| 9 August 2005 |

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Building giant Don-Stroi has been put on the defensive in a dispute with residents of a Moscow apartment block who say their view of the Ostankino Estate in northern Moscow would be blocked by an elite residential development. A victory for the residents, whose block on Ulitsa Akademika Korolyova overlooks the leafy 18th-century estate, in stopping the Sedmoye Nebo, or Seventh Heaven, residential development would be virtually unprecedented in the city. But the dispute is far from over and it seems unlikely the residents' vocal protests will be decisive. Instead, the fate of the 40,000-square-meter site is likely to be decided by lawyers and politicians in the coming months. In what appears to be a key ruling in the dispute, on July 12 the Moscow Arbitration Court declared land rental agreements for the building site invalid, said the City Prosecutor's Office, which brought the case. While opponents of the development do not dispute that Don-Stroi has the other permits required to go ahead with construction, the company cannot go ahead with building work unless it has a valid land rental agreement, said Yekaterina Thain, director of residential property at Knight Frank. "The rental agreement is the key. If you don't have the rental agreement, the whole construction is off," she said. At the core of the residents' argument is the status of the land being built on. They claim the site is clearly within a protected zone around the Ostankino Estate and is thus illegal. To back up their claims, they point to a land survey certificate from Moscow's Architecture and Planning Committee, dated Dec. 21, 2004, that shows the site within the protected zone. But an official at Don-Stroi's press service, who asked not to be named due to the sensitivity of the issue, said the site was "outside the protected 50-meter area around the museum." He declined to offer any supporting documentation. Valery Menshikov, a former member of Russia's Supreme Soviet who is coordinating residents' protests, said that the city government, which has shown support for the project in the past, could attempt to redraw the boundaries of the protected zone if Don-Stroi's appeal failed. He estimated residents' chances of stopping the project at 50-50. Residents said the initial plans envisaged a 40-story building, then 28 and now a staged development of between 13 and 17 stories. The building in the plans on the company's web site appear to be 11 stories high. The residents' campaign began last June when they heard about the project. Six hundred signatures were collected and Sergei Baburin, a nationalist State Duma deputy and former resident of the building, presented them to President Vladimir Putin, Menshikov said. Although courts rejected several cases brought by residents to stop the project, the complaints attracted the attention of the City Prosecutor's Office, which called a halt to work last September. Through the winter work remained at a standstill, but in early June workers suddenly cleared a number of trees from the site. Residents then took up their campaign again, holding protests outside the Ostankino television center. If the campaign were to succeed, it would be the first time residents' complaints had led to a major development project being blocked. Knight Frank's Thain said the only other example of residents managing to stop a development was a much smaller project near the President Hotel in central Moscow. In both cases, residents' protests played a vital role, she said. "Influential residents ... wrote several letters to Mayor Yury Luzhkov and they actually stopped the developer," she said. "This is very rare. Normally the developers have a few problems, but they go ahead." Residents in the building near Ostankino said two State Duma deputies who live in the block supported their campaign, but it was not immediately possible to confirm this. "Street protests attract the media, but in real terms it is more important who is involved, at which level it is going to be handled," Thain said. For the developer, the financial stakes appear to be high, as media coverage of the dispute could threaten advance sales of apartments in the development. Thain estimated that building 40,000 square meters of elite housing would cost between $25 million and $40 million. Fearing negative publicity, Don-Stroi in response has run a number of advertisements in the national press, including a full-page ad in Thursday's Kommersant listing the permits the company has obtained for construction. The ad did not mention the land rental agreement, though. The residents appear unfazed, however, and some said they would fight the development all the way. "If the law is on our side, there is every chance of us winning this case," resident Danil Konstantinov said.
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