| JRL Home | JRL Simple/Mobile | RSS | Newswire | Archives | JRL Newsletter | Support | About
Old Saint Basil's Cathedral in MoscowJohnson's Russia List title and scenes of Saint Petersburg
Excerpts from the JRL E-Mail Community :: Founded and Edited by David Johnson

The so-called 'Putin Palace' is sold

Vladimir PutinA lavish seaside development dubbed 'Putin's Palace' has been sold to businessman Alexander Ponomarenko ­ but whether the $350 million price tag is a bargain or a bum deal depends on who you believe.

Ponomarenko, who last year sold Novorossiysk sea trade port for $2 billion with his partner Arkady Rothenberg, announced his purchase to Kommersant.
Image adapted from RFE/RL version giving attribution to RIA Novosti

$350 million for resort

A source familiar with the conditions of the deal said owner Nikolai Shamalov agreed to sell for $350 million, based on estimates of what the property will cost when it is finished.

Ponomarenko's empire has bought the two companies, Lazurnaya Yagoda and Idokopas, which own the unfinished property.

Idokopas owns about 67 hectares of the land in Praskoveyevka village, Lazurnaya yagoda ­ 60 hectares in Divnomorskoye village, out of which 27 hectares are allocated for vineyards.

Lazurnaya Yagoda also rents areas where Ponomarenko plans to build a chateau and some vineyards.

Experts, however, think that deal was poor value. $350 million is too much, they told Vedomosti, estimating the property at $20 million.

The issue is that tourism in the area around the Black Sea resort of Gelenzhik is nowhere near the level at the more famous centres close to Sochi, making the planned hotel business less profitable.

'Putin's Palace'

'Putin's palace' came under the spotlight at the end of last year, when businessman Sergei Kolesnikov wrote an open letter to President Dmitry Medvedev about a large complex resembling a palace that was being built on the Black Sea shore, apparently for the PM.

Medvedev has not replied.

Kolesnikov, who used to be on directors board of Sogaz insurance company, wrote that the estimated price was $1 billion and said it was funded on "corruption, bribery and theft."

If Kolesnikov's guess at the site's value is correct then Ponomarenko appears to have got himself a bargain, picking it up for barely a third of that figure.

Allegations denied

Vladimir Putin's press-secretary Dmitry Peskov said the prime minister had never had anything to do with that construction ­ not when he was president, nor when he became prime minister. He does not know anything about the deal for the land and property.

Ponomarenko called allegations that his new property was originally a Putin-sponsored retreat "rumours" and "journalistic fiction" and said the deal was done after Shamalev ran out of money to finish it.

Nikolai Shamalov, who is selling the palace, was not available for contact.

Sold because of a scandal

Kolesnikov insists that the sale was a reaction to all the publicity caused by his letter, but ultimately will not change the purpose of the palace.

"The said palace was built in Shamalov's name, and of course he could sell it to anyone. However, the main issue remains ­ where did the money for its construction come from?" he told Kommersant.

Ponomarenko admitted that there is a possibility that the media attention may have affected the owners, but was happy to cash in on any discomfort.

"Maybe all these publications affected the sellers, I don't know. Actually there is a rule to buy in a scandal and sell in good news," Ponomarenko said.

Keyword Tags:

Russia, Government, Politics - Russia News - Russia - Johnson's Russia List

Bookmark and Share - Back to the Top -        


Bookmark and Share

- Back to the Top -        

  Follow Johnson's Russia List on Twitter Tweet