Every investor is certain that is the most attractive place in St. Petersburg for capital investments is the historical center of the city. No matter how you look at it, the primary reasons for this are the well-known landmarks such as the Winter Palace, the SS. Peter and Paul Fortress, the Neva River, and so on ad infinitum. It is these lovely sites and monuments that attract an immense number of people to the center, and who then become clients of commercial real estate establishments such as department stores, offices, restaurants, casinos, and many others.

To buy an apartment near the Emperor’s former residence is considered particularly prestigious. But once he has been hooked by the attractiveness of the landmarks, far from every investor understands the can of worms that he is opening, and the obstacles that he will have to overcome. The reason for these inconveniences lies in the landmarks that have a special status, that of preserved government monuments in various value categories. In addition, they are located in the center of so-called ‘guarded zones,’ and the law places certain limits on the transformation of these sites and zones. Some of these laws have been in effect since Soviet times, and are not in step with the reality of a market economy. It is difficult enough to unravel the legal tangle, but to understand the logic is completely out of the question.
In an attempt to formulate an open policy on the historical center, the municipal government of St. Petersburg, on the initiative of the Government Commission for the Control, Utilization, and Safeguarding of Monuments (KGIOP in Russian), has passed several decrees that establish understandable rules in this sector. But it seems that there is still a long way to go to reach a complete mutual understanding among all the participants of the investment process.

Zone Laws
The newest document is the amended guarded zones in St. Petersburg that make up part of the new General Plan. This important law was passed in its fist draft version by the Municipal Legislative Council. In actuality, it will take effect only after the rules for the construction of each district within the guarded zones have been approved. Vera Dementyeva, Chair of the KGIOP, explained that the necessity for amending the guarded zones was caused by the fact that up until this time, a single unified protected zone policy (OOZ in Russian), approved and adopted by the Executive Committee of the Lensoviet (St. Petersburg municipal council), had been in force in St. Petersburg since 1988. In very broad terms, it stated that no new structures could be built on the grounds of historical districts, from the Primorskoye Shosse and the Vyborgskaya Embankment on the north, to the right bank of the Neva River in the east, and the Otvodny Canal in the south, including the island between the Bolshaya Neva and the Bolshaya
Nevskaya, a total of 3,000 hectares.
This Soviet-era document did not differentiate between the central embankment of the Neva and the industrial zone on the edge of Vassilievski Island. The only exception was for lakuns, land in poor condition or with uncompleted buildings, where construction was permitted. In other words, in 1988, the government, the sole owner of real estate, and simultaneously the only builder-contractor, decided not to allow itself on that land, a feat it performed quite successfully.
Zones with regulated construction appeared around OOZs, but regulations for height, façade width, construction materials, etc., were not specified. The government had no complaints against itself over this. The positive effect of these strict requirements became apparent during the time of the increased construction of panel buildings and of complete remodeling. At least, no barbaric destruction of historical monuments, like the one in Moscow, did not take place in St. Petersburg.
The situation is radically different today: the municipality is interested in attracting investments for the development of historical locations in the city. But no sooner does a private investor find an empty lot in the center that he hears, “You can’t build there. That is an OOZ. So is that. And over there as well.”
The federal law entitled ‘On the sites of the cultural legacy of the people of the Russian Federation’ categorically prohibits new construction on the grounds of protected zones. As a result, for its 300th anniversary, St. Petersburg found itself facing a dead end in construction in the center of the city, which caused builders and developers to use every means, fair and otherwise, to get land that they had their eye on reclassified as lakuna.

A Patron in a High Place
There is another side to the coin. Boris Nikolashchenko, head of the First Studio of the General Planning Institute, explained that the 1988 OOZ project was adopted because Leningrad had petitioned to have its historical center included in the UNESCO World Heritage List. The inclusion was granted in 1990, and the OOZ policy became a particular means of protecting the historical center. But the borders of the site protected by UNESCO were not defined, and the highly-placed international patronage in fact existed only on paper. Then the UNESCO experts decided to check how various countries and cities were protecting the heritage on the list, and insistently recommended that St. Petersburg specify what exactly it is guarding and protecting.
Also of importance is the fact that the Land Code of the Russian Federation prohibits the privatization of land on which stand sites and monuments included in the UNESCO list.
One fact is obvious: the previous amount of OOZ land must be reduced, but this must be done intelligently, so as not to lose any item valuable to the image of the city, while simultaneously creating conditions facilitating the development of the historical center.
At the request of KGIOP, the studio headed by Nicholas Nikitin made the necessary corrections in the OOZs.

