There are many risks: St. Petersburg is far behind Moscow in the implementation of CRT projects
Photo by: Sergey Ermokhin / “DP”
KRT projects, difficulties in working with the old fund and approval of projects by the Urban Planning Commission were discussed at a special construction session within the framework of the Legal Conference “DP”.
Integrated territorial development projects (CTD) are being implemented almost throughout the country, but not in St. Petersburg. Our city still does not have the necessary legislative framework, as well as super-interest on the part of the authorities. At the same time, many companies operating in St. Petersburg are already engaged in CRT in other regions, which means they understand the nuances of such projects and, in theory, could apply their knowledge and experience in the Northern capital.
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For example, the Etalon Group at the end of last year acquired a site in Moscow for a new project, the territory of which falls within the KRT zone, and recently entered into the KRT partner project in Rostov.
“The integrated development mechanism is used to attract investment. In Moscow and the regions there is a dialogue with business on the topic of CRT, and we see that there is a balance between the interests of developers and the authorities. Moscow is the undisputed leader of CRT projects, such projects are gaining momentum in the capital, including including for non-residential development – Moscow is trying to renovate industrial zones and creates conditions for developers to enter them. There are no such projects in St. Petersburg. The reason is often cited as an insufficient legislative framework, but, in my opinion, the fact is that in St. Petersburg there is no leader for this. process,” said Karina Monakhova, director of the legal department for investment support of the Etalon group. She believes that the situation is unlikely to change in the near future.
At the same time, in July last year, St. Petersburg signed an agreement with the Ministry of Construction to increase urban planning potential, including through the CRT.
“Sooner or later, this tool will be introduced, it has a good goal, it allows you to develop obsolete residential areas, gray belt, etc. There is no point in solving the problems of these territories in a targeted manner – it is difficult and expensive, but through the CRT they can be transformed into neighborhoods with modern living environment, workplaces, etc.,” says Karina Monakhova.
“Today, in the KRT projects in St. Petersburg, I see serious risks for developers. You can work on them in cooperation with the city leadership, agreeing on many issues. But the approval of unique conditions is fraught with the fact that when the administration changes, the agreements may be revised. Since we are talking about long-term projects, such a risk is great. In Moscow, KRT projects are being implemented because everyone understands the position of the city, which gives its guarantees, ensures stability and keeps such projects under its control,” said Ivan Smirnov, managing partner of the St. Petersburg office of AB EPAM. In St. Petersburg, such agreements were reached under the Baltic Pearl project, he recalls.
“The authorities in St. Petersburg proposed the CRT for territories that they rather wanted to “freeze”, since it was extremely difficult to develop a scheme for the real and full development of the territory. For example, according to the Red Triangle,” emphasized the co-owner of Specialized Developer Atrium Stroy LLC. Alexander Svinolobov.
Overhaul, reconstruction and restoration – find the difference
Working with the old stock will soon become the only option for developers to work in the historical center, where today there are practically no land plots. When implementing such projects, companies face many difficulties, including legal ones. Depending on the status of the building and the scope of work, different mechanisms are used that require different approvals.
“It’s understandable that businesses want to “package” such projects into overhauls, so as not to obtain a building permit. As a result, today 60-70% of these projects are formalized as overhauls, and all changes in characteristics are carried out as overhauls. In the case of monuments, projects are implemented through adaptation for modern use, which requires not only time, but also tens of millions of rubles to conduct a historical and cultural examination and support the process,” noted Ivan Smirnov.
The expert believes that the historical center will soon see a wave of new projects from developers – after all, the center has enormous economic value. And city authorities should promote this development, he believes.
“The legislation in this area is very unclear; there is no clear distinction between reconstruction, major repairs, and redevelopment. As a result, working with such objects can backfire on the developer – the practice is completely different. The company may believe that it is carrying out a major renovation of the building, but in the end it turns out that it is it’s about an unauthorized construction that could eventually be demolished,” commented Karina Monakhova.
Delayed commission
The Urban Planning Commission, which began work in St. Petersburg in 2021, was created in order to streamline the process of approving projects regarding the construction of social and other infrastructure. But because of it, the implementation time of many projects has increased.
A similar structure has been operating in Moscow for a long time. “As far as I know, all projects inside the Garden Ring in Moscow are under the personal control of the mayor. Decisions are made very quickly. There are no further problems during implementation. The remaining projects are considered by the Moscow Urban Planning and Land Commission, with approximately the same speed and the result in the form of full approval This is a completely understandable, honest business scheme: the city receives an understandable object, and the business receives a guarantee that the project can be implemented, including deviations from the general parameters,” argues Ivan Smirnov. In the case of St. Petersburg, this is impossible, he is sure. We can only design within the framework of the Land Use and Development Rules, which, by the way, are expected to be revised in the near future.
Now many investment projects tied to the PZZ are on pause due to legal uncertainty. “Separately, I would like to note that there should be more meetings of the Urban Planning Commission, decisions should be made promptly. After all, every day means both lost business profits and additional risks,” noted Ivan Smirnov.
Alexander Svinolobov recalled that the timing of projects depends, among other things, on the degree of urban planning preparation of the territory. For objects that require approval of the planning project, they can be increased by the time frame for developing the PPT. “I have heard that in Moscow the processes are more dynamic, which, of course, is important for business; in St. Petersburg, the urban planning framework is more regulated. But in general, today the Urban Planning Commission is a working, well-established mechanism,” he added.
“In Moscow, everything is really resolved more quickly, plus the authorities subsequently provide support for agreed upon projects. For example, in situations with the property rights of third parties, they help negotiate, actively participate in building communication between the developer and third parties. For projects in which it is difficult to find land for social infrastructure, you can conclude a separate agreement and transfer funds to offset obligations. In St. Petersburg, there is no such possibility,” said Karina Monakhova. “In addition to the deadlines in St. Petersburg, there is a problem of the lack of clear rules of the game, they can change already in the process. tithes for facilities that are built on sites with a conditionally permitted type of use, in addition to the obligations for social infrastructure, the line of necessary facilities is also not fixed. The requirements for schools, kindergartens, and clinics are clear. But if you look at the decisions made, you can find the requirements. for physical culture and health complexes, assistance centers, youth support centers, roads, interchanges, bridges, etc. Today, all developers are socially responsible, everyone creates a comfortable living environment, but there must be clear and understandable rules so that everything can be taken into account in the economics of the project at the start”.
Add speed
“The main thing that needs to be done in St. Petersburg is to define clear rules and speed up processes; here, unfortunately, everything is very slow. At the federal and regional levels, a lot has been done in terms of reducing time frames as part of measures to support the construction industry, but a number of issues still remain has been under consideration for a very long time,” summed up Karina Monakhova.
“Of course, government and business are not enemies of each other. Each side has its own goals and objectives, but we are moving in the same direction. For example, we all like beautiful social facilities, and for developers this is also an additional opportunity to attract clients. Obviously “that we should not move too far from each other, we must periodically compare positions so that each side can realize its goals and objectives,” noted Alexander Svinolobov.
“In St. Petersburg, it would be better to use existing practices, simplify legislation, urban planning regulations, etc.,” summed up Ivan Smirnov.
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