Aluminum Magnate Turns to Property Development

Lev Chernoi has turned to property development, with an investment in a 380 million euro ($522 million)apartment and hotel complex to be built on the site of the Mir hotel on Novy Arbat.

This week at the MIPIM property exhibition in Cannes, France, the firm Tantyema will present a design for theproject. According to a statement from project consultant Kalinka-Realty, the total area of the complex will be186,000 square meters, including a shopping center and parking spaces for 1,125 cars.

Besides the proposed project, Tantyema also owns the 12,000-square-meter Sfera mall, also on Novy Arbat.

The principal founder of Tantyema, with 99 percent of the company according to the Uniform State Registerof Legal Entities, is Boris Khait, a co-owner of the Spasskiye Vorota insurance company. But at the end oflast year, he told Vedomosti that he had sold the company. He could not be reached for comment Thursday.

Two property consultants said Chernoi was a key investor in the project, adding that there is “a Westerncompany that finances Tantyema's projects.” Chernoi is one of the founders of the company, arepresentative of the businessman confirmed. Valery Yefanov, chief executive of Tantyema; Alexei Sidorov,development director of Kalinka-Realty; and a spokesperson for Jones Lang LaSalle, another consultant forthe project, declined to comment on the shareholders of Tantyema.

Yefanov said the development and coordination of the project, as well as the laying of infrastructure, wasunder way. “Several tens of millions of dollars” of shareholders funds have already been invested, he said,and in the future they plan to attract partners or secure banking finance.

Construction is to begin at the end of 2010 or the beginning of 2011 and should be finished by 2012,Yefanov said.

Chernoi is not known to have been involved in property development before. He shot to prominence duringthe aluminum wars of the 1990s. Lev and Mikhail Chernoi, known outside Russia as Michael Cherney,together with Devid Rubin bought up large stakes in the Krasnoyarsky, Bratsky and Sayansky aluminumfactories, the Krasnoyarskaya hydroelectric power station and the Achinsky alumina refinery.

But then the brothers fell out and separated their holdings, and in early 2000, Lev Chernoi and Rubin soldtheir stakes to Roman Abramovich and Boris Berezovsky for $550 million.

Since exiting the metals industry, Lev Chernoi has financed a range of innovative projects and was alsoinvolved in scientific and social activities, including the creation of Mobilization and Development, a socialorganization to promote democratic reforms, according to the web site of the Institute for Advanced ScientificStudy, where Chernoi serves as director.