[Marxism] Engels would gasp

Louis Proyect lnp3 at panix.com
Mon Dec 18 08:48:17 MST 2006

NY Times, December 18, 2006
Moscow Journal
Engels Would Gasp, and Locals Gripe, at a Golden Mile

MOSCOW, Dec. 17 — The statue of Friedrich Engels 
that graces one of central Moscow’s most 
prestigious neighborhoods has not been of much 
use to any but pigeons in recent years. But 
Engels, the co-author of “The Communist 
Manifesto,” was a handy rallying point not long 
ago for some residents of that neighborhood, 
Ostozhenka, who were protesting its 
transformation into a hotbed of luxury housing 
thanks to the Russian capital’s oil-fueled real estate boom.

“Leave Us Alone,” read banners unfurled by the 
protesters in September. That is the name of 
their movement, spurred by the latest luxury 
housing project, slated for the site of an 
apartment building in which some of them still 
live, at Khilkov Pereulok 3. The gold domes of 
Christ the Savior Cathedral, a 19th-century 
church destroyed by Stalin and rebuilt in the 
1990s, just as the district began to take off, overlook the area.

Ostozhenka (pronounced ahs-TO-zhen-ka), once home 
to many artists and intellectuals, is now known 
in the parlance of real estate agents and their 
wealthy clients as the Golden Mile. In the last 
five years it has become a Kremlin-view Beverly 
Hills on the Moscow River. Its winding lanes are 
now home to modern multimillion-dollar 
penthouses, Ferraris, gourmet restaurants and 
bizarre crimes: last year a celebrity plastic 
surgeon was stabbed by roller skaters, and later 
died, in what appeared to be a roll-by contract killing.

The neighborhood’s rise is only one of many 
morality tales of money, power and real estate 
now playing out across post-Soviet Russia.

In recent months, dramas included an elderly 
Moscow couple who had been evicted from their 
home and were camping in the yard of their old 
apartment building, which was slated for 
demolition to make way for new construction, and 
villagers being pushed from their homes on the 
edge of Moscow to make way for high rises. In 
both cases, residents were infuriated by orders 
to move to apartments in Yuzhnoye Butovo, a 
district that is near a former Stalinist killing 
field and an hour from central Moscow by subway. 
They are still fighting the orders.

The fight continues in Ostozhenka as well. “The 
Golden Mile is the most brilliant business 
project in post-Soviet Russia,” Denis Litoshik 
said in November at one of the neighborhood’s Starbucks-like coffee shops.

Mr. Litoshik, 27, has a personal stake in its 
transformation: he lived, until recently, at 
Khilkov Pereulok 3, and is a leader of Leave Us 
Alone. As a journalist for the business newspaper 
Vedomosti, he is awed by what he says is a 
reported $33,000 per square meter price tag on 
apartments going up next door to his former home. 
“They’re not selling drugs, but they’re making 
much more money,” he said of developers who have converged on Ostozhenka.

But a few buildings, some ramshackle, some 
solidly middle class, hinder a complete makeover.

One of those is Khilkov Pereulok 3. Mr. Litoshik 
lived there with his wife and their baby until 
city authorities issued a decree in May declaring 
the building subject to demolition to make way 
for new construction even though the 19th-century 
building was overhauled in the 1960s and 
renovated again in the past few years. He and 
other residents were pressured by officials and 
developers to leave. Fearing that the building 
could be burned down, as sometimes happens across 
Russia when new construction has been slated, he moved away and began to fight.

This month, the business daily Kommersant 
reported that the federal antimonopoly watchdog 
had deemed the plans for Khilkov Pereulok 3 
illegal. But that ruling could yet be challenged 
and may not halt the development. Sergei Tsoi, 
press secretary for Mayor Yuri Luzhkov, was 
quoted by Kommersant earlier this year as calling 
the Ostozhenka protesters’ actions “egoism.”

Ostozhenka stood virtually untouched until the 
late 1990s, frozen in time by a Soviet decree 
that called for the construction of a vast 
Lenin-topped Palace of Soviets in place of the 
razed Christ the Savior Cathedral. It was never 
built, but the plan was never revoked; a swimming 
pool was instead built on the site. And 
Ostozhenka figured in Mikhail Bulgakov’s 
surrealist novel, “The Master and Margarita,” 
which gave the Russian language its ultimate real 
estate catch phrase: “The housing problem has corrupted them.”

Bulgakov depicted the early Soviet years, when 
aristocratic abodes were forcibly transformed 
into communal apartments for the masses, with 
shared bathrooms, kitchens and secrets. Now new 
money is squeezing out the remaining 
“kommunalki,” as the communal apartments were called.

Aleksandr Khosenkov, 56, lives in a friend’s 
communal flat. “I live here, but all the streets 
have been renamed — I can’t find the houses,” he 
said. “It doesn’t matter if a person has a 
Mercedes. Their soul should matter, not their car.”

Georgy Dzagurov, the general director of Penny 
Lane Realty, which offers properties in 
Ostozhenka, said, “Practically anyone who is powerful has bought there.”

“One million dollars or $2 million is nothing for 
them,” he said of his clients. In October, Morgan 
Stanley announced its purchase of a stake in RGI 
International, owned by Boris Kuzinez, a 
developer whose ultramodern buildings are 
credited with transforming Ostozhenka into 
billionaires’ row. RGI’s Web site, posted in time 
for its London Stock Exchange initial public 
offering earlier this month, lists Khilkov 3 among its projects.

While describing his clients only as “mostly 
businessmen, bankers, in oil and metals,” Mr. 
Kuzinez acknowledged an oligarch’s need for the 
right milieu. “It’s hard for oligarchs to live in a regular building,” he said.

Maksim, a banker, though not an oligarch, 
declined to give his last name but agreed to show 
his sleek two-bedroom apartment in an a Kuzinez 
development. “There are guards everywhere,” he 
said. “Filtered water, central air conditioning, 
good parking. The main thing is it’s homogenous. This is a plus.”

Mr. Litoshik, wearied by battle, is accepting a 
buyout of over $10,000 per square meter for his 
80-square-meter (860-square-foot) apartment. A 
victory, he said, because in Russia a fair price 
is almost miraculous. A loss because “we never wanted to sell our apartment.”

It is a story that has been familiar to 
generations of Russians, both before and after 
the Soviet era. “Khilkov 3 is ‘The Cherry Orchard 
2,’ ” Mr. Litoshik said, referring to Chekhov’s 
play about — what else — money, real estate and one class squeezing out another.

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