New construction: provision of state-owned land plots

In St. Petersburg state-owned land plots may be granted to investors for the purpose of building hotels:

• at a tender;
• without holding a tender (i.e. by a targeted provision, particularly, through the procedure of land plot provision with the preliminary land allocation).

Subsequent to the results of a tender the investor is granted a land plot under his ownership or the right to conclude a land plot lease contract depending on what (a land plot or a lease right) was put up to tender.

Within the land plot provision procedure for preliminary land allocation, an investor has the opportunity to acquire a land plot without a tender, but only on a lease basis.

The acquisition of a land plot on a lease basis (either at a tender or not) allows the investor to subsequently take possession of this land plot subject to the title to the hotel building being registered in accordance with established procedures.

Within the limit of the procedures described below, the provision of an undeveloped land plot for hotel construction is also considered.

Provision of land plots or the right to conclude a land plot lease contract at a tender.

Participation in a tender.

The tender, as for state-owned land plots, is open in terms of the entry list. Both Russian and foreign companies as well as individuals may participate in tenders.

Forms of tender

The tender may be held in the form of an auction or a competition. The distinctive feature of the competition as a tender form is the fact that the state sets certain conditions (obligations) on the use of the land plot. Unlike at an auction, the winner here should not only make the highest bid, but should also undertake obligations to meet the conditions of the competition.

Law enforcement practice: Currently, according to existing practice, in St. Petersburg land plots forbuilding hotels are granted at tenders held in the form of auctions.

Land plots acquired subsequent to the results of a tender.

At a tender only those land plots are traded which are free of third party rights. This means that these land plots have fixed limits, have undergone cadastral registration and have been assigned a cadastral number in accordance with established procedures. Preparation of land plots for tenders is carried out by the appropriate state authorities.

Subsequent to the results of a tender, the investor may acquire:

• a land plot under personal possession or

• the right to conclude a land plot lease contract

Law enforcement practice: Currently, according to existing practice in St. Petersburg, land plots for building hotels can not be purchased. Only rights to conclude a land plot lease contract are traded.

Subsequent to the results of a tender, the tender winner signs a purchase-and-sale or a lease contract:

• with the appropriate local agency of the City Property Management Committee (for land plots owned by St. Petersburg and land plots with unlocated state property)
• with the appropriate Territorial department of the Federal Agency for State Property Management of St. Petersburg (for federally-owned land plots)

Following the results of a tender, the signed land plot lease contract, or the transfer of title to the land plot under the purchase-and-sale contract, are subject to state registration which is then performed by the Department of Federal Registration Service of St. Petersburg and the Leningrad region. A normative period to conclude the state registration of the lease contract or the transfer of title is 1 month.

Tender organization

Everything from the bid call for participation in a tender, the processing of bids and the attached documents, the decision making on the acknowledgement of contenders as tender participants, to the holding of the tender itself and the announcement of the results are carried out by the tender organizer.

The tender organizer, for land plots owned by St. Petersburg and land plots with unallocated state property, located within the territory of St. Petersburg, is a specialized organization affiliated to the government of St. Petersburg OJSC “The Property Fund of St. Petersburg”.

As for federally-owned land plots located within the territory of St. Petersburg, the tender organizer is the Territorial department of the Federal Agency for State Property Management of St. Petersburg.

For more detailed information on tender rules, please, refer to the official site of the OJSC “The Property Fund of St. Petersburg”.

Provision of land plots on target basis (without holding a tender)

Current legislation allows investors to acquire land plots for establishing hotel businesses on a target basis which avoids the tender. The investor himself initiates this procedure by submitting an application for providing the land plot for construction purposes to the appropriately authorized body.

In this instance a land plot is provided within the framework of the procedure with preliminary land allocation and only on a lease basis.

Law enforcement practice: in practice, the targeted provision of federally and St. Petersburg-owned land plots for hotel construction purposes is unlikely. Taking this into consideration, the procedure considered below has a practical meaning mainly in relation to land plots with unallocated state property located within the territory of St. Petersburg. Naturally, with the provision of such land plots the investor enters into cooperation with the state authorities of St. Petersburg.

The following are the principal stages for providing land plots for hotel construction on a target basis in accordance with current legislation, and the actions to be performed at every stage.

