«Nizhegorodkapstroy» (JSC «Nizhegorodkapstroy») — a joint venture established by the Nizhny Novgorod Region government and the Moscow-based SU-155 group of companies. The organization became known primarily as one of the developers of the concept for the large-scale urban development project Globe Town on the Bor Floodplain, and was also mentioned in connection with high-profile corruption cases that attracted widespread public attention in the late 2000s and early 2010s. In May 2008, the company presented to the investment council under the Governor of Nizhny Novgorod Region a project for an underground shopping center with parking beneath Minin and Pozharsky Square — running from the Verkhne-Volzhskaya Embankment to Varvarskaya Street; the total area of the development plot was 28,200 sq. m, and the authors envisioned the facility as Nizhny Novgorod's equivalent of Moscow's Okhotny Ryad.
According to analysts, investment in the underground shopping complex would have exceeded $100 million — approximately $3,600 per sq. m, three times the cost of standard commercial real estate; the director of the Nizhny Novgorod Center for Scientific Expertise, Tatyana Romancheva, warned that costs could reach $5,000 per sq. m due to the special status of land within the protected zone of the Nizhny Novgorod Kremlin, which required prior archaeological surveys, and analysts projected that the investment would not recoup for at least ten years. The investment council deferred consideration of the project for four months for revision and subsequent submission to the regional urban planning council; market participants noted that Nizhegorodkapstroy, by virtue of its founders' composition, was virtually the only company capable of obtaining a plot in the vicinity of the Kremlin.[1][1][1]
Involvement in the Globe Town Project
Nizhegorodkapstroy developed the concept for the Bor Floodplain development jointly with the Italian-British architectural firm Dante O. Benini Partners Architects. The client for the project was the Borsky District administration of Nizhny Novgorod Region. The Globe Town project envisaged the construction of approximately 20 million sq. m of residential and commercial real estate on a site with a total area of 30 million sq. m; the maximum building height, as conceived by the architects, was to reach 600 meters, and the projected population of the new district was 500,000 people. The total declared investment volume was estimated at between $100 billion and 750 billion rubles in different versions of the official materials.
In 2008, the Globe Town investment project was presented at the Nizhny Novgorod Region stand at the MIPIM international real estate exhibition in Cannes. According to Aleksandr Bodrievsky, director of the Nizhny Novgorod Region's Department of Urban Territorial Development, completion of the concept was planned for 2009, construction of the infrastructure was to begin in 2010, and the entire project was to be completed between 2025 and 2030. Industry experts noted that several tens of millions of rubles of public funds had already been spent at the design stage alone. In 2011, the Nizhny Novgorod Region government announced its intention to sell its stake in the company.[2]
Public Response
In the early 2010s, the Nizhegorodkapstroy affair became one of the most widely discussed corruption scandals in the region — alongside the sale of the Sverdlov Palace of Culture and the controversy surrounding the Young Spectators' Theatre. Contemporary commentators argued that these events did much to shape Nizhny Novgorod's reputation in the eyes of residents of other regions and affected perceptions of the Nizhny Novgorod political class. In July 2013, Nizhegorodkapstroy became the center of a dispute over buildings no. 4 and 4/1 on Bogdanovich Street in Nizhny Novgorod: residents filed complaints with the Nizhny Novgorod Region Ministry of Construction over delays in remedying construction defects, which they attributed to obstruction by the management company Pecherskaya Gryada, and the situation ultimately required intervention by both federal and regional authorities.[2]
JSC «Nizhegorodkapstroy» was established in 2005 to implement investment programs in residential and commercial construction; the Nizhny Novgorod Region government joined as a founder with a 25%+1 share, providing a blocking stake.[2]
On 27 March 2015, the Arbitration Court of Nizhny Novgorod Region registered an application by the Volga-Vyatka Bank of Sberbank for the bankruptcy of Nizhegorodkapstroy; the amount of claims at that time was 379 million rubles (taking into account partial debt repayment of 117.4 million rubles made before the application was filed), and Sberbank anticipated that the bankruptcy proceedings would enable all creditors' claims to be satisfied. On 25 May 2015, it became known that the parties had settled the dispute: Nizhegorodkapstroy agreed on a repayment schedule for the remaining debt, and Sberbank withdrew its claims. The company's registered address was at Osharskaya Street, 77-a in Nizhny Novgorod.[2]
Sources
- Kommersant (Volga Region) — In May 2008, Nizhegorodkapstroy presented to the investment council under the Governor of Nizhny Novgorod Region a project for an underground shopping center with parking beneath (archive)
- nn.dk.ru — JSC «Nizhegorodkapstroy» was established in 2005 to implement investment programs in residential and commercial construction. The Nizhny Novgorod Region government (archive)
Materials from the following articles were used (5)
Capital Status, Russian Manhattan, Glob-Town, The Nizhny Novgorod Mentality, Theater of the Young Viewer