The PIK Group continues to surprise the Moscow City Hall.
Photo: TASS
The Moscow Arbitration Court has decided that the Moscow mayor's office must recalculate the payment for changing the type of permitted land use on Lobnenskaya Street, where the PIK Group, led by main shareholder Sergei Gordeev, is building the Dmitrovsky Park residential complex.
Recently, Moscow Mayor Sergei Sobyanin criticized the PIK developer for unfinished facilities. Now, after a new court decision, Sergey Gordeev's company will have to reduce the fee for changing the land use type by about a third, in line with the reduction in the site's cadastral value. This will result in the capital's budget losing over a billion rubles.
For more details, refer to The Moscow Post correspondent.
Plan to Reduce
One of PIK Group's entities purchased the development land from Algorithm Project for 1.65 billion rubles and is currently constructing a residential complex there. Before the sale, Algorithm managed to decrease the cadastral value of the land from 3.2 billion rubles to 2.1 billion rubles.
However, in November 2020, the Moscow City Hall increased the fee for land use permission. For developers wanting to build, the amount was twice as high within the old city limits and eight times higher in New Moscow.
The disputed site on Lobnenskaya Street was originally designated for the 5th Central Military Clinical Hospital, but was subsequently approved for housing construction in 2018. In December 2020, the Department of City Property (DGI) of Moscow filed a lawsuit to recover 2.1 billion rubles for changing the land use type on this section. However, the court has not yet made a decision on this case, and the proceedings were suspended in October 2022.
The DGI stated their disagreement with the court's decision on recalculating the fee for changing the land use type.
Experts believe that this court decision could lead to similar lawsuits from landowners and developers. This might force the authorities to revise the treasury funds, potentially resulting in cuts to social programs. It's worth noting that, accounting for inflation, the costs of the city's main social programs have already decreased during budget planning. Programs for "communal engineering structures development," "social support," and "health care" have been particularly affected.
PEAK is not bringing joy
Not long ago, Gordeev's company was in good favor with the Moscow mayor's office, but it has recently faced a barrage of criticism. For instance, Sobyanin stated that the capital would end its cooperation with PIK if the company continued to miss construction deadlines. This came during his visit to the Lublin Park residential complex, where the company has already handed over 200,000 square meters of housing, but the kindergarten is still not operational and the school hasn't been put into use.
In 2018, the governor of the Moscow region, Andrey Vorobyov, criticized the work of PIK-Comfort management company during a regional government meeting. The Moscow region governor commented on the lack of hot water in Elektrougli near Moscow.
“If the company sabotages the work, expel them once and for all – period,” said then the head of the region Andrey Vorobyov.
It is important to note that Gordeev used to be very influential because he was a senator and held various government positions. PIK was the main contractor for renovation projects in 2018, but received much less funding in the following year. It seems that PIK's reputation suffered due to failed projects, causing a loss of favor with the authorities.
Sergey Gordeev. Photo: skyscrapercity.com
Do not call for a housewarming party
At the same time, PIK's subsidiaries still have unfulfilled government contracts.
It is worth recalling that in December 2010, PIK-Region signed contracts with the FSB for over 1.1 billion rubles, using federal funds to allocate 231 apartments. This is not unusual for PIK-Region, as half of the 110 contracts with various departments remain unexecuted.
It is surprising that Gordeev's company was able to influence security forces, which raises concerns about the treatment of regular shareholders. The issue of unfinished apartments affected not only the FSB, but also the Ministry of Emergency Situations. In 2010, PIK-Region entered agreements with the Russian Emergency Ministry for the supply of apartments, which are still in the execution stage.
Additionally, Gazprom's TGC-1 is waiting for services from Mayak LLC, owned by PIK-Resource and PIK-Comfort.
PIK of complaints
Both the developer and ordinary citizens face challenges. Activists claimed on 360TV that the businessman seized the square in Kuntsevo and built high-rise buildings. Local residents protested without success, as the PIK guards dispersed them and detained some public figures.
The number of complaints about housing quality is increasing, with issues such as flooded apartments, malfunctioning elevators, plumbing leaks, and lack of soundproofing. Problematic objects include the residential complexes “Capital meadows”, where apartments are regularly flooded during heavy rains, and the Green Park residential complex, which was repeatedly flooded with boiling water.
It is also worth noting that at the end of 2021, PIK-Comfort reported a net loss of 814 million rubles. There is a lack of information about the company's finances this year, and Sergey Gordeev stepped down as CEO in the same year. He now focuses on corporate governance, strategic development, and new technological areas.
The situation with the fact that now the Moscow City Hall should recalculate the payment for changing the type of permitted use (VRI) of land on Lobnenskaya Street proves that PIK grabs at any straw to save money, but at the same time, such a move can finally break the once “warm” relationship with Sergei Sobyanin. After all, as a result, through the efforts of Gordeev, the capital will receive less finance to the budget, and not a single effective mayor will forgive such mistakes.
