Starting in 2013 the EUSP has been developing a project to adjust the building it occupies since 1995 (the Palace of Kushelyov-Bezborodko on 3A, Gagarinskaia Street) for modern educational purposes.

Today it is one of the largest and unique investment projects in St. Petersburg. Its total cost was originally estimated at about 2.2 - 2.4 billion Russian rubles. The University has pledged to invest around 700 million rubles to restore the historic part of the palace. The architectural solutions were authored by Jean-Michel Wilmotte who has recently built the Russian Cultural Center and Church in Paris. Wilmotte is also widely celebrated for re-designing museum spaces at Musée d'Orsay in Paris and for restructuring the Collège de France.

Last summer the University underwent a series of unscheduled inspections by various regulatory agencies. It seemed, however, these inspections would not affect the construction plans. The final approval of the project by the city government and the signing of the investment agreement were scheduled for early February 2017.

However, on December 27, 2016 the Committee for Property Relations (St. Petersburg City Administration) notified the University about the termination of the lease agreement for the building at 3A, Gagarinskaia Street. The decision of the Committee was based on the results of an unscheduled summer inspection to identify potentially unauthorized architectural alterations. The claims issued against the University referred to the installation of plastic windows on the courtyard facades of the building and the construction of a number of temporary partition walls.

It is important to note that none of these alterations put the cultural heritage of the palace at risk. They would be automatically corrected during the adjustment project as mentioned above.

By terminating the lease agreement the University would be left without a building and, accordingly, without its license to conduct educational activities. That would also mean the city will lose a large investment project.

There is a degree of incommensurability between the claims of the Committee and the consequences entailed by the latter's tough stance.

On January 9, 2017 the European University at St. Petersburg appealed to the Arbitration Court of St. Petersburg and Leningrad Oblast with a claim against the Committee for Property Relations.

The initial session at the court of original jurisdiction is scheduled for March 15, 2017. In addition, on January 19, 2017 the court upheld the University's request for an interim measure by prohibiting The Federal Service for State Registration, Cadastre and Cartography (Rosreestr) in St. Petersburg to register the termination of the lease agreement.