Forbidden Moves
Naturally enough, in the process of making corrections, the strictest bans impacted the most valuable land in the center. The planners included land that corresponds to the borders of the principal architectural groupings in the center of St. Petersburg include in the UNESCO World Heritage List. In general terms, this was the central area surrounding the Neva, including the Universitetskaya Embankment, the SS. Peter and Paul Fortress, the Admiralty District as far as the Moika, plus some separate ensembles of the Smolenski Monastery, the Alexandro-Nevskaya Lavra, the Yelagin Island, and the Tauride Palace.
The OOZ policy applies to these lands, which means that the ban on new construction set forth in the federal law is in effect.
The laws of the Russian Federation and the requirements of UNECO state that it is possible to reestablish historical sites, a term that has yet to be clearly defined by the federal authorities.
Demolishing a historic building is prohibited without a historical, cultural and technical expertise. Compared with the former OOZ, the banned territory has decreased by three-fourths.
It is obvious that some exceptions will have to be made according to certain stipulations. The St. Petersburg authorities anticipate a lot of construction on Novaya Gollandiya (new Holland) Island, which is part of the new protected zone. Novaya Gollandiya is famed for its XVIII-century red-brick architecture, its advanced state of disrepair, and its covertness: it was occupied by the military until 2005. In addition, 16 historical buildings have the status of federal monuments. A lakuna was declared on the island as far back as 1988, which houses Soviet era structures of the Krylov Central Scientific and Experimental Institute. That is the exact location where construction is due to take place. The historical buildings will be scientifically restored, with some reconstruction taking place. The height of the new buildings is not to exceed that of the old grouping, in accordance with the height regulations of the St. Petersburg area.
The other exception is an investment project for a building to house the reserve of the Ethnographic Museum on a lot currently filled with garbage, next to the Mikhailovsky Garden. As compensation for its contribution to the museum, Corporation C, the initiator of the project, is attempting to secure the right to build exclusive housing units on this land. The project was already selected during an inspection and competition, but there are no legal grounds for the planned construction at this time. Vassili Sopromadze, the [president? Chairman? Director? Head?] of the corporation is ready to accept any working conditions, whether as a lakuna or reconstruction of a historical site, that the Ministry of Culture and the municipal administration will formulate.
Neither is the concept for the reconstruction project of the grounds of the Bolshoi Gostiny Dvor department store clear. Located in a protected zone in the very heart of the city, it is a federal [architectural] monument. Nikita Yaveyn, Director of Studio-44 Planning Bureau, which planned the project, explained that for the time being, the work is purely theoretical, an attempt to establish whether it is possible to accommodate both the wishes of the management of the department store and the requirements of the law. The Board of Directors of Bolshoi Gostiny Dvor would like build a two-level parking facility in the yard, a leisure zone, and a large retail space. The inner ring of buildings, which now stands unused will also be utilized as a sales space.

Reconstruction of the District
It is incorrect to assume that the ban now extends solely to the nucleus of the historical center: it is also applicable to the adjoining territory, the so-called buffer zone, which is to serve as a background for the principal ensembles of St. Petersburg, but in different ways, depending on the structure of the districts. In places where the historical districts are practically formed, such as the central part of Vasilyevski Island, or on the Petrograd side, only rebuilding and reconstruction of individual parts can be carried out. In other zones, with incompletely formed or demolished structures, partial changes are possible.
Specific demands apply to the formation of the front of a group of buildings, which must be done according to the [брандмауэрному Brandmauer?] principle. The heights of new additions are not to exceed those of historical structures; historical facades are not to be altered during renovation, and the facades of new buildings are not to clash with their environments.
The third type of buffer zones consists of districts with structures that are not formed, such as the territory of the Moscovskaya-tovarnaya station located near the Moscow Railway Station, in which it is entirely possible to conduct both reconstructive work and new construction consistent with municipal construction documents. During the next stage of the work, various prohibitive policies will be written for each district. Whether the new rules will be simple enough for a four-year-old remains to be seen, but at least they will be clearly and sharply stated. Construction companies also believe that this approach to the creation of protected zones will make it easier to find uncompleted lots for investment projects. It should be noted that St. Petersburg has been a pioneer in the creation of new protected zones. The federal government is only now preparing to pass legislation regulating the necessary set of documents for protected zones, and of the procedure for their approval. For the time being, it is unclear whether a [visa / permission / license] from the Legislative Council is sufficient, or whether a stamp from the ministry will be required.

