New apartment buildings in Moscow
Last year, Russia Blog wrote about Moscow's astronomically-priced real estate market. This month, the Discovery/New York Times Channel series Super Homes is showing American TV viewers a glimpse of this bizarre world, where anonymous people buy multimillion-dollar properties with grocery sacks full of cash (one grocery sack can hold about $200,000).
The first character we meet for our education in New Russian excess is Phil Bogdanov - real estate agent to Moscow's super rich. Like many Russians who came of age in the perestroika years, Bogdanov found himself in 1991 with an education but not many connections or opportunities to make money at home, so he emigrated to the United States. In the U.S., Phil worked various low-wage jobs in restaurants and other businesses until he found his true passion: real estate. Phil married an American real estate agent and brought her back to Moscow during the go-go 1990s. This was the era - Phil's wife explains on camera - when fifty Moscow businessmen would pose for pictures toasting their entrepreneurial success. Six months later, she says, half of them would be dead, the victims of business murders.
During this transition, prices for Moscow apartments and office buildings were still officially fixed by the state, but the real value was determined by negotiations and paid in cash. Even today, with the Kremlin trying to return capital to Russia, Moscow's millionaires and billionaires must remain discreet.
New homes for New Russians
We watch Phil as he meets his client Farina, the beautiful wife of an anonymous businessman. They converse in American-accented English as Phil shows her a penthouse atop a high rise gated office complex, with stunning views of Christ the Savior Cathedral on the Moskva River. Phil's asking price: only five million U.S. dollars, for perhaps 1200 square feet. Farina tells Phil that it will cost her at least another million dollars and several months to replace the cheap kitchenware and floors and replace them with worthy wooden and marble furnishings -- all of this before adding the costs of electronics and furniture and 24-hour security/concierge services.
After this meeting, Phil talks to the camera while riding in the back of his chauffeured BMW, "In the 1990s, there was no legal path, so whatever you did, you were probably breaking the law." Phil's wife compares Russia today to the Wild West in the 19th century, where people went "with no insurance, no guarantees, just determination" to make their fortunes. Phil and his wife are constantly accompanied by bodyguards, and own a security company, several coffeehouses, and a Moscow franchise of Hertz Rent-a-Car. Phil talks about how the ownership rights for the buildings he lists don't exist, because officially, the apartments he is selling do not appear on any government tax records, and his clients are only buying the rights to develop a concrete shell. "So what am I selling?" he asks, then answers his own question "Air."
We are shown how valuable air in Moscow can be when Phil surveys an open field primed for development, with direct views of the Kremlin. Phil wants to develop the entire site as luxury apartments, but some powerful businessmen are interested in building a complex of shops there instead. It's no wonder Phil looks nervous standing out in the open, even with his bodyguards nearby.
Another expensive view - facing Luzhniki Stadium and Moscow State University
Next we see poor nervous Phil pleading for the camera to be turned off before he can show the unfinished interior of an apartment building to a client. One angry resident who wishes to keep anonymous comes out of his apartment to yell at Phil for being accompanied by a film crew. At another point, Phil wants to show an unfinished building to the camera crew, only to be rebuffed. "Did you forget to bribe the cops?" he angrily asks one of his business partners, on camera.
The real action begins when Phil goes to a party being put on by the billionaire oligarch Vladimir Bryntsalov, to try to find more clients. Bryntsalov's people ask Phil if he can help the pharmaceutical magnate buy an island in the tropics, and Phil says that he will look into it. Phil whispers to the cameraman filming one distinguished gentleman at the party, "This is [Alexander] Veshnyakov - everyone likes him, because he counts the votes." Alexander Veshnyakov currently serves as Chairman of the Central Election Commission of the Russian Federation.
Vladimir Bryntsalov interviewed on NTB television
Bryntsalov invites the camera crew to his corporate estate in the Moscow suburbs, for a tour of the pharmaceutical tycoon's home. Bryntsalov has placed one of his homes somewhere inside the sprawling office complex to make it more secure. Here is just one of the places where the 60 year old oligarch lives with his second wife, more than twenty years younger, and their two children.
