City Creates Company to Consolidate Land Buys

City Hall has established a company to purchase Moscow land that is under development, officials said Monday, and its first project will be on a plot recently sold by Inteko to pay down debt.

The company, Moszemsintez, will start out working as a land bank: It will receive land that City Hall seizes or purchases from developers that are not able to finish their projects, a developer familiar with the situation said.

"When there are many land owners, everyone wants things his own way, and it's impossible to talk about integrated land-use planning," said Deputy Mayor Vladimir Silkin. "Therefore, we had the idea to create a commercial structure that would acquire land, work out a planning project and deal with the integrated developments."

Moszemsintez does not have any assets yet, Silkin said, but the city plans to hand over its shares in Stroitelnosberegatelnaya Kassa, a firm owned by the city that has a 73-hectare plot for 530,000 square meters of apartments in southwest Moscow.

Moszemsintez is preparing to increase its equity from its initial charter capital of 395,000 rubles ($12,500). The company is planning an additional share sale that will be "several times larger" than the 1.5 billion rubles being discussed on the market, Silkin said.

The company already has its first project lined up. Moszemsintez will become a client and a coordinator for the development of 58 hectares in the Moscow region city of Ramenskoye. Inteko -- the developer controlled by Yelena Baturina -- recently sold the plot to an unidentified buyer for more than 10 billion rubles.

The new owner hired Moszemsintez for the project, said a source close to the company who would not identify the owner.