Stage 1. Lease of the land plot for executing exploratory works aimed at defining the possibility of a hotel being allocated there

First step. Applying to the public agency, the “Investment Department” (hereinafter referred to as the Investment Department)

The application for providing a land plot for construction (hereinafter referred to as the Application) with all required documents attached, is to be submitted to the office of the Investment Department. The duly submitted Application is registered at the office of the Investment Department on the day of its receipt.

Investment Department Office
Address: 190000, Russia, St. Petersburg, Nab. R. Moiki 76 / Per. Pirogova 5
Telephone (fax): (812) 312-15-43, 310-02-05 (310-02-05)

The Application form and the list of required documents are given in Appendix 1. All documents should be submitted in single copies.

Appendix 1. Form of the Application to the Investment Department and the list of required documents

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To consider the Application and to adopt an appropriate resolution the Investment Department determines the legal status of the land plot requested. With this in view, the Investment Department then sends inquiries to the following authorized bodies:

Committee for Urban Development and Architecture (about the possibility in principle to locate a hotel at the requested land plot);
Committee for the State Inspection and Protection of Historic Monuments (about the location of the land plot within the limits of the protection zones for sites of cultural heritage, or about its attribution to the category of land of historical and cultural importance);

Committee for the State Inspection and Protection of Historic Monuments;
Address: 191011, St. Petersburg, Pl. Lomonosova 1
Telephone: (812) 315-43-03

Committee for Land Resources and Land Management of St. Petersburg (about the land plot status);
Address: 191124, St. Petersburg, Suvorovski Prospect 62
Telephone (fax): (812) 740-36-39 (740-36-41)

Department of the Federal Registration Service of St. Petersburg and The Leningrad region (within two days after the receipt of the opinion letter from the Committee for Land Resources and Land Management of St. Petersburg the Investment Department then sends notification to the Urban Development Committee informing them about the necessity of obtaining information on the land plot requested from the Department of the Federal Registration Service of St. Petersburg and The Leningrad region. Having received an answer, the Committee for Urban Development transfers it to the Investment Department within a two-day period);

Department of the Federal Registration Service of St. Petersburg and The Leningrad region;
Address: 199226, St. Petersburg, Galerni Proezd 3
Telephone: (812) 324-59-28

City Property Management Committee (about the land plot status);
Address: 191060, St. Petersburg, Smolny, podyezd 6
Telephone (fax): (812) 576-77-44 (274-10-26)

District Administration of St. Petersburg at the location of the requested land plot (about the land plot status).

Within a 10 day period, the above mentioned authorized bodies send their opinion letters to the Investment Department (the Committee for Land Resources and Land Management of St. Petersburg and, within a 14 day period, to the City Property Management Committee). In actual practice, the preparation of opinions may take longer. The investor may obtain copies of the inquiries from the Investment Department to monitor the process of preparing opinions by the authorized bodies. However, the opinion letters in response to inquiries are sent to the address of the Investment Department.

Within 5 days from the date of the receipt of all the necessary opinions, the Investment Department then prepares the summary opinion which contains one of the following statements:

• further consideration of the Application;
• a return of the Application to the investor.

The application is subject to return, with the reason being explained, in the event that the opinions of the authorized bodies, received by the Investment Department as part of application processing, state that the provision of the land plot requested for hotel construction is not possible.

In actual practice, the period for processing the application, including defining the legal status of the land plot and the preparation of the summary opinion, takes approximately 1.5 to 2 months from the date of the application being registered.

The investor may receive information about the application being processed by making a telephone call to the office of the Investment Department, as well as by looking at the site of the Investment Department (using the registration number of the application).

This stage includes the preliminary decision on the possibility of the land plot being provided for construction needs. Hence, there is a the question of major significance which is that about the acceptability of the planned hotel being built on the requested land plot in accordance with

• the General plan of St. Petersburg;
• the land use and development rules of St. Petersburg and;
• The law of St. Petersburg “On the limits of the protection zones for sites of cultural heritage on the territory of St. Petersburg and land usage modes within the limits of the mentioned zones and on the St. Petersburg law “On the General plan of St. Petersburg and the limits of the protection zones for sites of cultural heritage on the territory of St. Petersburg”.

