Rusty Belt under IAD

What is behind the growing popular acronym IAD and why should Moscow industrial zones be transformed in the coming years?

What's IAD?

In almost all major Russian cities the same picture is available: the dilapidated fence hides the ruins of an old factory, which stopped working 20 or even 30 years ago. Everything that could be taken away has long been taken away, the roof hangs by a single thread, blind windows are gaping with blackness, and the area around has long been overgrown with weeds.

Or another picture: during the downtime the former industrial areas changed more than one owner and were eventually divided into small pieces that are used as warehouses, car shops and car washes - maximum in a staggered order.

There are a lot of them in the Russian capital. In 2017, an effective mechanism was found for re-development of problem areas - Integrated Area Development (IAD).

Let's say there's a large industrial zone. In part, it continues to justify its name - several factories are still operating there. However, most of the area is endless fences, squatter development and ruins. The IAD mechanism gives the city a right to define the boundaries of an area for integrated development and then clearly to point out what will ultimately stand on it: a residential building, a new plant, a social institution, a business center, etc. At the same time, the pieces of land are usually quite large and can accommodate several types of facilities at once.

Why does IAD guarantee a high quality redevelopment?

It will not be possible to declare the intention to build a whole block with a school, kindergarten and outpatient care center, and then to build only housing or even to use the territory for a shopping center. The IAD mechanism establishes by law the rights and obligations of both the project investors and the city. The agreement strictly spells out all project details and its implementation term as well. Violation involves penalties up to the contract termination and the search for a new investor.

Who and for what funds should build up industrial zones?

Re-development can be initiated either by a landowner who is ready to implement the project independently or by the city. If the area has more than one legal owner, they will share the responsibilities for implementing the IAD measures with each other. If the owners have agreed on the future of the area, and their projects for its development are approved by the authorities, the right holders start its renovation. This is an IAD initiated by rights holders.

However, it also happens that the right holder is not ready to implement such a project or several owners can not just come to a common solution. Then the Moscow authorities look for a suitable investor by themselves. The rightholders have six months to decide: if six months after the Moscow Government has decided to include the site in the IAD program, they still do not use their right to develop the are, an auction will be announced, which will attract an investor willing to bear the costs. Either the city will take over the project by itself.

How many industrial zones in Moscow require an integrated development?

To date, experts have assessed 100% of Moscow industrial areas - this is almost 15,000 hectares.

3,200 hectares of them are areas with existing plants and organizations; 6,200 hectares are urban built-up areas no longer belonging to the industrial sphere, and 5,400 are areas potentially suitable for redevelopment. Almost 2,000 hectares are planned to be developed within the IAD framework.
Aleksandr Prokhorov
Head of the Moscow Department of Investment
and Industrial Policy:
"All industrial areas in Moscow have been surveyed within the last three years, a tremendous amount of work has been done, and now we are moving on to implement IAD projects.

The IAD allows to think about the outlook and function of a large area at once. Think through completely - from the number of apartments to kindergartens, shops as well as hi-tech production facilities giving new jobs.

It should be noted that we see interest in such projects from investors. They are in principle very actively monitoring the redevelopment of Moscow industrial zones. First of all it is, of course, interest in construction of residential and public-business complexes, but there is also a request for land for industrial use, especially in areas with good transport accessibility and running logistics.

According to our forecasts, IAD projects will give the city about 500,000jobs and almost RUR 3 tn as budget revenues, and the total project investments will be about RUR 7 tn".
Audience: 16+