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St. Petersburg’s suburbs become the main economic growth point of Leningrad Oblast
Roads leading in and out of St. Petersburg are clogged with traffic congestion in spring, summer and autumn. Drivers have got used to traffic jams as well as to extremely poor quality of highways outside the city limits. Attempts to explain the situation by dramatic increases in the number of cars (the number of private cars per 1000 residents rose from 160 in 2000 to 250 in 2007, according to St. Petersburg’s Transportation Committee) and by the dynamics of freight transport development do not help. Actually the problem is not limited to increased number of cars and trucks on roads - no less important are fundamental changes in the life style of people that lead to reformatting of urban space and reconfiguration of the city’s environment zone.
Essential structural economic changes ongoing in Russia, primarily in large cities, are generally characterized as postindustrial transaction. St. Petersburg , Russia’s second largest city (the population of 4,5 million, GRP of 811,7 billion rubles in 2006, the average index of GRP physical volume in the period of 2000-2007 was 10% ) and the center of large urban agglomeration, whose borders are constantly expanding to include large areas of Leningrad Oblast is in the epicenter and on the frontier of transition to the so-called postindustrial economic structure (the term “agglomeration processes” here refers to the processes of creation of unified markets and integrated areas).
Industrial sector reduces its share of total employment. There is a reduction in the industrial sector’s share of employment (it does not imply the decline in production, quite the opposite - production would grow due to modernization and introduction of new technologies that reduce demand for human labor). The number of “white collars” or office employees and service personnel in the sphere of retail services and entertainment is expected to grow sharply. At the same time, there is a gradual reduction in the share of working-age people employed in the industrial sector amidst the sharp crisis at the labor market. Actual reduction in the share of employed workers, rapid increase in motorization, the growth of disposable leisure time and increase in the share of self-employment reflect powerful shifts in the lifestyle of Russian people, primarily, of the residents of Moscow and St. Petersburg.
Competitiveness of the Area
Russian cities undergo dramatic changes in the basic development process and transition of the functional nucleus, rapidly following the path that US and West European cities passed some 25-30 years ago. Industry and manufacturing are being pushed to the periphery and development of cities is based on management and circulation of financial, informational, commodities and human resource flows. Modern city economy is based on labor market and training of high-skilled workforce, generation of new ideas and innovations, organization of project financing and management form the center of the economy of the modern city. All these activities depend on people and communications infrastructure – and people choose comfort, variety of goods and services, diversity of life experience, openness and abundance of new opportunities.
Development of modern cities is determined by these new conditions that secure the desired global competitiveness of an area. The city space and infrastructure undergo transformation and modernization, large-scale projects are launched and city boundaries are changed. In the USA, the EU and Japan this trend have led to the shift in the focus from the city as an administrative unit to the so called “metropolitan areas” as well as to changes in fundamental principles of the management of urban development. Performing the important task of integrating Russia into global economy and culture St. Petersburg has already become a center of prosperity and of taking important economic decisions at the national and macro-regional level. In order to secure its current positions it needs to change, to become the center of modern consumption formats and innovations, to offer unique conditions of comfortable, diverse, esthetically attractive and environmentally friendly urban space.
New Functions
Suburb area as an integral part of quasi-urban space which foreign experts and managers call “metropolitan zone” plays an increasingly important role for St. Petersburg, well beyond the limits of the necessity of finding places for summer houses and allotment plots or for a solid waste dumpsites. New functions vary greatly but all of them are closely linked to development of the city and can not be located in traditional urban areas.
Suburbs have become a place of permanent residence for city dwellers .Cottage settlements are being built rapidly in suburban areas. These private-owned cottages are the so called “second home, while the cottages located in the far-off periphery zone (Priozersk and Vyborg areas) serve as “third homes” and function as seasonal dwellings. This development patters differs dramatically from dachas and allotment plots. Also there are examples of suburban residences targeted at a family that prefers a suburban cottage to an urban apartment, i.e. the “first home” is now located outside of the city center (an individual house in suburbs). In the situation of scarcity of unique nature objects, engineering infrastructure and land of the needed category rapid development of cottage settlements has led to quick and substantial hike in land prices - up to $15,000 – $20,000 and over per “sotka” (100 sq.meters).
