Moscow’s Makeover Swaps Soviet Grit for Urban Sparkle; Smart city apps, historically accurate trees, a working subway. While Washington obsesses over sanctions and hacks, Russia is rebranding its capital as a model of urban planning.

(Bloomberg – bloomberg.com – Valerie Stivers – August 10, 2017)

[Text with photos bloomberg.com/news/features/2017-08-10/moscow-s-makeover-swaps-soviet-grit-for-urban-sparkle]

Moscow felt medieval when I first arrived almost 20 years ago, in January 1998, seeking adventure. There were few billboards, advertisements, or shop windows filled with merchandise. The women working at my local producti, or small grocery store, wore shawls, had moles and wens, and weighed out my purchases on an old-fashioned scale. One had an oozing wound on her hand and a stained bandage; I was enough of an American to find this shocking. To buy an apple, I had to stand in three lines. My friend Olga worked at Krisis Genre, one of Moscow’s first bars, and when I walked there at night from Metro Kropotkinskaya, the streets were completely deserted.

What grandeur Moscow had then, what culture, what good bones. In ruin, it was the most beautiful place I’d ever been. I took pictures, dazzled by the monumental scale of the city, the massive boulevards and brutalist architecture, the oceans of marble in the metros, the social realist statues of huge, broad-bosomed female factory workers gazing up toward a utopian future. All of it-even Lenin’s wife, Nadezhda Krupskaya, a black metal giantess outside Metro Chistye Prudy-covered in grit.

The 1991 dissolution of the Soviet Union, which the West celebrated as a triumph, had been devastating for many Muscovites. Teachers and workers in government-owned factories were unpaid for months, and the middle class went hungry. By the late ’90s life had become less dire, but there were two currencies circulating, the second issued to deal with the hyperinflation of the first, and city services had collapsed. The parks were full of garbage and alcoholics, the playgrounds were carpeted with broken glass and smelled of urine, and the lovely old metro stations were encrusted with kiosks. There wasn’t even snow removal. I quickly learned the shuffle-walk locals used to traverse the lakes of ice on the sidewalks.

Today’s Moscow is clean, green, and inviting-in the areas that aren’t undergoing zealous renovation. Glimmers of majesty have given way to a uniform glow, though some of the strangeness remains. Last August, on a block where I once sat on a bench and wept with frustration at my inability to use a plastic Soviet token to make a pay phone call, was a pop-up cafe with Alice in Wonderland-like oversize pink-and-white plastic furniture offering a comfortable spot to use the city’s new, free Wi-Fi. The cafe was populated by smiling young Russians with laptops, sipping coffee in to-go cups.

The change in Moscow reflects many things-a truly post-Soviet youth generation, Russia’s relative stability-but the dramatically different look and feel of the city streets is also an urban planning story as giant in scale and ambition as those social realist monuments. Most of the transformation has been in the very recent past or is still in process. It encompasses almost everything: roads, the metro, parks, building facades, and the municipal pipes, cables, and wires.

By all accounts, the driving force behind the city’s reinvention is Moscow Mayor Sergei Sobyanin. The 59-year-old, once a governor of the oil- and gas-rich Tyumen region, was first plucked by the Kremlin to become a member of Vladimir Putin’s administrative staff. In 2010 he replaced, by appointment, allegedly corrupt Mayor Yury Luzhkov. In 2013, Sobyanin was elected to his position in the city’s first popular mayoral contest in 10 years, winning against opposition politician Alexei Navalny, who got 27 percent of the vote.

Moscow, the country’s capital and the place where its large corporations and oligarchs are based and pay taxes, is visibly prosperous. According to the Brookings Institution, it has the 10th-largest economy among global metro areas, based on gross domestic product. (New York is in the lead, followed by Tokyo and Los Angeles.) It helps that Moscow is treated more like a state than a municipality under Russia’s tax code and keeps a disproportionate share of its tax revenue. You can see the money in the BMWs and Bentleys slinking along the newly decongested streets, in the glamorous 24/7 club scene, on the brand-new metro, or in the busy malls on the city’s outskirts.

