LogoVAZ, a consortium led by the AvtoVAZ car maker, has won a tender to build a $120 million hotel and business complex in the center of Moscow, a city official said Tuesday.


LogoVAZ, the sole bidder, paid $6.1 million for the right to lease 1.96 hectares of land on Novy Arbat for 49 years, said Alexander Isachenko, deputy head of the Moscow Land Committee's tender department. He said that the yearly lease on the land would be another 66,000 ecus, or $55,000.


According to the contract, LogoVAZ must build a four-star hotel and business center with a total area of 110,000 square meters, 3,000 square meters of which LogoVAZ will turn over to the city housing fund, said Alexei Vorobyev, an official with the Moscow International Tender Center. He said that LogoVAZ had sweetened the deal by offering to supply the city with cars and set up a network of automotive service centers at its own expense.


Vorobyev said that numerous companies had expressed interest in the tender, but that the city's requirements had scared away all bidders except LogoVAZ. LogoVAZ officials were unavailable for comment Tuesday.


What will happen after the 49-year lease expires was not clear. Vorobyev said that under the contract "the winner has the right to buy the land pending a change in the legislation," which presently prohibits land sales in Moscow. The contract does not specify what will happen if the legislation does not change, he said.


At present the land is vacant except for remnants of an unfinished building.


Isachenko said the Moscow Land Committee will soon hold another tender for a chunk of land on Preobrazhenskaya Ploshchad in northeast Moscow for a tender. The winner will have to invest $1.8 million to build an apartment complex.