Towering above the Moscow sky-line, the statue of Soviet Cosmonaut Yuri Gagarin, the first man in space, has for years made Gagarin Square one of the city's focal points. Now the huge square, spanning Leninsky Prospekt just south of center in Oktyabrsky District, is the focal point of a controversy over a Russian-French joint venture's plan to convert Gagarin Square into a modern business center.
The highly-charged showdown, pitting democrat against fellow democrat, has become a banner of what can go wrong with privatization, and is expected to feature prominently Friday in a formal review on the status of the city's privatization drive.
According to the proposed project, CNIT-Kaluzhskaya Zastava JV would turn 60 hectares of Gagarin Square into modern office space, stores and apartments. The joint venture received the rights to build on the square in a 1990 document signed by then-Moscow City Council Chairman Gavriil Popov and other city officials. But the City Council later announced that Popov and other officials acted on their own without official approval to allocate land to the JV. An appeal was made in late February to the Moscow City Prosecutor to investigate the mayor's office for legal violations in the affair.
A March 16 ceremony to lay the first stone ended in a fiasco when hundreds of residents of the disputed territory and deputies of the Oktyabrsky District Council turned out to protest the project. Deputies sitting in the hole where the first stone was to be placed shouted down representatives of CNIT-Kaluzhkskaya Zastava and the mayor's office, forcing the ceremony to halt
Although construction has still not begun, the plan has not been canceled. Last week, chief architect and CNIT-Kaluzhskaya Zastava co-founder Yuri Platonov met with Oktyabrsky district deputies to defend the project and reassure deputies that their constituents would be treated fairly.
"No one will be forcibly relocated", Platonov said, adding that comparable living quarters or equivalent compensation would be offered to all of the residents in the area.
But Moscow City Council deputies remain adamant in their opposition to the project". The Mayor's office seems to be looking for a civil war in the city", said Raisa Slavina, deputy chairwoman of the Moscow City Council Commission on Property Control, and a former Popov supporter. "People have gone out in the streets to protest what Popov wants to do, and still they want to go on with the plan".
At the center of the controversy is a 1990 document, "Joint Agreement", which gives the Oktyabrsky Communal Property Office (CPO) the right to act on behalf of the City Council as the "owner of all land resources on the territory of the district".
The document also called for the foundation of a JV with two French construction firms, CBC and SARI. The JV was subsequently founded and the Oktyabrsky CPO rented it the 60 hectares of Gagarin square for 99 years on Dec. 21, 1990, all on the power of the "joint agreement".
But on Feb. 10 of this year, the Moscow City Council issued a statement calling the "joint agreement" groundless.
"Neither the Moscow City Council, nor its Presidium has adopted any decisions concerning the reconstruction of Gagarin square", the statement said.
On March 25, the Oktyabrsky District Council passed a resolution labeling Popov's actions "expropriation of government property and infringement of the property rights of citizens", and calling the joint agreement "invalid from the very beginning".
The statement, and a similar statement from Gagarin inhabitants, demanded that all activity on the project be halted. But the mayor's office does not intend to do so.
"Who else had the right to sign such an agreement in the name of Moscow", Popov told the newspaper Izvestia. "I did the same thing I would do with any store, bakery or pharmacy. All of this belongs to the mayor's office, and the mayor's office decides who should run it, be it a Russian, mixed or foreign enterprise".
Responded Slavina: "I can say that I'm the Pope and start distributing the Vatican's real estate, but that doesn't make it legal".
The highly-charged showdown, pitting democrat against fellow democrat, has become a banner of what can go wrong with privatization, and is expected to feature prominently Friday in a formal review on the status of the city's privatization drive.
According to the proposed project, CNIT-Kaluzhskaya Zastava JV would turn 60 hectares of Gagarin Square into modern office space, stores and apartments. The joint venture received the rights to build on the square in a 1990 document signed by then-Moscow City Council Chairman Gavriil Popov and other city officials. But the City Council later announced that Popov and other officials acted on their own without official approval to allocate land to the JV. An appeal was made in late February to the Moscow City Prosecutor to investigate the mayor's office for legal violations in the affair.
A March 16 ceremony to lay the first stone ended in a fiasco when hundreds of residents of the disputed territory and deputies of the Oktyabrsky District Council turned out to protest the project. Deputies sitting in the hole where the first stone was to be placed shouted down representatives of CNIT-Kaluzhkskaya Zastava and the mayor's office, forcing the ceremony to halt
Although construction has still not begun, the plan has not been canceled. Last week, chief architect and CNIT-Kaluzhskaya Zastava co-founder Yuri Platonov met with Oktyabrsky district deputies to defend the project and reassure deputies that their constituents would be treated fairly.
"No one will be forcibly relocated", Platonov said, adding that comparable living quarters or equivalent compensation would be offered to all of the residents in the area.
But Moscow City Council deputies remain adamant in their opposition to the project". The Mayor's office seems to be looking for a civil war in the city", said Raisa Slavina, deputy chairwoman of the Moscow City Council Commission on Property Control, and a former Popov supporter. "People have gone out in the streets to protest what Popov wants to do, and still they want to go on with the plan".
At the center of the controversy is a 1990 document, "Joint Agreement", which gives the Oktyabrsky Communal Property Office (CPO) the right to act on behalf of the City Council as the "owner of all land resources on the territory of the district".
The document also called for the foundation of a JV with two French construction firms, CBC and SARI. The JV was subsequently founded and the Oktyabrsky CPO rented it the 60 hectares of Gagarin square for 99 years on Dec. 21, 1990, all on the power of the "joint agreement".
But on Feb. 10 of this year, the Moscow City Council issued a statement calling the "joint agreement" groundless.
"Neither the Moscow City Council, nor its Presidium has adopted any decisions concerning the reconstruction of Gagarin square", the statement said.
On March 25, the Oktyabrsky District Council passed a resolution labeling Popov's actions "expropriation of government property and infringement of the property rights of citizens", and calling the joint agreement "invalid from the very beginning".
The statement, and a similar statement from Gagarin inhabitants, demanded that all activity on the project be halted. But the mayor's office does not intend to do so.
"Who else had the right to sign such an agreement in the name of Moscow", Popov told the newspaper Izvestia. "I did the same thing I would do with any store, bakery or pharmacy. All of this belongs to the mayor's office, and the mayor's office decides who should run it, be it a Russian, mixed or foreign enterprise".
Responded Slavina: "I can say that I'm the Pope and start distributing the Vatican's real estate, but that doesn't make it legal".
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