This is so, even though the economy has suffered from cratered oil prices and, to a lesser extent, sanctions imposed in response to President Putin’s military incursions in Ukraine and military support of Bashar al-Assad in Syria. Loosely speaking, the sanctions make it illegal for businesses in participating countries to conduct transactions with some Russian entities, primarily in the oil and banking sectors. Revenue from oil and gas companies, which once made up 25 percent of Moscow’s tax intake, has shrunk to about 5 percent, says Sergei Levkin, director of the department of city building policy. But Russia has weathered the fall in oil prices better than many oil-dependent countries, according to the World Bank’s 2017 Russia Economic Report, which also predicts modest economic growth for the country.

Moscow itself has been cushioned from the blows of the sanctions. The most severe consequences, says Mikhail Dmitriev, president of New Economic Growth, a Russian consulting company, are regional; the stagnation of the finance industry (a secondary effect of the sanctions) has stoppered development in the provinces, which unlike Moscow can’t pay for new roads and bridges out of their tax budgets.

Moscow’s budget in 2016, says a spokesperson for the mayor’s office, was about $28 billion. To put this in perspective, the budget has to serve twice as many people (17 million) as New York City (8.5 million) with a little more than a third of the money. The planners’ vision of how to get the most out of it is the talk of the city.

The sixth annual Moscow Urban Forum in early July featured 419 speakers over two days-finance people, tech visionaries, food entrepreneurs, architects, and urban planners from Russia, along with such international counterparts as Christos Passas from Zaha Hadid Architects and Steven Raspa, director of the Burning Man festival. The conference took place at the VDNKh exhibition center, a Stalin-era landmark once devoted to an “Exhibition of Achievements of the National Economy,” which has recently been renovated along with other major landmarks. The newly planted grounds display, among other signs of official largesse, 2 million flowers, 18,000 shrubs, and 130 trees.

This year’s conference theme was “agglomeration,” the unlovely coinage for the sprawling megacities of the future, which swallow (“agglomerate”) suburbs and nearby smaller cities to create a single urban mass. This process is inevitable, according to United Nations population predictions, and Russia has embraced it for Moscow. In 2014 it even took a chunk of territory from the surrounding oblast, or province, doubling the city’s geographical size, and announced plans to relocate government offices there from the city center, a move copied from Beijing.

“I think the taste has improved with the change of mayor”

Agglomerations concentrate and drive their nations’ wealth, thriving according to their ability to attract and retain human capital. Making a metropolis easier to navigate, physically and bureaucratically, helps keep the urban demographic happy, but in the past decade those residents have come to require more. There’s a sense a city should be a magical origami box ever unfolding new layers of fun, food, and culture. Alexandros Washburn, New York City’s chief urban designer during the administration of Michael Bloomberg (the founder and majority owner of Bloomberg LP, which owns Bloomberg Businessweek), says the strategy is to “design locally to compete globally.”

During the two days of the forum, Russian officials of all types emphasized that they’re on board with the same trends revving up the rest of the globe’s thriving urban cultures, at least in terms of bike lanes and cute coffee shops, sustainability and walkability. Sobyanin opened the conference by reading a letter from President Putin. “In the current global economy,” it said, “the competitiveness of a country’s megacities determines the competitiveness of the country as a whole, and thus we are paying close attention to the quality of living in Moscow, all the items of infrastructure, traffic flow, energy saving, and protection of cultural heritage.”

Hearing “quality of living” and “Moscow” in the same sentence is a surprise. In the ’90s, if a hapless commuter tried to pass through the wrong metro turnstile, metal gates would viciously clap shut on her kneecaps. The city employees who swept the platforms would hit you with a broom if you didn’t jump out of the way fast enough. In 2012 and 2013, Moscow had the worst traffic in the world, according to the TomTom index.

Moscow faced then, and continues to face now, another challenge to quality of life, at least from a Western perspective. Putin’s United Russia party calls its controlled elections “sovereign democracy” and currently isn’t allowing Navalny to run for president. (At some lower levels, there’s more nuance and self-determination.) In 2013 a bill was passed that criminalized “gay propaganda.” The language of the law was loose enough to mean you could be fined for discussing being gay in public. The European Court of Human Rights described it as a sinister form of state-sponsored discrimination. You can also be sent to jail for insulting religion inside a church. Reports of censorship in the arts abound in the alternative and English-language press.