Entertainment, thematic recreation and active recreation create a dynamic segment of development in St. Petersburg’s suburban zone. Among the recent landmark projects are skiing resorts in Korobitsyno (Zolotaya Dolina, Snezhny and Krasnoye Ozero), near Toksovo and Kavgolovskoye Ozero (Okhta-Park, Severny Sklon) and Pukhtolova Gora near Zelenogorsk. The Igora project is a year round sports and leisure resort with a ski center, a spa center, a recreation village, carting and paintball facilities and an extreme park. Third stage of the project realization envisages building of an ice palace, bowling center etc, the volume of investments is over $50 million
The tourism industry including business tourism is being developed at the southern and northern shores of the Gulf of Finland. Investors are shifting their attention from suburban pensionates, hotels, beaches and restaurants to larger and more complicated projects in terms of their implementation and management, like the International Congress Center (ICC) being built along the highway to Pushkin and financed by Gasprom group represented by Gasenergoprombank. The ICC is planned to be built by 2010 on the 56-hectare plot of land located near the Pulkovo water reservoir, Pulkovka river and Petersburg highway. The center will have over 300,000 square meters of exhibition, hotel and office space , estimated project cost is up to $1 billion. An international architectural design competition was conducted. The Star Way congress center near the Congress Palace in Strelna is scheduled to be built by 2011 as part of the project for development of the state residence in Strelna. The building designed by Riccardo Bofill will have the total area of 90,000 square meters , estimated project cost is 350 million Euro. The project is financed by a group of investors that includes VTB, Lukoil Rossiya Bank and Gasprombank.
Industrial-logistics parks popping up in Leningrad Oblast like mushrooms after the rain are primarily engaged in provision of services to retail trade and industrial sector (in particular, newly-created car assembly plants of world’s leading automakers, that form an integral part of their global supply chains and much less so – in provision of services to transit flows. This logistics service function is also new for Leningrad Oblast and St. Petersburg’s suburban area
Completion of the major section of the ring road that goes mainly through the oblast territory and actually serves as the basic transport infrastructure of the suburban zone closest to the city, has led to creation of large shopping centers that could not be built within the city boundaries. These are two 250,000 square meters Mega complexes and the giant trade corridor that stretches along Pulkovo highway. St. Petersburg can no longer afford to have suburbs that fail to perform the function of providing the city with services.
A different quality of life
New function of suburbs leads to emergence of new projects, targeted at commercial consumer demand that has its center in the wealthy city of 5 million. It is reasonable that most of the projects presently on-going in the oblast are financed by St. Petersburg investors and the volume of their financing is comparable to the volume of investment in industrial infrastructural projects like Ust-Luga port, Primorsk etc. that were earlier regarded as the backbone of industrial development in the oblast. Moreover, development projects like tourism, recreation, sports, sales and entertainment and housing projects are targeted at fundamentally different quality of life due to a wide range of new recreation opportunities and living conditions enjoyed by city residents.
At the same time it should be noted that these new projects create fundamentally new requirements for road and transport, electric power and social infrastructure, for the labor market, environment protection measures.
