Thread: Trump Wanted $20 Million for 2006 Moscow Deal, Developer Says Bloomberg

Trump Wanted $20 Million for 2006 Moscow Deal, Developer Says

Stephanie Baker
,Bloomberg•February 6, 2019

(Bloomberg) -- Donald Trump’s dream of putting his name on a tower in Moscow came with a hefty price tag: $20 million.

Trump demanded that non-negotiable fee in 2006 from a Ukrainian-Russian named Pavel Fuks, who made his fortune in oil trading, banking and real estate development. Fuks, who says he’s been barred from entering the U.S. and is embroiled in a dispute over money he spent to attend Trump inaugural events, spoke about the early Moscow negotiations in an interview with Bloomberg News in a Kiev office with a team of armed security guards stationed outside.

Fuks said he hosted Trump’s children, Ivanka and Donald Trump Jr., in Moscow in 2006 to discuss the project after meeting with the elder Trump several times in the U.S. By his account, Fuks offered to pay Trump $10 million in installments, but Trump demanded $20 million up front for the right to use the Trump name on a Moscow development.

“He said $20 million is nothing,” Fuks recalled. “I said, no, it’s a lot of money. We couldn’t agree.”

A representative of Trump’s company, the Trump Organization, didn’t respond to emails and phone messages.
Moscow Skyline

Fuks, whose account couldn’t be independently verified, provided an insider’s view on Trump’s three-decade quest to stamp the Moscow skyline with his famous name. His organization’s aggressive and persistent efforts to do business there have taken on new significance as Special Counsel Robert Mueller investigates potential ties between the Trump campaign and Russian interference in the 2016 presidential election.

Fuks’s description, which differs from some earlier reports on the effort, indicates a more extensive deal proposal than has been previously understood, pulling in Trump family members and one of their significant business partners in Trump SoHo. Fuks says he was introduced to Trump by the late Tamir Sapir, a Soviet-born American who shepherded Russians into the New York development around the same time.

Trump made other attempts at a Moscow tower, notably in 2015 and 2016 while he was running for president. In that deal, he was willing to accept a $4 million upfront branding fee and a cut of profits, according to the 2015 letter of intent signed with I.C. Expert Investment Co., a Russian development firm.

Michael Cohen, Trump’s former lawyer, pleaded guilty in November to lying to Congress about the 2016 proposed Moscow venture. Cohen had told the Senate that the project was scrapped in January 2016 when negotiations had continued for months afterward, a false statement he said he made in order to be consistent with Trump’s repeated disavowals of any Russian business ties.

Trump’s first attempt at a Moscow development came in 1987, when he visited Moscow to scout sites for a luxury hotel, according to his book, “The Art of the Deal.”

“I was impressed with the ambition of Soviet officials to make a deal,” he wrote.

The project fizzled, as did a 1996 foray into Moscow. In 2013, Trump also discussed plans for a Moscow tower with Russian developer Aras Agalarov when he visited the Russian capital for a Miss Universe pageant.

Rekindled Connection
Fuks, who was born in the Ukrainian city of Kharkiv, built up a Moscow real-estate empire under Moscow’s powerful post-Soviet mayor. He’d shed those assets and relocated to Ukraine by the time he attempted to rekindle his connections with Trump after the U.S. election.

He traveled to Washington to attend events around Trump’s inauguration, looking to hobnob with power brokers. Fuks said he didn’t get to meet Trump then or attend any official inauguration events. In fact, he says he failed to receive such invitations, though he’d paid $200,000 for them to a Ukrainian-American businessman, Yuri Vanetik. Fuks says he’s hired lawyers to recover the money.

Vanetik, in a statement, said he’d referred Fuks to a public relations firm that would organize his visit. Fuks misunderstood what was being offered, Vanetik said, and “became confrontational” when he felt shortchanged.

More recently, Fuks has had trouble getting into the U.S. He says he was stopped and questioned by Russian-speaking federal agents about his business interests and his past when he tried to enter the country in December 2017. He was barred from entry, despite several visits earlier in the year, he said.

"They did not let me in and began to ask some nonsense questions like are you Russian military?" he said. He told them he was not and is now applying again for a U.S. visa.

Trump SoHo Links
Fuks said he was introduced to Trump in 2005 by Sapir, who struck it rich in New York real estate and had an apartment in Trump Tower. Fuks and Sapir knew each other from selling petroleum products from a Moscow refinery. Trump and Sapir were business partners in the SoHo project, a hotel-condominium development.

Fuks and Trump met several times in 2005, first at Trump Tower in New York and later at Mar-a-Lago, Trump’s resort in Palm Beach, Florida, Fuks said. Trump tried to sell Fuks on the idea of a mixed-use tower in Moscow -- a hotel, offices and apartments managed by a single company.