Putin, though, has a perennially strong approval rating. Public dissent most frequently centers on corruption, rather than on issues of social justice and free speech. This year has seen unusually heated anticorruption protests-despite measures by the police to curtail them. A 2016 report by Russia’s Committee of Civil Initiatives found the country’s emigration rate is higher than the official figures. Sir Roderic Lyne, the British ambassador to Moscow from 2000 to 2004, estimates that 2 million to 6 million smart, young Russians have left over the past 25 years. Lyne, who’s been visiting the country since 1961 and serves as an adviser to the banking sector, says there’s “a huge level of frustration” among entrepreneurs over the security of their property rights.

Nevertheless, Moscow is putting its focus on “compet[ing] globally by designing locally.” It’s reverse-engineering downtown areas to prioritize pedestrians over cars and greening block by block in what’s called the My Street program. It’s making the city center a curated romping ground for the young and ambitious, with neo-brutalist swing sets near the Mayakovskaya Metro and skate ramps and wooden-block seating by the river. The latest element is a program called the Moscow Seasons festivals. The series of public events combines pop-up shopping and dining options with contests, events, and large-scale arts installations (including the outcropping of laminated furniture in the pop-up cafe I stumbled upon). Says Lyne: “If we’re just simply talking about the built environment, this is the greatest transformation I’ve observed.” He says “some of the buildings put up under Luzhkov were of a Trumpian grandiloquence and vulgarity. I’m not personalizing it in Mr. Sobyanin, but I think the taste has improved with the change of mayor, and Moscow has become a very livable, modern city.”

When Sobyanin took office, one of his first decisions was to create a central information technology department. He hired Artyom Ermolaev, then 35, as Moscow’s minister of information technology. The centralization saved money and provided the city with new powers in data collection. Setting aside issues of surveillance-and hacker jokes-running algorithms based on when and how people get around has enabled Ermolaev’s department to generate a full roster of technological bells and whistles. More than 200 city services are accessible on mobile devices (compared with five when Sobyanin took office). Storefront data centers, where residents can order documents or pay bills with help from an actual person, have popped up in every district. An app called Active Citizen, which has 1.6 million registered users, allows voting on such things as bus routes and school holidays. Ermolaev predicts a near future when the city will be able to push traffic updates and other notifications to citizens before they know they need them.

“It’s actually quite an open system in terms of getting ideas,” says Dominic Barton, a global managing partner at McKinsey & Co., who spoke at the forum. “I’d say that Moscow is in the top 10 percent of cities on the innovation side.” Sobyanin’s peers in that group, Barton says, are “Singapore, John Tory in Toronto, Sadiq Khan in London, and the mayor of Seoul.” Implicit limits, though, are imposed on free communication, because users of the public Wi-Fi must identify themselves. Eldar Tuzmukhametov, 32, an IT executive who’s in charge of applying best international practices, says this came from the Kremlin: “You know that Russia and Moscow are very different things.”

Wi-Fi is nice, but convenience in a city has everything to do with transit and traffic-a potential nightmare for future agglomerations. Russian authorities are tackling this with vigor. “If it takes you an hour and a half to get to work, you will have less strength and you will work less productively,” says Levkin, of the construction department. “Active people seeking self-realization will look for a different city to live in.” To these ends, Moscow has embarked on simultaneous transportation and real estate restructuring, working on the one hand to move people around more easily without cars and on the other to put their homes and workplaces closer together, a vision popular in urban design circles. The better big city, we’re advised, should have multiple, walkable “nodes” rather than one or two centers.

“Why do they have to re-lay tiles again? It’s an endless process”

Moscow spends 15 percent of its total budget on transportation investment; it has instituted congestion pricing, added a ring road, better connected the outlying neighborhoods, and put in the popular Moscow Central Circle, an aboveground, 54-kilometer light-rail train connecting outlying neighborhoods to each other and existing metro stations. These have been cleaned up, and the kiosks around them torn down. The metro’s total capacity is up 30 percent since 2013 and is expected to double between now and 2021. On the TomTom index, Moscow has moved in terms of congestion from first place to 13th, following Los Angeles. While an Angeleno might not consider that cause for celebration, it’s no small triumph for a city whose first roads were built 500 years before the combustion engine.

