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. Last Updated: 07/27/2016

$120M Retail ?City' Opens First Neighborhood

MTShoppers and gawkers checking out the new Tvoi Dom center, part of the ambitious Crocus City project, on opening day Thursday.
A disgruntled former client of the City Hall-owned Krasnaya Presnya ExpoCenter on Thursday opened the first stage of a rival center that he says will compete with ExpoCenter in both quality and price.

At the opening of the first stage -- a 45,000-square-meter, two-story shopping center -- Aras Agalarov, president of retail and exhibition firm Crocus International, said a 60,000-square-meter exhibition center would open at the same site in 1 1/2 years.

The retail and exhibition centers are part of a $120 million, 300,000-square-meter trade, exhibition and business complex called Crocus City, that the company plans to complete in 2003.

Agalarov said the Crocus City project, in Moscow region's Krasnogorsk district next to the Outer Ring Road, or MKAD, is the biggest of its kind in the Commonwealth of Independent States.

"There are many giant projects going on around Moscow, including IKEA and Metro," said Agalarov. "The most important thing that distinguishes this project is that it is Russian money, Russian brains and Russian hands. We did it all ourselves."

Agalarov said Crocus International launched the Comtek computer trade fair at ExpoCenter 1990 and was involved with ExpoCenter for 11 years. He said that ExpoCenter was the most expensive exhibition space in the world, and although his exhibition center might also be expensive, it would be cheaper than ExpoCenter, and would offer state-of-the-art exhibition space.

The Crocus City project is a joint venture between Crocus and the Central Russian division of state savings bank Sberbank. The bank has a 70 percent share in the project, and Crocus takes the remaining 30 percent.

The retail section that opened Thursday, called Tvoi Dom, is host to 200 trading companies including a Perekryostok supermarket, furniture stores, household and garden-ware retailers, car sales and a Star Galaxy games complex.

Agalarov declined to estimate the center's future annual sales, but said he expected it would be in line with Crocus' 30,000-square-meter store Tvoi Dom at the intersection of the MKAD and Kashirskoye Shosse in southeast Moscow, which opened in 1998 and has annual sales of about $50 million.

The new center has 1,000 employees, and Agalarov said the whole project may eventually hire up to 5,000 people. The second stage -- a 50,000 square-meter shopping mall with exclusive boutiques -- is due to open early next year. Agalarov said the completed complex would feature a dock for yachts and a 250- to 300-bed Marriott hotel, but Marriott Hotels said it had no information on Agalarov's plans.

Crocus International was founded in 1989 as a Soviet-American joint venture specializing in sales of computers and consumer electronics as well as clothing and footwear. After launching Comtek, the first computer and networking trade fair in the CIS, it continued to expand its exhibition program and by 1997 had 10 trade expositions, according to the company. Agalarov said Crocus is now 100-percent Russian-owned.

"From 1990 to 2000, Crocus International organized more than 70 international trade exhibitions in Russia that welcomed more than 12,000 participants and 2 million visitors," says the company's promotional materials.

Agalarov said Crocus has 12 years experience of running exhibitions, but after the 1998 financial crisis it had decided that it would not be profitable for his company to continue at ExpoCenter, located in central Moscow.

"Even before that we knew that Moscow needed a modern exhibition center of a world standard," he said.

Crocus last year sold its exhibition business to ITE-Moscow, part of London-based International Trade & Exhibitions (ITE) Group PLC.

No one was available for comment at ExpoCenter.

Vedomosti newspaper this year quoted City officials as saying ExpoCenter currently hosts more than 60 exhibitions and fairs a year, at which more than 15,000 firms participate. According to reports, the 65,000-square-meter center is extending to 80,000 square meters.

Last year, the city government adopted a plan to increase high-quality exhibition space in the city from 145,000 square meters to 400,000 square meters. Other exhibition centers in the city include World Trade Center Moscow, the All-Russia-Exhibition Center and Sokolniki Exhibition Center.

Yan Belayev, marketing manager for ITE-Moscow, said in a telephone interview that Crocus sold it the management rights to more than 10 annual trade fairs, including Comtek.

He agreed with Agalarov that the ExpoCenter was prohibitively expensive for some exhibitors and said it had a monopoly on quality exhibition space.

The development of an alternative exhibition center at Crocus City could boost the exhibition business and lead to the raising of standards.

Natalya Oreshina, retail consultant with Stiles & Riabokobylko, the Moscow-based associate office of Healey & Baker, said Crocus City is in a good location and easily accessed from Strogino, Mitino and Rublyovskoye Shosse, which are among the capital's wealthier neighborhoods.