The involvement of a Russian billionaire developer and his pop-star son in setting up a meeting between a Kremlin-linked lawyer and members of Donald Trump’s inner circle may have landed the father-son duo in controversy in the United States, but it doesn’t seem to be hampering their business back home. On July 13—two days after the role of Aras and Emin Agalarov in arranging the June 2016 Trump Tower meeting was revealed—Moscow’s city-planning and land commission granted approval for their company, Crocus Group, to begin constructing a sprawling shopping and entertainment complex in the Moscow suburbs.
The Agalarovs, with whom Trump partnered in 2013 to bring his Miss Universe contest to Moscow, have been paving the way for this project—literally—for several years. Their company has been involved in constructing sections of the Central Ring road, a new highway that will encircle Moscow and run through a planned Moscow city expansion known as “New Moscow,” where the recently approved mall complex will be located. In an interview last year with Kommersant, a major Russian business newspaper, Agalarov said the road contract had proved less profitable than expected, in part due to the rising cost of sand. “You could say that our hope dissolved in the sand,” he joked. But the recently approved development could make the road project pay off, easing traffic on routes near the new complex.
The development will join the Crocus Group’s chain of glitzy “Vegas” mega-malls in suburban Moscow. The original Vegas is Russia’s largest retail-entertainment complex, complete with a Ferris wheel, ice-skating rink, movie theater, and 400 stores. Agalarov said in February that his company planned to invest 15 billion rubles (about $254 million) in this new venture, which will be the firm’s fourth Vegas mall.
Much of the financing for the Crocus Group’s recent projects has come from the state-controlled Sberbank, Russia’s largest bank, which is currently under US sanctions imposed due to Russia’s 2014 invasion of Crimea. While Trump was in Russia in November 2013 for the Miss Universe pageant—which was held at a Crocus Group property outside Moscow—Agalarov organized a meal for the visiting real estate mogul with some of Russia’s top businessmen, including Sberbank CEO Herman Gref, a longtime Putin ally who previously served as Russia’s economic minister under Putin. (In 2016, Gref recommended that Putin hire his former Sberbank colleague, Sergey Gorkov, to head up Russia’s state-owned development bank, Vnescheconombank. Gorkov got the job, and in December, he met with Trump son-in-law Jared Kushner at the behest of then-Russian Ambassador Sergey Kislyak—a meeting that Kushner left off his initial application for a security clearance.)
During Trump’s 2013 visit, he entered into a preliminary deal with the Agalarovs to build a Trump tower in Moscow—a project he had been trying to get off the ground in various forms since the 1980s—as part of a Crocus Group complex. The Crocus Group later signed an agreement with Sberbank to borrow about 55 billion rubles ($1.6 billion in 2013) from the bank for a variety of new real estate projects, including the potential Trump tower. This agreement almost doubled the Crocus Group’s existing debt with the bank and was the largest real estate development loan ever made by the bank at the time.
In a recent interview with Forbes, Agalarov said Sberbank might also provide his company with the financing for the new Vegas shopping complex. “It is also ready to give us a loan for the fourth Vegas, but I haven’t yet decided, because I’m already so indebted [to the bank],” he said. “Our debt is almost $100 billion rubles.” (That’s about $1.68 billion.)
Agalarov has a reputation for taking on difficult projects on behalf of the Kremlin. In 2009, Crocus Group was selected for a government contract to build a new Far East University campus on an island off Vladivostok, in southeastern Russia, that would host global delegations for APEC 2012, a gathering of leaders from Pacific Rim countries. Putin awarded Agalarov the Order of Friendship for Crocus Group’s successful completion of the project. In 2014, the Crocus Group was handpicked by the Kremlin to construct two stadiums on behalf of the Russian government ahead of the 2018 World Cup. Agalarov said he considered turning the work down, given the short time frame and the headaches involved in constructing one of the stadiums, which is located on swampland. But the fact that the Kremlin had invited him to take on the project showed how much confidence the government had in Agalarov and his firm. “I thought about it, thought about it, but I could not say no,” Agalarov told Forbes.
Back in 2013, hooking up with Agalarov to mount the Miss Universe contest in Moscow seemed like a stroke of fortune for Trump. Here was an oligarch in good with Putin and the Kremlin. The Agalarovs’ involvement in the June 2016 meeting suggests this effort—even if the Trump camp claims it did not yield Clinton dirt—was a serious matter for the Kremlin. And for the Agalarovs, it sure wasn’t bad for business.