The Trump Organization pitched a similar model to developers around the world, including in Istanbul and Toronto.

Trump was late to a January 2006 meeting, and Fuks ended up drinking tea with a pregnant Melania Trump and her father, he recalled. When Trump finally arrived, they all had dinner and discussed the project at length, Fuks said.

Later that year, Ivanka and Don Jr. traveled to Moscow to inspect the site and listen to Fuks’s presentation. They had lunch at a Ukrainian restaurant, Fuks recalled.

“I told them my conditions, and they said they would think about it,’’ Fuks said. “I offered him $2 million up front and a million each month during the year.”
Trump declined, Fuks said.

‘Prefer Moscow’
Fuks’s project appears to be one of several in Moscow the Trump organization was considering at the time. In a 2008 interview, Don Jr. said he’d traveled to Russia half a dozen times in the preceding 18 months to discuss unspecified deals.

“I really prefer Moscow over all cities in the world,” Don Jr. said in the interview with eTurboNews. “Several buyers have been attracted to our projects there.”

Based on Fuks’ account, Don Jr. and Ivanka may have visited Moscow at least twice in 2006. Besides their visit with Fuks, they also traveled to Moscow on a trip arranged by Felix Sater, who worked with Trump and Sapir on the Trump SoHo project and who was negotiating to build a Trump Tower on the site of an old pencil factory on the Moscow River. Fuks said he didn’t know Sater and that his proposed Trump project was on the other side of the river in Moscow City, then a new high-rise business district under development.

Fuks said the last time he saw Trump was 2009 or 2010 in Miami, where Fuks’s first wife owns a home. He said he went to a big party Trump was hosting in Palm Beach, but they didn’t discuss the Moscow project.

“At that point it was already the financial crisis and prices had fallen,” he said. “It was no longer interesting.”

Economic Sanctions
Fuks’s relationship with Russia has soured, too. At the end of last year, Russia slapped economic sanctions on him and more than 300 other Ukrainians -- retribution for Western sanctions against Russia. Fuks said he’d given up his Russian passport and is now concentrating on his investments in Ukraine, where he said he owns energy and real estate assets.

Besides the sanctions, Fuks said he’s facing legal problems in Russia, with authorities pursuing what he says are decade-old cases against him. “My lawyers are fighting them,” he said.

https://news.yahoo.com/trump-wanted-...c=bell-brknews

In 2006, Russia was wide open for investors and businesses as Moscow boomed in the post Soviet era. Trump was a global real estate investor just like all the other investors smart developers that were looking for deals in the former Soviet Union. I was in Moscow in 1992 and saw the way the people had been forced to live for 50 years and everything was worn out and broken.

Moscow's boom
Building a new Rome

What Moscow's property boom reveals about Russia's uneven, breakneck growth

Print edition | Europe

Aug 24th 2006| moscow




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“MY MOTHER”, says Oksana, an accountant, “is really happy for me.” Her parents lived most of their lives in housing provided by the Soviet government; she and her husband have just moved into a two-bedroom apartment on the edge of Moscow. In 2003, they agreed a $60,000 price for the flat, then under construction; now it is worth $240,000.

Where it isn't a traffic jam, Moscow is a building site. The construction crane is now the city's emblem, the racket of drills its anthem. There is a similar din in many Russian cities, but it is loudest, and the price rises are steepest, in Moscow. According to IRN.ru (site in Russian), a market analyst, residential property prices have almost doubled in a year. Muscovites have become as obsessed with property prices as Londoners. Ira, who works in publishing, is selling the apartment that she bought for $100,000 in 2002 for five times as much. Residential rents are stratospheric; office costs are among Europe's highest.

Despite all the cranes, there are too few new buildings or revamped pre-revolutionary ones for all the money chasing them (few moneyed Russians want to live in anything Soviet). And Russians are just learning about mortgages. Igor Kouzine of DeltaCredit Bank, Moscow's first mortgage lender, says that, although the number of borrowers doubles every year, only 5-8% of purchases are backed by mortgages. Most buyers pay cash.

Not so long ago, many Muscovites lived in grotty communalki, or communal apartments, sharing bathrooms and kitchens. The property boom is a symptom of Russia's economic resurgence, and of the growth of its middle class. But as with Russia's breakneck development as a whole, the rush has losers and victims too.

Earlier this month, Russia's prosecutor-general instigated a probe into price-fixing among Moscow construction companies. The politicians, understandably, feel obliged to so something. The average monthly wage in Moscow is officially only around 17,000 roubles ($630); elsewhere, it is less. A big chunk of the population has been left behind by the new prosperity. Vladimir Putin, Russia's president, has made the provision of affordable housing a main priority.

