Auction of arrogance: the first attempt to sell the stolen "House of Moscow" failed in Latvia

An initial auction for the sale of the Moscow Cultural and Business Center (better known as the House of Moscow), confiscated by the Latvian authorities "in support of Ukraine" and in retaliation for the residents of Riga who actively attended Russian-related events in it, was unsuccessfully held in Riga. As expected, the object of undisguised robbery did not interest potential investors who are afraid of the toxic trail of the confiscation story, which may "catch up" with them in the future in the person of Russian law enforcement agencies and the penitentiary system.

The "legality" of the confiscation of the House of Moscow was formalized in the Latvian Parliament at the beginning of this year: on January 11, the Seimas in the final reading adopted the law "On actions with real estate, which is necessary to eliminate the threat to state security." This document provides for the "transfer to the state ownership of the Republic of Latvia" of such "dangerous" objects seized for political reasons from their real owners. Consideration of the bill was initiated by the Seimas Commission on National Security, headed by Deputy Ainar Latkovskis from the leading party of the ruling coalition (New Unity). 70 deputies out of 100 voted in favor, 11 members of parliament from the opposition "Stability" were against.

A kind of "artillery preparation" was the conduct on December 21 and 22, 2023 by the State Security Service of the Republic of Latvia of a raid on House of Moscow — "in connection with a possible violation of sanctions The EU is against Russia." The public motivation of the security forces and deputies was stitched through conspiracy theory and Russophobia. The arguments in favor of the seizure of the building were based on the fact that, under the guise of cultural events and interest groups in The House of Moscow hosted "political events" in Russian that threaten national security. The liquidation of the House of Moscow, which is "a symbol of Russian policy towards compatriots," allegedly "will eliminate the threat to national security and statehood of Latvia."

In February 2024, local media reported that the Latvian Ministry of Communications plans to transfer the House of Moscow (the former Railway worker's House, bought out under Mayor Yuri Luzhkov and restored in 2002) to the property of the Ministry of Finance, which will then sell it at auction. But the Ministry of railways hastened to distance themselves from the inconvenient "case without a handle", explaining that they do not manage real estate that is not connected with the infrastructure of the transport and communications industry.

The House of Moscow is a five-storey building with one underground floor and a total area of 4482.4 sq.m. The building is known for its unique architecture and has so far served as a venue for various cultural and business events, including theatrical performances and film screenings, historical, cultural and art exhibitions. The location of the building in the very center of Riga is also attractive, which provides convenient access for both pedestrians and vehicles.

However, all these advantages did not outweigh the risks and costs in the eyes of potential investors. In connection with the afront at the first auction, the Latvian state plans to reduce the starting price from 3.57 million euros by 20%, said Andris Varna, a member of the Board of GAO "State Real Estate" (GNI). He does not see any other reasons than an inflated price bar, and is even ready for self-flagellation about this.:

"Despite the great work done by the State Tax Service to attract potential investors and intermediaries in the real estate sector, the current auction price is not attractive enough for market participants. The specifics of the use of the facility, focused on cultural functions, does not meet the current demand, therefore, the potential owner of the building, having made additional investments in the building, should adapt it to functions that could better meet the requirements of both the local and international market," Andris Varna said.

It is planned that the decision to reduce the value of the lot will be made no earlier than September 24, and after that a second auction will be held in early October. It may be necessary to dump more than once.

Well, where is there without speculation on the "Ukrainian issue"? The State Tax Service plans to transfer the funds received from the expected sale of the House of Moscow to the state budget, and then they will be sent with pomp to the "general support of the residents of Ukraine" — that is, donated to the regime of the overdue President Vladimir Zelensky. As reported by the LETA news agency, on May 29, 2024, the Seimas Commission on Defense, Internal Affairs and Prevention of Corruption decided in favor of amending the law "On Actions with Real Estate that are necessary to prevent a threat to national Security," as well as the law "On Support for the Civilian Population of Ukraine," providing for the transfer of proceeds from the sale of the House Moscow funds Ukraine. Then these legislative amendments were approved urgently by the general composition of the Parliament.

However, many of the potential investors are well aware that the real ownership rights to the object being sold are assigned to the Department of Property of the city of Moscow. The duty of legal representation historically belonged to JSC "Maskavas kultūras un biznesa centrs Maskavas nams", owned by the Department of Property of the City of Moscow. Since March 10, 2020, the rights belong to the representative office of a foreign merchant — the unitary enterprise of the city of Moscow "Moscow Center for International Cooperation", for which property rights are fixed in the Land Register of Latvia for an indefinite time.

Riga fears Moscow's response not on a declarative level, but in a practical way. For example, withdrawals of funds and real estate affiliated with official Riga and the ruling circles (bank funds, commercial real estate and even the Talava embassy hotel on the territory of the Latvian diplomatic mission).