THE DEVELOPMENT OF INDUSTRIAL TERRITORIES IN 2016

May 2, 2016, midnight

THE DEVELOPMENT OF INDUSTRIAL TERRITORIES IN 2016

 

The development of industrial territories in 2016 – what to expect from the authorities?

In the search for new economic ideas for the development of the Russian economy against a difficult external economic realities, the possibility of using only internal resources, budget constraints on the development of infrastructure projects, the government has proposed a new tool for the development of the construction sector through the introduction of a new approach to the development of former industrial areas, which at the moment are rusty and lost its investment attractiveness.
Under consideration in the State Duma the bill of the Federal law "On peculiarities of regulation of certain legal relations arising in connection with the development of the territories, and amendments to certain legislative acts of the Russian Federation" (hereinafter – the "Law") is aimed at the solution of this problem by introducing a comprehensive regulation of legal relations between the owners of objects of real estate located in the territories of abandoned industrial areas, and the state in the face of local authorities.

The law is expected to create a legal basis for the algorithm (mechanism) interaction (participation) of all the owners of the territories of industrial objects, development of such areas, taking into account the interests of the owners and their rights on owned properties. It is expected that the owners of the industrial objects on the basis provided by the government authorities various benefits will appear or the initiative of self-investment in the development of these areas, or will increase the attractiveness of these areas for investment from external, primarily private investors.

Despite the positive legislative initiatives, the current wording of the Law raises a number of questions that can be marked as positive and negative.
On the one hand, the Law involves a) the creation of new mechanisms of development of investment climate and attractiveness of industrial land developers, b) the development of abandoned/unclaimed, but the existing infrastructure with regard to the public interest for economic development and private profit of industrial facilities, C) the development of industrial areas without significant public investment from the budget, d) the creation of tax benefits for entities participating in the development of the territories.
On the other hand, the Law has a number of obvious shortcomings that cast doubt on the positive effect of his actions:
⎯ create an additional method of seizure of immovable property from the ownership – which in itself can be a negative investment risk;
⎯ a product of contradictions with the current planning legislation zoning and the Federal law "On General principles of organization of local self-government", including on issues of competence of local authorities;
⎯ disobeying the General system of legislative regulation of the mode of ownership of property within the boundaries of the zones;
⎯ the lack of clear and transparent procedures for determining the extent of damage to objects located within the boundaries of the zones;
⎯ create a new tool for work raider structures to capture territories in General or businesses in particular.
Controversial method of generation owners a single solution for the development site – currently decisive defined by the interests of those owners whose cadastral value of their objects above (determination of cadastral value, which now exists in itself raises many questions and can also be seen as a risk factor). In fact, the issue of decision-making will play a "law" that violates the principle of equality.
Thus, the proposed mechanisms for the involvement of owners in part by "development" areas can be caused either by objective reasons and the personal interests of individuals.
The unresolved and controversial some provisions of the Law on the issues is an independent risk factor for the occurrence of disputes between participants of agreements on the development of areas such as observance of their rights as land owners, as well as procedures for making decisions about the development of the territories concerned.

According to economists, the redevelopment project of the industrial zone can cost 30% more than building a new site, because before construction it is necessary to conduct a number of preparatory procedures, including the study of the territory and environmental cleanup. Some of the post-war industrial development and unsuitable for redevelopment.

At the stage of further harmonization of the Law needs to improve all of these issues in order to actual provide a comfortable legal environment for all parties involved and independent and voluntary appearance of investor interest to participate in such projects.
In our time we already know the positive precedents (without the law) the implementation of projects on development of industrial zones.
⎯ the territory of the former Moscow gas factory. Since the production was stopped, the plant has lost its interest and its effectiveness. The development of this site gave an impressive investment move. Building on the territory converted into office space and creative platform, was a developed transport infrastructure;
⎯ The business centre "Red rose" (total area of 20 thousand sq m class b+) on the site of the former factory "Red rose"- spent $10 million to the Planned payback period was 3 years. This complex, built before 1917, according to the main characteristics well suited for the renovation of buildings for office center: location, business activity area, building specifications, etc.

Return to the list