Kyiv City Council has permitted Gelegen Inc. to sublease a land plot under the Leipzig hotel at 24/39 Prorizna Street in Kyiv to Grand Plaza, a subsidiary of ISTIL Group, according to a correspondent of Interfax-Ukraine.
Kyiv City Council made the decision at a meeting on Thursday.
The issue concerns the subleasing of a land plot of 0.29 hectares at 24/39 Prorizna Street to Grand Plaza for 35 years until April 25, 2046. The land plot was leased for a long period to Gelegen Inc. in 1998 to reconstruct the building to the level of a five-star hotel.
As reported, ISTIL Real Estate in autumn 2009 bought an empty building at 24/39 Prorizna Street in Kyiv for $35 million to develop the four-star Leipzig Hotel.
The total cost of the project, which includes the purchase, connection to the city networks, construction, and the supply of the required equipment and furniture, is about $70 million. The opening of the Leipzig Hotel was scheduled for the second quarter of 2012.
The building at 24/39 Prorizna Street was constructed in 1900. Before the revolution in 1917 the Markiza confectionery was located there, and the Palermo Hotel occupied the rest of the building. In Soviet times the two-storey Leipzig restaurant was opened there. Since the 1990s the building has stood empty.
The owner of ISTIL Group is a British businessman of Pakistani origin, Mohammad Zahoor. The group mainly invests in the media, real estate, production and distribution of films, industrial production and environmental projects.
