A company with ties to an ally of Russian President Vladimir Putin has won the right to develop a prime piece of Moscow real estate near the Kremlin, two sources familiar with the deal told Reuters.

Moscow city government auctioned off the plot, which lies on the bank’s of the Moskva river and includes a number of historic buildings, and it was won by a construction company called Gorkapstroy-Garant, according to the city.

The two sources, who spoke on condition of anonymity because of the sensitivity of the matter, said that the firm represents the interests of businessman Gennady Timchenko.

Reuters was not able to independently verify that Timchenko, who has been described by the U.S. Treasury Department as a member of Putin’s inner circle, has a financial interest.

A spokesman for the Volga Group, which groups together Timchenko’s business interests, did not respond to telephone calls or to an emailed request for comment on Thursday.

The plot is a few hundred metres from the Kremlin, and some of the buildings on it date back to the 18th century.

Under a development plan presented by the Moscow city government in August, the winning bidder will preserve and restore historic buildings, turn one of the buildings into a hotel and convert some of the complex into apartments.

Timchenko has since 2014 been subject to U.S. sanctions imposed on Moscow for its role in the Ukraine crisis.

No contact details are listed for Gorkapstroy-Garant. Its parent company, Gorkapstroy, did not respond to a written request for comment. Staff were unable to connect a Reuters reporter by phone to Gorkapstroy’s boss.

The site had been used as a training facility for Russia’s Strategic Rocket Forces, the arm of the military which operates Russia’s nuclear arsenal. It became the property of Moscow city a few years ago.

Writing by Christian Lowe; Editing by Susan Fenton.
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