In the event that the opinions of the Committee for Urban Development and Architecture are that the allocation of the planned hotel being built with the declared parameters fails to meet the requirements of the mentioned documents, then the possibility of the hotel being located there will be denied.

If building the hotel on the requested land plot is permitted in accordance with the above mentioned documents, the investor will have to develop a site plan.

The site plan is developed on the basis of the statement of work received from the Committee for Urban Development and Architecture and, then, the raw data prepared within the statement of work is, given to the investor. The development of the site plan is carried out by a specialized organization under a commutative contract basis which is concluded with the investor within the time periods agreed on in the contract. In actual practice, on average the overall period for site plan development, coordination and approval by the Decree of St. Petersburg Government, takes from half a year to 8 months. More detailed information on the site plan preparation procedure may be seen on the following page – Reinvestment.

Second step. Applying to the Committee for Investments and Strategic Projects

If the Investment Department prepares the summary opinion on the possibility of further processing the Application, then the investor is to forward at written request to the Committee for Investments and Strategic Projects with the following documents enclosed:

1. A copy of the Application certified by the Investment Department;
2. A copy of the summary opinion certified by the Investment Department;
3. An explanatory note on the social and economic significance of the project.

Committee for Investments and Strategic Projects
Address: 191060, St. Petersburg, Smolny, Podyezd 6
Telephone (fax): (812) 576-69-88 (576-60-81)

The investor’s written request should be processed by the Committee for Investments and Strategic Projects within 15 days from the date of its receipt. If after processing the request there is a the positive result, then the Committee for Investments and Strategic Projects prepares a memorandum and forwards it to the Governor of St. Petersburg. In actual practice, the processing of the investor’s request and the preparation of the memorandum may take more time.

Third step. Decision-making on providing the land plot for executing exploratory works.

If the processing of the memorandum results in a positive decision, then an order by the Governor of St. Petersburg on providing the land plot for construction with a preliminary land allocation is issued.

The above mentioned order from the Governor of St. Petersburg is to be executed by the Construction Committee which has to prepare the draft decree of the St. Petersburg Government on providing the land plot on a lease basis for executing exploratory works. The draft decree of the St. Petersburg Government is subject to approval at a meeting at the Vice-Governor’s office.

Fourth step. Approval of the draft decree of St. Petersburg Government on providing the land plot for executing exploratory works at a meeting at the Vice-Governor’s office

The draft decree by the St. Petersburg Government prepared by the Construction Committee is subject to approval at a meeting at the office of the St. Petersburg Vice-Governor, who is responsible for resolving problems of capital construction and real estate unit reconstruction, highway engineering, urban development and architecture, as well as the land policy of St. Petersburg for capital construction purposes.

The meeting at the Vice-Governor’s office is held weekly, on Thursdays. The representatives of the following public authorities participate in the meeting:

• The Committee for Urban Development and Architecture;
• The Committee for Land Resources and Land Management of St. Petersburg;
• The City Property Management Committee;
• The District Administration of St. Petersburg;
• The Committee for the State Inspection and Protection of Historic Monuments;
• The Committee for Energy and Engineering;
• The Construction Committee.

The representatives of other authorized bodies may be invited to attend the meeting depending on the issues to be considered at the meeting that lie within the competence of those authorized bodies.

The approval of the draft decree of the St. Petersburg Government by the representatives of the authorized bodies is performed by its endorsement in a Certificate of the draft approval, which, in its turn, represents an internal document that reflects the process of any draft document being approved.

Step five. Publication of the decree by the St. Petersburg Government on the land plot being provided for the execution of exploratory works.

The decree by the St. Petersburg Government is subject to publication in official sources no later than 15 days from the date of its approval and comes into effect the next day after its official publication. The publication of the decree is provided by authorized state bodies.

In the Decree by the St. Petersburg Government, the period of the land plot lease for executing exploratory works (11 months) is indicated. The period mentioned is calculated from the date of signing the land plot lease for executing an exploratory works contract, and expires on the date of the publication of the land plot allocation act, illustrated below.