“Impossible”, says the Moscow city government of the price-fixing. Perhaps; but other kinds of graft are rife. An investigation by a newspaper found that more than 10% of the cost of a new apartment went on bribes. “That's too low,” says Alexei, a contractor. The huge number of permits, plus legal gaps and contradictions, create endless possibilities for obstructions, delays—and kickbacks. Some claim that the city is not always impartial in its allocation of projects. Others note that the wife of Yuri Luzhkov, Moscow's mayor, co-owns one of the city's biggest construction firms.

As usual, the police are in on it too. Of the million-odd people in the Moscow construction industry, many of those labouring on the city's 4,500 building sites are immigrants. “The Tajiks are the best,” says Alexei, because they work hard for little money and don't drink. They may live in on-site barracks, surviving (says one) on potatoes, bread and macaroni. Because they often work illegally, they are vulnerable to harassment by corrupt police, mistreatment by employers, and collusion between the two. Oksana the accountant's happy story had a sad twist: the Moldovans who were living in her apartment while they decorated it paid a share of their wages to crooked policemen.

There are indigenous losers too, let down by suborned courts or hazy, outdated property laws (“in our country,” Alexei says nervously of property rights, “everything can change”). The village of Butovo, on Moscow's southern edge is a wonky Russian idyll of rickety fences, rusty roofs and fruit trees. Tatiana Kupolova lives in the house her family built in 1934, when many Muscovites were relocated under Stalin's violent urban redesign. But the city has reached Butovo: high-rise buildings overlook Ms Kupolova's plot, and the planners want another. In June, riot police turned up to enforce a contested removal order. “They beat everyone,” she says. The authorities, she claims, told her that she was “nobody, you have no chance.” She has written to Mr Luzhkov and Mr Putin, but they haven't answered.

In the city centre, a common ruse is to have buildings condemned, then replace them with lucrative new ones or dubious replicas of the originals—bad news for anyone who happens to live in them. Emilia Souptel and her mother, who have lived in an historic building since 1974 and opened a restaurant in it in 1989, are battling (perhaps related) threats of condemnation and a developer's plans to build luxury flats at their address. Ms Souptel beat the developer in court—“a miracle”, she says—but she now fears extra-legal methods. “Silence doesn't mean peace in Russia.”

Architecturally, says David Sarkisyan, of the Shchusev State Museum of Architecture, the result is a glass-and-steel city, becoming “more and more spectacular, but more and more ugly.” Classy modernist buildings, as well as older ones, have been torn down, not all as unlovely as the giant Rossiya hotel now being demolished next to Red Square. Today's ruling class, says Mr Sarkisyan, is as uncultured as were the Bolsheviks.

Still, things are better than they were in the 1990s, when apartment-related murders were common. A new law is intended to protect homebuyers from fraud: thousands have handed over deposits, only for their apartments to stay unbuilt or be sold to others. A protest by defrauded buyers was broken up by riot police in May; the city promises to compensate them. “It was a big risk,” says Oksana of her own investment, but now “I am very proud”.
https://www.economist.com/europe/200...ing-a-new-rome