A Stamp for Every Site
In the center of St. Petersburg, investment projects concern not only empty lots in protected zones, but actual buildings a well. And there, investors run into another, no less complicated, tangle of problems under the general heading of ‘monuments,’ divided into federal, regional, and the so-called ‘unmasked’ [SURPRISE?] categories. The last group, which numbers approximately 20,000 [CHECK NUMBER] sites, is a particular source of woe for investors. From the psychological point of view, everyone is ready to rescue a palace, but when the talk turns to an ordinary-looking structure, investors have been known to go into shock. Most unmasked sites are row houses, of preeminently industrial architecture. Igor Tupalski, Director of OOO Building Demolition Association, explains that the biggest headaches for investors are small historical buildings that exist on the grounds of all industrial establishments being relocated out of the center of the city. Businessmen spend large sums to buy these lots for reconstruction, only to discover suddenly that some structures that they cannot demolish are standing on them. This substantially lowers the attractiveness of the project. The access of technical equipment is restricted, and the utilization of these tiny structures standing among modern buildings becomes big problem. It is possible to set a certain goal, and to obtain the removal of these unmasked structures from the protected list according to the results of a historical and cultural expertise.
For example, the St. Petersburg Property Fund was able to alter the status of a house in disrepair at Rasstannaya Street, 2A, in order to sell it. CK Vozrozhdeniye (renaissance) St. Petersburg will get rid of one of the almshouse buildings that was in the way of the construction of new residential housing. Experts also declared the ruins of the former Kalinkinskaya Hospital on Fontanka unworthy of being included in the unmasked category. But practice has shown that the process of removing the protected status is very lengthy, and does not always guarantee investors the result they desire.
“Is it really possible that all 2,000 unmasked sites are of equal importance for the city, and must be saved at all costs?” wonders Sergei Maximov, Chair of the Economics and Management Department of the INGECON Institute. Alexei Komlev, Vice-president of KGIOP, is not happy at the prospect of this single-minded approach to solving this problem:
“The law does not require that the entire unmasked site be conserved in its entirety, only those preserved parts defined by experts. It may be the façade of one building, a staircase in another, a fireplace in a third, and so on. What I don’t understand is the conclusions of experts that we run into time and time again: a monument must be destroyed solely because large amounts of money are needed to save it.”
Specialists in the realm of conservation recommend talking about razing a structure only in the case that it is proven to be a threat to people’s lives.
But the question of reconstruction may come up. For example, this is precisely what happened to the former residence of a merchant named Zmeyev who lived at Fontanka, 68. Tsentrobank was in the process of rebuilding the unmasked ruins for their office; the building in ruins was razed, but at the demand of KGIOP, Tsentrobank carefully recreated the historical façade.

The Legacy of Strategic Actions
The people at KGIOP are certain that the complete preservation of the historical center is the reason for the investment attractiveness of St. Petersburg. If the demolition of buildings is allowed, and the center of the city is turned into one gigantic construction zone, the investors themselves will find this land unattractive. The question is moot. Vladimir Golman, a Deputy of the Legislative Assembly, and Vassili Sopromadze, the head of Corporation C, often remind the St. Petersburg authorities to pay attention to the situation in Paris, which was radically transformed by Baron Haussmann, but still remained Paris.
Preserved by UNESCO, St. Petersburg has chosen its own path. The historical center has been declared the main treasure of the city, and in turn, the value of its monuments lies their authenticity. These were listed in the St. Petersburg Strategy for the Preservation of the Heritage, which, according to the municipal authorities, is slated to become a kind of document of harmony and unity between all the segments of society, a kind of specific Credo to be followed by everyone who dreams of implementing his project in the center of St. Petersburg.
It stands to reason that investors are solidly behind this strategy, but they are asking that the formalization of the rules of the game be made as transparent and as easily understandable as possible, including making public the preservation list for every building classified as a historical monument, and slated for reconstruction.
“Investors are different,” says Sergei Maximov. “Some will read and document and bail out immediately, but others who are concerned with the preservation of the treasures of St. Petersburg, will stay on.” GKIOP confirms the necessity of making the list public. But here is the bad news: the budget is not providing any funds for this task, and it can be accomplished only with the appearance of a specific investor for a specific site. And this becomes a vicious circle. And that means that the authorities and business people will have to come to an understanding.