Step six. Conclusion of the land plot lease for executing an exploratory works contract

The decree by the St. Petersburg Government on the land plot provision for executing exploratory works which has entered into legal force is the basis for the conclusion of the land plot lease for executing the exploratory works contract. In practice, this contract is concluded for an 11 month period and, according to legislation, it is not subject to state registration.

To conclude the lease contract the investor should apply to the appropriate local agency of the City Property Management Committee and present necessary documents, among them:

1. The declaration of having concluded the land plot lease for exploratory works execution contract;
2. The land plot cadastral certificate (2 original copies), to be obtained from the Department of the Federal Real Estate Cadastre Agency of St. Petersburg. It is to be issued within 14 days. According to legislation, the state due is imposed for the cadastral certificate issuance, but, currently, its size is not fixed. This is the reason why, the due is not actually imposed;
3. Constituent instruments of a legal person (in practice, the set of documents, submitted earlier by the investor to the Investment Department, is forwarded by the latter to the appropriate local agency of the City Property Management Committee. This? is why the investor does not need to make a repeat submission of the documents);
4. A bank statement to confirm an operating account.

In practice, processing the documents submitted and, preparing the draft land plot lease contract as well as signing the contract are carried out within a month.

The addresses and telephone numbers of the local agencies of the City Property Management Committee (KUGI) are given in Appendix 2.

Appendix 2. Addresses and telephone numbers of the local agencies of KUGI

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Seventh step. Executing exploratory works at the land plot

The exploratory works consist of the study of the natural conditions of the land and the anthropogenic impact on the more efficient and safe utilization of the land plot territory, the preparation of data for validating the materials required for the preparation of the site plan and the city development plan for the land plot. The results of the exploratory works will define the technical feasibility for building any construction planned by the investor.

Simultaneously with the execution of the exploratory works of the land plot the investor should, within the period of the validity of the land plot lease for executing the exploratory works contract, perform the following legal actions, upon which basis the St. Petersburg Government will subsequently adopt a resolution on providing the land plot for the hotel design and construction.

Preparation and approval of the set of engineering and urban development documents

The engineering and urban development documents are to be prepared as follows:

— The licensing letter from the Committee for Urban Development and Architecture which contains the principal approval for the hotel being located on the land plot provided in accordance with the urban development documents on St. Petersburg territory development planning and the building development document.;

— The opinion from the Committee for Energy and Engineering on the engineering support for the planned hotel (which includes data on the power capacity of certain resources, information about the general conditions for utility systems connection, and a dispatch list for construction (reconstruction) of engineering systems and other data);

Committee for Energy and Engineering
Address: 190000, St. Petersburg, Per. Antonenko 4
Telephone (fax): (812) 312-54-11 (570-39-01)

— Opinion of the Committee for State Inspection and Protection of Historic Monuments;

Committee for the State Inspection and Protection of Historic Monuments
Address: 191011, St. Petersburg, Pl. Lomonosova 1
Telephone (fax): (812) 315-43-03

— - A sanitation and epidemiological opinion from the Federal Supervision Agency for Consumer Protection and Human Welfare.

Department of the Federal Supervision Agency for Consumer Protection and Human Welfare
Address: 194021, St. Petersburg, Liteyny pr. 39
Telephone (fax): (812) 719-84-40

Obtaining of the approved project for the land plot boundaries from the Committee for Urban Development and Architecture.

Involvement of an appraiser for processing the report on the market value of the land plot.

A distinctive feature in providing a land plot for building a hotel is the possibility of reducing the land plot lease fee to the amount of its investment value at the decision of the St. Petersburg Government. Unlike the market value, which is formed according to the principle of the most effective exploitation of the land plot, the investment value is estimated according to the principle of the specified functional purpose of the land plot, in this case of a hotel being build there.

To ensure the appraiser’s evaluation of land plot value (market / investment) is correct, the investor should first obtain a statement of work from the City Property Management Committee (Department of Economic and Investment Policy), on the basis of which the evaluation will be carried out, and forward it to the appraiser. The statement of work is developed on the basis of a request from the Committee for Investments and Strategic Projects addressed to the City Property Management Committee.