Bryntsalov owns Ferein Pharmaceuticals and is a member of Parliament
Our tour begins in the largest room, a cavernous indoor gym with a tennis court adjoining a swimming pool. Bryntsalov points to the quarters for his kids and separate rooms where his wife keeps her wardrobe. Then he takes the crew to upstairs to film his wardrobe, featuring dozens of $10,000 suits and hundreds of $1,000 French and Italian shirts embroidered with his name.
The climax of this bling-bling parade comes when Bryntsalov shows off his "country home" outside Moscow. This is the palace where he throws lavish parties hosting politicians (including President Putin and Mayor Luzhkov) gorgeous models, actresses and various discreet businessmen. The exclusivity of these parties is secured by a small army of bodyguards, who aggressively patrol for uninvited guests for several miles around the estate. The most spendthrift hosts in Martha's Vineyard and Beverly Hills have nothing on this guy.
Bryntsalov is a big back-slapping man, and he jokes to the camera crew about how he was kicked out of the Communist Party in 1979 for "bourgeois tendencies". "Like Judas, I sold my faith for material gain. The Party wanted me to live for the People, but I wanted to live for myself." he says with a grin. Then he grabs the handle on his shower, repeating "Rolls Royce! Rolls Royce!" while opening the sparkling glass door. Then he says: "Some people would ask: why spend $18,000 on a shower?" - but for Bryntsalov, the question clearly is: why not? After leaving the bathroom and bedroom quarters, the camera follows Bryntasalov as he walks past an Israeli-made assault rifle lying on the table in the hallway.
The "country house" boasts 54,000 square feet of gold leaf, 30 kinds of marble, and 100 separate fine handmade Persian rugs. Stained glass windows from Tiffany filter natural light onto the gold-leaf chamber. Artwork painted on the ceiling in the style of the Sistine Chapel depicts Bryntsalov's family as classical figurines, including his 2nd wife Natalya as a bare-breasted goddess and their children as half-naked cherubs. Besides his renowned parties, his seat in the Duma, and his gadfly runs for the Presidency, Bryntsalov is known to Russians for once slapping his young wife's rump on national television, boasting "Like a racehorse - that's how a Russian woman's ass should be!"
Super Homes Moscow concludes with by showing us the Balekovs, a newly prosperous Moscow family. The Balekovs are searching for a modest house in the Moscow suburbs - a dream very familiar to many Americans. All Olga Balekov wants to find is a house with a bathroom window. The Balekovs find a house with not only a bathroom window, but a bathroom with a French balcony, that is supposedly modelled after one of Peter the Great's country palaces. All of this is secluded behind many trees and billboards asking New Russians, "Do you want to live in the forest?" The price for this middle class American dream in Russia? $2.5 million - cash. For today's Moscow suburbs this is a steal, in spite of the fact that the place is an empty concrete and wooden shell with no wiring and an empty elevator shaft.
In the end, the nice middle class family opts not to buy the house, returning to their three bedroom apartment in Moscow, which they consider "a palace". In the early 1990s, before Olga Balekov's career as a fashion designer took off, the family shared 400 square feet with several other families in a collective apartment bloc. Now those old friends are all gone, because they have not shared in this couple's prosperity.
In many ways, this seems to be a good metaphor for where Russian society is today. If Americans could watch this special, they would learn more about Russia in one hour than they could from reading countless articles from D.C. think tanks about Putin and the Kremlin.
To be fair, some of the oil and gas wealth flowing into the Russian economy has trickled down in the last few years, and average wages are up by one third across the country. But for most Russians, the cost of a place a middle class American would consider decent in Moscow remains totally out of reach. To be certain, Moscow is a vast sprawl of 14 million people, many of whom are poor. But for ordinary Russians and Americans alike, these parts of Moscow must seem like a strange world, where exotic gazelle-like women are guarded by muscular bodyguards driving up-armored Beamers -- a mushroom cloud of materialism. For ordinary Russians from the regions, this Moscow might as well be on another planet.
Some homes listed for sale in the Moscow suburbs - no credit cards or checks accepted, just cash.