First Phase Opens at $150M Center: City

Doors have been thrown open at the Lyublinskoye Pole trade and exhibition center, the first stage of a vast wholesale and retail center that will be built over the next three years, City Hall said.

But there’s a small hitch: Moskva, the developers of the grandiose $150 million project, say that the complex that opened Saturday has no connection to their own center, which remains in the planning stages.

The Lyublinskoye Pole complex is owned by local company Orient Market, which leased 3.5 hectares from the city to build the $600,000 first stage, said Orient Market head Vasily Balandin.

Lyublinskoye Pole will sell building materials, conduct exhibitions and offer renovation services.

The Moscow city government said the opening was a sign that its mammoth retail center on 46.4 hectares of land in the southeast Lyublino suburb of Moscow is on track.

City Hall issued a resolution in 1997 to build the project. A wholesale and retail company called Moskva was set up in 1998 to develop it.

But until Saturday little progress appeared to be taking shape on the site.

The turnabout came after Moscow signed up an investor to fund a portion of the $150 million project and attract investment for the rest, said Anatoly Kochetkov, head of City Hall’s consumer market department.

But developers said that the mammoth center is still in the planning stages.

"This firm bought a controlling stake in Moskva just two months ago," he said.

Kochetkov refused to reveal the identify of the investor.

Ownership of Moskva was initially split between Moscow and the Moscow Ball-Bearing Factory.

According to the Federal Securities Commission, 57.73 percent of Moskva’s shares belong to a firm called Ilion-Trade and 42.27 percent belong to the Moscow government. Ilion-Trade bought its stake from the Moscow Ball-Bearing Factory on Aug. 29 for 350 million rubles ($12.6 million).

However, Zarakh Ilin, general director of Moskva, said Lyublinskoye Pole is not part of the project and Ilion-Trade could not be considered a strategic investor.

"This company does not plan to invest … in this project. In order to buy the shares of the Moscow Ball-Bearing Factory they even took a loan from Interprombank," he said.

Ilion-Trade representatives on Moskva’s management team also said their firm has no plans to finance the construction of the wholesale and retail center.

The premises on which "Lyublinskoye Pole is built has been taken off the Moskva blueprints," Ilin said.

"We haven’t built a thing yet," he said. "We’re still preparing the tender conditions for attracting investors. The tender is planned for this year."