Real estate boom grips Moscow	PRINT FRIENDLY	EMAIL STORY
Correspondents Report - Sunday, 7 August , 2005 Reporter: Emma Griffiths HAMISH ROBERTSON: Something that would have been unthinkable in the days of the old Soviet Union is now gripping Moscow – a real estate boom. The cost of city properties has reached astronomical levels, with apartment prices rivalling New York's Park Avenue, and the ritziest areas of London. Developers can barely keep up with the demand for elite accommodation. But away from the high-end of town, many ordinary Muscovites are still living in communal apartments, or struggling through a mortgage system still in its infancy. Here's our Moscow Correspondent, Emma Griffiths. EMMA GRIFFITHS: Moscow is a city of apartment blocks. Tower after tower of Soviet era construction rises up through the suburbs. They house most of Moscow's 13 million residents. In Soviet times, the good apartments with plenty of space and maybe even a view were saved for loyal Communist Party apparatchiks and the people who did them favours. Most ordinary Muscovites lived in communal apartments. Several families shared one kitchen and one bathroom. Many here still do. Galina was born in Moscow and lived in a communal apartment for 40 years. She remembers that time with affection. "We had a large, gorgeous apartment on Arbat 23," she says. "Even if you look at the exterior you can tell that it was a studio of famous art restorers and Moscow's best cameraman lived there, too. "Our house was very nice, I knew all the people and we had lots of visitors." Just three years ago she was finally able to move into her own apartment. The communal building was bought by an investor keen to make the most of Moscow's booming real estate market. Every spare block in Moscow seems to be a construction site, and they're not building old-style communal apartments either. For a year and a half I've watched an 11-storey apartment block go up outside my office window. It's nearly finished, and now banners hang off the front façade, advertising its high quality accommodation. The top floor is a penthouse with outdoor eating areas. These are apartments for Moscow's elite. Real estate agents say that's where the real growth is. But they insist there is plenty of housing for ordinary Muscovites too. Igor Ladychuk from one of Moscow's largest agencies says it just comes at a cost. "I think the system is quite good, he tells me. "It's a standard market situation like in any other civilised country. A person, having a certain amount of money, can buy an apartment. The housing market in Moscow is developing well. The prices go up on average by 25-30 per cent annually. It's quite a growth. Igor Ladychuk mentions new country houses – or dachas – selling for at least $100,000, at most several million. These are certainly out of reach to most people here. He says these dachas and new apartments are bought by Moscow's middle class – educated people who earn at least $2,000 a month. Many Muscovites still dream of a salary like that. Marina's experience is more common. She lives with her son in an apartment with a kitchen and two other rooms that double as bedrooms and living areas. She bought it with a mortgage – still a new concept in Russia. "It's very difficult to pay it off in one go," she says. "I've passed through that myself. I know how tough it is, but it so happened I had good employers who helped me buy the apartment. They lent me money, and I paid it back." Marina believes – as do many Russians – that the Government should help. Anatoly is in his 70s and leans on a walking stick. He says he's lucky because he was given an apartment during Soviet times. He says now everything in Russia revolves around money, and he has only contempt for the Government. "The Government refuses to do anything. Everyone dies alone. The Government takes no care of the working people." His generation worries about their children and grandchildren, living in a Moscow far different to the city they grew up in. This is Emma Griffiths in Moscow for Correspondents Report. http://www.abc.net.au/correspondents...5/s1431473.htm

Economy hits building boom
By - The Washington Times - Monday, October 13, 2008
MOSCOW

Moscow’s decadelong building boom is falling victim to the global credit crunch as record high interest rates squeeze developers in the world’s third-most expensive property market.

“Loan rates have climbed to ridiculous heights, and the terms are very short,” said Dmitry Lutsenko, a board member at Mirax Group, the Moscow-based company that’s building the city’s Federation Tower, which will be Europe’s tallest tower when completed in 2010.

Mirax canceled plans to develop 108 million square feet of commercial and residential space after interest rates on some loans rose to as high as 25 percent, Sergei Polonsky, Mirax’s billionaire owner, said in an e-mail Monday.

The company’s Web site shows it has projects in countries including Russia, Ukraine, France, Turkey, Cambodia, Vietnam and Montenegro.

Moscow is now the world’s third-most expensive location for residential property, after Monaco and London, according to Global Property Guide.

Higher borrowing costs already are crimping demand for apartments, said Oleg Repchenko, head of Real Estate Market Indicators.

In 2009, prices may fall for the first time in 11 years, according to the Moscow-based research group. For some types of apartments, they may be down by as much as 30 percent by the end of the year, Mr. Repchenko said.

“Liquidity risks associated with Russian property developers have never been higher,” Julian Crush, an analyst at Fitch Ratings, said in a report Tuesday.

The collapse of the U.S. subprime-mortgage market and subsequent global credit crunch has forced smaller Russian developers onto the sidelines, said Avni Akvardar, vice president of St. Petersburg-based Renaissance Development, whose projects include a 6 billion ruble ($239 million) shopping mall in Novosibirsk, Siberia’s biggest city.

“Banks have certainly curtailed lending in Russia,” said David Geovanis, managing director at London & Regional Properties in Russia, which has invested more than $702 million here since 2005.

London & Regional won’t halt any projects in Russia because it already has financing from banks including state-run OAO Sberbank, Russia’s biggest, Mr. Geovanis said. The company’s projects include shopping malls in Penza and Kaluga in central Russia and hotels in Novosibirsk, Omsk and Rostov, he said.

“It will be tougher for new entrants and smaller developers,” Mr. Geovanis said. “But banks will continue to back large companies with good credit histories.”

https://www.washingtontimes.com/news/2008/oct/13/economy-hits-building-boom/

3/17/17

Russian elite invested nearly $100 million in Trump buildings

1/12/18

Russian 'birth tourists' are flocking to Miami, and Trump condos, to give birth to American citizens

Originally Posted by Newmexican

. . . Moscow is now the world’s third-most expensive location for residential property, after Monaco and London, according to Global Property Guide. . .

As foreigners move in, Miami real estate is so expensive that locals are moving out