The preparation of the report on the land plot value is carried out on the basis of the commutative contract set up with the appraiser within the time periods stated in the contract. After the report has been prepared by the appraiser, by virtue of the contract concluded with the investor, the application must be sent to the State Department of Inventory and Evaluation of Real Estate (hereinafter referred to as GUP GUION) for their developing an opinion on the valuation report.

GUP GUION of St. Petersburg
Address: 191011, St. Petersburg, Ul. Zodchego Rossi 1-3, 6
Telephone (fax): (812) 710-47-90 (710-47-80)

Obtaining the approved land plot selection statement from the Committee for Urban Development and Architecture

The form of the land plot selection statement is formalized under legislation and given in Appendix 3. The preparation of the land plot selection statement is carried out by the Department of City Development within the structure of the Committee for Urban Development and Architecture by submitting an application.

 

Appendix 3. Form of the land plot selection statement

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The approved land plot selection statement is subject to publication in official sources. The statement’s publication date signifies the end of the exploratory works execution period. As the exploratory works execution period is 11 months, the land plot selection statement should be published before the expiry of that period.

Performing land use work on the land plot

To perform land use work on the land plot the investor is to apply to a district office of the Committee for Land Resources and Land Management of St. Petersburg. Land use works on a land plot include the establishment of the site boundaries of the land plot and their approval. According to the results of the land use works the boundaries of the land plot are approved under the order of the Committee for Land Resources and Land Management of St. Petersburg.

State Cadastral Registration of the land plot

For the cadastral registration of the land plot, the investor is to apply to the district office of the Committee for Land Resources and Land Management of St. Petersburg according to the real estate site’s location with a written request for the land plot cadastral registration. (application form is given in Appendix 4).

 

Appendix 4. Application form for land plot cadastral registration.

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The list of required documents to be attached to the application according to the legislation:

1. The order of the Committee for Land Resources and Land Management of St. Petersburg on the approval of the land plot boundaries;
2. The order of the Committee for Urban Development and Architecture on the approval of the land plot boundaries project;
3. The document confirming the state duty payment (currently the state duty for the execution of this legal action is not approved and imposed);
4. Power of attorney issued to the person, who represents the investor’s interests;
5. The passport of the person, who represents investor’s interests under power of attorney (to be presented when submitting the documents)

In confirmation of the acceptance of the above mentioned documents the applicant is given a copy of a registered statement, certified with a signature of the officer of the Committee for Land Resources and Land Management of St. Petersburg.

The cadastral registration period established under the current legislation is 20 working days.

As a result of the land plot cadastral registration the cadastral passport for the land plot is issued.

Stage 2. Provision of a land plot on a lease basis for hotel design and construction

Step one. Preparation of the draft decree of St. Petersburg on the provision of a land plot for hotel design and construction

After finishing the exploratory works execution on the land plot the investor should apply to the Department of Legal Acts Preparation at the Investment Department and present the set of documents prepared during the period of executing the exploratory works. This includes:

1. The set of engineering and urban development documents;
2. The outline of the land plot boundaries approved by the Committee for Urban Development and Architecture;
3. A valuation report on the market / investment value of the land plot with GUP GUION’s opinion;
4. The land plot finding statement approved by the Committee for Urban Development and Architecture;
5. The cadastral certificate for the land plot.

Within a 15 day period the Investment department then prepares an opinion on the compliance of the presented documents with the current legislative requirements and forwards the documents to the Construction Committee or returns them to the investor indicating the defects to be corrected.

Within a 5 day period the Construction Committee then examines the opinion and documents presented by the Investment Department and prepares a draft decree of the St. Petersburg Government on the provision of the land plot for the hotel design and construction.

Step two. Approval of the draft decree of the St. Petersburg Government meeting on the land plot provision for design and construction at the Vice-Governor’s office

According to St. Petersburg regional legislation, in the case where land plots are leased for design and construction purposes, the Government of St. Petersburg fixes the investment conditions to be mandatorily fulfilled by the investor. Among such investment conditions there may be the following:

1. The legal form of the real estate unit provision (in this case, the land plot is leased for construction during the period of the hotel’s construction);
2. Amount of rental payment for the land plot;
3. Obliging the investor to complete the construction of the real estate unit and to commission it within a fixed period.

The investment conditions are fixed in the decree of the St. Petersburg Government on the provision of the land plot for design and construction.

