "exchange experience" with foreigners, he said.


At the groundbreaking Thursday, city officials presented the project as an object of national and civic pride.


"We didn't need a foreign investor here," said Vladimir Resin, head of the city construction department.


Luzhkov poured the first wheelbarrow of concrete under Turkish and Russian flags and garlands of red, white and blue balloons, which startled spectators by bursting periodically with gunshot-like reports.


The celebrity television host Igor Kirilov asked the audience to imagine "a big television, a Sharp, a Sony -- or a Rubin, from the Moscow factory" that would show, on a wintry day in 1996, the opening of a sparkling new building in place of "this black hole in the city center."