Landfill problem prompts LensSpetsSMU to terminate contract with KUGI

2009-12-21



LensSpetsSMU is seeking to terminate its investment contract with the St. Petersburg City Property Management Committee (the KUGI). However, this is not because of financial problems caused by the economic crisis, as reported earlier, but because the site which it bought in 2008 is located close to a chemical waste landfill.
The developer paid €45m for the 60,000 m² site in Optikov Street in St. Petersburg, on which it had intended to build 126,000 m² of housing. The company allegedly knew about the landfill and could have concluded an agreement with the city authorities to have the waste removed at the city’s expense. However, no work on the landfill began.