The draft decree of the St. Petersburg Government prepared by the Construction Committee, including the investment conditions of the provision of a land plot for design and construction, are subject to approval at an office meeting of the St. Petersburg Vice-Governor, who is responsible for resolving problems of capital construction and real estate units reconstruction, highway engineering, urban development and architecture as well as the land policy of St. Petersburg for capital construction purposes.

The meeting is held in the manner that was stated above with regard to the approval of the draft decree of the St. Petersburg Government on providing a land plot for executing exploratory works.

The representatives of the following public authorities participate in the meeting:

• The Committee for Urban Development and Architecture;
• The Committee for Land Resources and Land Management of St. Petersburg;
• The City Property Management Committee;
• The District Administration of St. Petersburg;
• The Committee for the State Inspection and Protection of Historic Monuments;
• The Committee for Energy and Engineering;
• The Construction Committee.

The representatives of other authorized bodies may be invited to attend the meeting depending on the issues to be considered at the meeting if they lie within the competence of these authorized bodies.

Step three. Approval of the draft decree of the St. Petersburg Government on providing the land plot for design and construction by the Legal Committee of the St. Petersburg Governor’s Administration.

The Legal Committee of the St. Petersburg Governor’s Administration (hereinafter referred to as the Legal Committee) carries out the legal examination of the draft decree of the St. Petersburg Government for its compliance with current legislative requirements and also for a linguistic examination.

The normative period for examination and approval of the draft decree from the St. Petersburg Government by the Legal Committee is 7 working days (when necessary, this period may be extended at the decision of the Head of the Legal Committee to a maximum of 25 working days).

If there are significant omissions in the draft, it becomes subject to revision and the obtaining of the Legal Committee opinion. If the draft has insignificant or no omissions it is to be approved by means of its endorsement by the Head of the Legal Committee in the Certificate of draft approval.

Step four. Examination of the draft decree of the St. Petersburg Government on the land plot provision for design and construction at the meeting of the St. Petersburg Government

In practice, the draft decree of the St. Petersburg Government on the land plot provision for design and construction, having received all the necessary approvals, is then forwarded to the Secretariat of the St. Petersburg Governor’s Administration for examination by the St. Petersburg Government. The draft is to be examined the by St. Petersburg Government at an open session. If there were no omissions found in the draft and no suggestions made, the presented draft is forwarded to the Secretariat of the Governor’s Administration to be presented for signing by the Governor.

Step five. Signing of the decree of the St. Petersburg Government on the land plot provision for design and construction by the St. Petersburg Governor

The draft decree of the St. Petersburg Government on the land plot provision for design and construction, having been examined at a meeting of the St. Petersburg Government, is then subject to signing by the St. Petersburg Governor.

The date of the issuance of the decree of the St. Petersburg Government on the land plot provision for design and construction coincide with the date of issuance of the decree of the St. Petersburg Government on the approval of the site plan.

Step six. Publication of the decree of the St. Petersburg Government on the land plot provision for design and construction.

The decree of the St. Petersburg Government on the land plot provision for design and construction enters into legal force the next day after its official publication. The decree of the St. Petersburg Government is subject to publication no later than 15 days from the date of its approval. The decree publication is provided by authorized state bodies.

Step seven. Conclusion of the land plot lease for the design and construction contract (or the land plot lease contract under investment conditions).

The decree of the St. Petersburg Government that has entered into legal force is the basis for the conclusion by the investor of a lease contract under investment conditions. To conclude such a contract the investor should apply to the appropriate district agency of the City Property Management Committee.

The contract on the land plot lease for design and construction is concluded for the period of the hotel's construction. In practice, such lease contracts are concluded from 3 to 6 years.

Registration of the land plot lease contract

Considering that the land plot lease contract on investment conditions is has been concluded for a period of more than one year, the investor, having signed the contract, is to forward the request for state registration of the land plot lease contract to the Department of the Federal Registration Service of St. Petersburg and the Leningrad region.

An approximate list of documents required for the state registration is given in the Appendix 5.

Appendix 5. An approximate list of documents required for the state registration of the land plot lease contract

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The normative period for the state registration of the land plot lease contract is 1 (one) month. In practice, the process of state registration may take longer.