First, existing system of Leningrad Oblast motor roads is badly suited to the new volume and structure of motor vehicle fleet. St. Petersburg administration makes considerable investments in modernization and development of main arteries from the city, enabling citizens and businesses to travel to suburbs and back. However, the situation with motor roads just beyond municipal borders changes radically for the worst: first signs of road repair and maintenance on the highway leading to Priozyorsk appear only some 40-50 kilometers beyond the city border. Class of most roads does not correspond to their present functions and load. Igora and other resorts have already created additional load on Priozyorsk highway and other motorways leading north. In the last 10 years commercial cargo carriers and bulders have used mainly heavy-duty machinery and applied obsolete SNIPs ( construction norms and rules) for road works. This dismal condition of roads in suburban zone is the prime cause of traffic jams, persistent violation of traffic regulations and the growing number of road accidents and road accident deaths. Regional authorities’ attempt to improve security on roads by increasing the number of traffic police officers is inefficient and even counter-productive. Insufficient investment into modern road infrastructure leads to discount for all new projects and for value of real estate objects owned by individuals or by companies in St. Petersburg suburban zone. It also puts people’s lives at risk and brings additional stresses. It is clear that responsibility for transport infrastructure development is beyond the area of regional authorities competence only and needs to be shared with federal authorities. The problem is not limited to modernization and expansion of the present system – it is necessary to implement the regional foresight (identification of future trends, challenges, opportunities, threats and limitations) for development of the unified St. Petersburg – Leningrad Oblast transport system, aimed, among other things, at creation of radically new objects of transport infrastructure. Development of transport would help to reduce unproductive time and energy expenses, improve the area’s accessibility by transport, i.e. will lead to expansion of immediate suburban zone and increase in the value of land, natural sites and real estate property in Leningrad Oblast through more efficient introduction of there products to the market.
Second, energy has long been a weak spot for all developers in the suburban zone. It applies to developers of small settlements as well as to companies – operators of giant shopping and leisure centers, like “Mega-Parnas”. Most developers initially include creation of distributed power generation in their development project and budget of expenses. For small-scale projects it can lead to impossibility of realization, for large-scale projects it leads to additional expenses as in the case of “Mega-Parnas” which so far has not succeeded in receiving electricity from the man power grid and has to use its own diesel-generating set. Many dacha and gardening communities suffer from numerous unexpected electricity cut offs, as if they are located hundreds of kilometers of large urban centers. At the same time, connection charge (nonsense for most developed economies) in some of Leningrad Oblast regions is over 56,000 rubles per 1 kW of rated capacity.
Third, complex development of the Oblast territory (in particular, in the SPb suburban area) should take into account the interests of residents and investment community. The point is that new functions have already started conflicting with each other and with existing environment. It would be a mistake to discard the experience of coordinating strategies for development of a territory and basic infrastructure (in particular, energy and transport), gained in other countries in the process of formation of a new paradigm for control over metropolitan zones development. Moreover, Russia’s has its first success stories - for example., constructive and best suited for all those involved solution of the issue of building the fast-tram line, that links downtown Chelyabinsk to suburbs and the area of planned integrated development of “Slnechaya Dolina” territory, implemented by Renova Stroigrup company.
Fourth, environmental situation is one of the crucial issues facing modern society; it is no longer an abstract scientific notion but an object that has its monetary value. Residents of a large metropolis recognize the value of clean environment and access to nature sites. A new ecologically-oriented sector of tourism industry and suburban real estate development emerges in Russia, especially, in the periphery of the giant Moscow agglomeration, where development of the so-called “far-off dachas” or “third homes” is focused on specific ecological requirement
Fifth, labor market is expected to undergo large changes, more residents of the oblast would work in the services industry and industrial and logistics sector than in agriculture. I doubt that modern world-level complexes created or planned to be created would find sufficient human resources possessing the necessary skills and qualifications in Leningrad Oblast. So, investors and regional authorities would have to join forces to fill the significant gap between supply and demand. Projects for construction of new sea ports, pipeline systems, large-scale energy units and industrial zones fully comply with priorities for development of Russia as a major world power – so, these projects will not lose their relevance for Leningrad Oblast. However, development of St. Petersburg as a major business and cultural center of communications, exchanges, management and innovation creates new challenges for spatial structure and management system in the city as well as in Leningrad Oblast. First and foremost these challenges relate to new functions and opportunities for the suburban zone that can, among other things, expand (at least, in people’s perception). They bring new and unusual opportunities to Leningrad Oblast and require emphasis on policy and vision of the future of regional economy.
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Author: Eduard Boze, CSR “North-West” expert
Source: Region Rosta magazine (a supplement to Delovoy Peterburg newspaper)
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