BUSINESS HABITAT: Moscow too Small for Celebrities

Famous Frenchman Dominique Perrault has designed the new building for the Mariinsky Theater in St. Petersburg; the winner of the prestigious Pritzker Architect Prize, Zaha Hadid, is behind the design for a Capital Group residential estate, while another Pritzker Prize winner, Dutch architect Rem Koolhaas, designed city offices for the firm Krost. Dutch designer Eric van Egeraat is the author of four projects for Capital Group and is now involved in a project in Surgut.

Modern architectural aesthetics deserve to take the place of the creations of the Soviet-era five-year plans. Aesthetics aside, and concentrating on business as such, it may seem difficult to fathom the true motives that drive the developers. Is it really worth spending huge sums of money on celebrities to better market one’s product?

After all, developers are not trying to inculcate in Muscovites a taste for the beautiful. For them, the presence of a star architect in the project is a great marketing move, a chance to sell a beautifully packaged product at a profit.

A co-owner of a well-known Moscow development company describes the infatuation with famous architects as a kind of showing-off, not a marketing policy. His company has never hired western architects for its projects, preferring to use local designers.

Eric van Egeraat does not conceal that his projects cost investors about 30% more than those of other architects. Capital Group has already encountered that problem and decided to alter the project Gorod Stolits (The City of Capitals) by van Egeraat.

The architect’s plan envisaged the development within Moskva-City of two high-rise towers made of cubes overhanging one another. As the most ambitious project of Moscow City Hall, Moskva-City is, indeed, worth such architectural creations.

However, the city government then hired a U.S. design bureau to rework the project, apparently, seeking to reduce the cost of construction. Russian architects say that the revised project proposed by their U.S. colleagues would have no cubes whatsoever. The celebrity architect’s handwriting has been effectively erased, but everyone knows that van Egeraat was personally involved in the project.

Western architects and their Russian colleagues belong to different schools. Westerners begin with designing the exterior of the building while Russians start from the inside. The quality of a development in Russia is judged more by its functionality than outward appearance.

But not everyone shares that view; investors in oil-producing Surgut have decided to hire Eric van Egeraat to design a shopping center in the city and the maestro has accepted the offer.

After all, the architects themselves earn considerable dividends by working with Russian investors, and not only in the form of fees.

Any top architect taking up a project in Russia is guaranteed publicity and attention among his colleagues. Thus, Eric van Egeraat has benefited from his work in Russia no less than Capital Group who hired him. In the eyes of many, the architect is, first and foremost, an artist and only then a businessman.

The Surgut-based company SKU (Specialized Open-Cast Directorate), with a 10-year record of road and engineering systems construction, is set to splash out $40 million on the development of a shopping mall designed by one of the world’s highest paid architects.

SKU decided that the city’s first state-of-the-art shopping mall should have the best possible design. Such investors deserve applause. Upon hearing the news from Surgut, Moscow real estate companies joked: there are smart managers everywhere and Surgut is no exception.

Really smart managers know that a high-quality architectural design automatically boosts the value of a finished development. With time, consumers will have to learn to pay extra for aesthetics, or else, developers will fail to secure payback on funds pumped into projects designed by the celebrities of the architecture world.

If we are being perfectly honest, had anyone ever heard of SKU from Surgut before? Today, the whole Moscow real estate market knows the name. This is what being famous is all about…