Telegrad, a developer that is building a television complex and an art palace in St. Petersburg, is offering the city a stake in the project.
The project will cost a total of $1.5 billion and will take up 242,000 square meters, Telegrad chief operating officer Semyon Krasnov said. The company will build an art palace, a television complex and a concert hall, as well as office and hotel space on an 8-hectare plot at the intersection of Sredny Prospekt and the 24th Line on Vasilyevsky Island. All buildings are expected to be finished by 2015.
The art palace and television studio will be sold to the city after their construction, Krasnov said. Telegrad, which is part-owned by Hungarian developer Trigranit, is in talks with the city on developing this part of the project in the form of a public-private partnership.
He said Trigranit could still develop a portion independently.
Alexei Chichkanov, chairman of the city’s investment and strategic projects committee, said the committee is reviewing the economic and technical justification for the project, after which it will be clear how much the city will be able to invest in it. An investment tender for the right to develop the project as a public-private partnership could be held at the beginning of next year.
Two years ago, Trigranit reached an agreement with the city government on the construction of Telefabrika, a multifunctional complex on Sredny Prospekt. The plot was handed over for survey work last year to Telegrad. Trigranit signed a contract with Telegrad’s shareholders, agreeing to purchase shares in the developer if permission was granted to go ahead with the project. Anna Morozova, a spokeswoman for Trigranit Development Russia, refused to either confirm or deny that it plans to participate in the project with the city.
Telegrad is 51 percent owned by Solo, 12 percent of which was owned by Bank St. Petersburg from 2005 to 2006. The owner of Solo is Nikolai Lokai, who worked in Bank St. Petersburg from 2002 to 2007, the last two years of which he headed its investment directorate. Bank St. Petersburg chairman Alexander Savelyev told Vedomosti in an interview that he had been friends with St. Petersburg Governor Valentina Matviyenko for more than 20 years.
But the commercial efficiency of the project is doubtful.
“The television studio and concert hall’s net revenues are very low, and the attempt to draw the city as an investor is logical,” said Nikolai Pashkov, a director at Knight Frank St. Petersburg.
The concert hall and television studio are social objects, but if Trigranit sells them to the city in order to make up part of its construction expenses, this won’t be a pure public-private partnership, said Denis Nazarov, an international consulting manager at Grand Thornton. The main purpose of a public-private partnership is to spread risk, he said.
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