DEVELOPMENT IN THE INDUSTRIAL BELT: Tram Barn Studio Project
Because Russia was a socialist economy for over 80 years, land use was determined by government decree rather than by a free market, with the result that centrally located real estate was often underutilized and undeveloped. As Russia transitions to a market economy, the government has begun to take steps to allow the market to convert underutilized and underdeveloped property to more productive uses. The historic core of St. Petersburg, built primarily prior to 1910, is surrounded by an industrial belt, whose land use has not changed since its development in the 1920s. Factories that produce obsolete goods using outdated production models, as well as vacant buildings once housing heavy-industrial businesses, occupy large tracts of land in what otherwise is prime real estate in terms of location. In addition, the absence of environmental controls has left most of the industrial property with severe environmental contamination that requires a massive financial investment to remediate. To exacerbate matters, the country lacks financing methods, real estate law, and a market history necessary to properly assess land values and determine ownership. This paper explores the design options and financial advantages that the government can realize through the use of publicprivate partnerships which, in the face of these challenges, could be used to facilitate real estate development in the industrial belt that surrounds the historical district of St. Petersburg.