Housing reform has been “less of a success story so far,” economist Dmitriev says. In April 2017 the Duma (city council) adopted a bill to tear down 4,500 Khrushchev-era prefab concrete buildings known as Khrushchevki, home to 1.6 million residents, with a promise to move residents to better apartments in the same or a similar area. Sobyanin, in a written reply to questions, said the program will “preempt the situation where we have to deal with structurally deficient housing in Moscow for decades to come.” Public protests erupted, with some residents expressing fondness for their leafy neighborhoods and panic at the lack of details-where were they going, and when? In the ensuing five months, the city has provided some answers, extended the opt-in period through the Active Citizen app, and modified the initial bill, which now includes 5,144 buildings. The process is expected to take place over 15 years at an estimated cost of 3.5 trillion rubles ($58 billion).

Since the announcement, Moscow has been awash in competing theories about the project. Alternative website Meduza.io implied that the voting process by which residents opted in was rigged. (In theory, an apartment block could, with a majority opt-out vote, remain standing.) There has been widespread speculation that the program is an opportunity for government corruption, or that it’s a bailout of Moscow’s large real estate developers, who say they’re struggling with high vacancy rates. (There are many vacancies in Moscow, but it’s difficult to determine the precise figure, or its meaning for the market.) Others claim the government is trying to nationalize real estate. “It’s a state order with budget money, and it will totally wipe out independent developers,” an unnamed construction company executive told Bloomberg News. Another executive, in sales at a different large construction company, who also wished to be unnamed, pointed out that the furor is all speculative, since no deals have yet been made.

We can’t know if Moscow’s development is a plot to funnel public money to cronies, a way to mask economic problems, an empire-building project, or a reasonable attempt to generate wealth and stimulate the economy while fixing traffic and housing issues-or a little of all. In any city it’s hard to cut through the various interests to tabulate who will be helped and who harmed by big changes, and Moscow isn’t the most transparent place. What’s unmistakable, though, is the city’s physical transformation.

In the center, workers have torn up almost all the sidewalks and replaced them with wider paths of expensive stone tile, upgraded all the cabling under the streets, put in streetlights with energy-efficient bulbs, restored art nouveau facades, and replaced old granite with new. On Tverskaya, the central artery, they’re replanting the lime tree allées from the 1800s. Complaints about the construction have become the lingua franca. Alina Husainova, 26, at a bicycle event during the forum in Gorky Park (newly renovated, of course), said she loved the transformation of the city, “especially the bike lanes.” But she asked, “Why do they have to re-lay tiles again? It’s an endless process.” Vladislav Petrischev, 18, said he liked the mayor’s policy at the beginning, but “now it’s…over the top. That overnight kiosk demolition. It is a destruction of the whole business sector.”

It’s a complex moment for Moscow, which seeks to compete internationally yet finds itself culturally, economically, and politically at odds with the West. Last summer, for the Seasons Festival, Etsy-type young women set up dozens of booths and sold local crafts, such as carved rolling pins for making stamped cookies. Over Easter, giant versions of traditional painted wooden eggs decorated lawns. The most recent event, Flower Jam, which ended on Aug. 6, featured more than 100 landscape artists’ site-specific installations. It called to mind a contemporary, highly polished, agglomeration-size version of a peasant flower-arranging festival I once saw in the old Ukrainian city of Poltava. An uneasy relationship with globalism was playing out in Technicolor in this yoking of patriotism to the Instagramable cool that defines 21st century city style.

Sobyanin’s first minister of culture, Sergei Kapkov, called “the hipster minister” in the press, has been credited with the original vision for My Street, as well as the high-design strategy and an abortive turn toward greater freedom of the arts. Kapkov left the Moscow government in 2014, possibly having run afoul of the federal government’s policy of cultural conservatism. (He couldn’t respond by press time to requests for comment sent through Moscow State University, where he’s now a department head.) Whether the all-important young Russian human capital will be happy without him-or without the kind of cultural liberalism he represented-remains to be seen. Without its talented youth, the beautiful city could turn out to be lavishly funded but unsustainable, a Potemkin village in the land of Potemkin-and the administration’s big new idea is that they know it. -With Henry Meyer and Irina Reznik

©2017 Bloomberg L.P. All Rights Reserved. Article also appeared at bloomberg.com/news/features/2017-08-10/moscow-s-makeover-swaps-soviet-grit-for-urban-sparkle