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. Last Updated: 07/27/2016

Agalarov Wins Major APEC Project

VedomostiAgalarov giving an interview in February. His Crocus Group will build a 500,000-square-meter university complex.��
Aras Agalarov's Crocus Group is going to build a university in Vladivostok for the 2012 APEC summit, and the state has pledged 284 billion rubles ($8.5 billion) in support for the undertaking, making it Russia's second-largest construction site after the Sochi Olympics project.

Crocus was selected as general contractor for the construction of the Far Eastern Federal University on Russky Island, two sources in the Cabinet told Vedomosti. The information was confirmed by Gennady Nikolayev, a spokesman for the far eastern branch of the government's construction agency, which is overseeing all of the summit's building projects.

Nikolayev said Crocus was presented as the contractor for the university during a Regional Development Ministry meeting on Wednesday, even though a government order had yet to be signed. The government chooses all contractors in a no-bid process for major projects for the Asia-Pacific Economic Cooperation summit, he said.

"We were invited into the project and asked to join. It's a difficult project, but we prefer difficult tasks: building on an island, massive proportions and tight schedules," Agalarov, the group's president and sole owner, told Vedomosti. He said the 500,000-square-meter development would be on a 200-hectare plot and was scheduled for completion in three years.

Initially, Agalarov was brought in as a consultant, but he offered to build the complex for less than planned by the Regional Development Ministry, a source in the government said. Under a state development project for the Far East and the Baikal region until 2013, 41.67 billion rubles is earmarked to build the university.

The university's administrative and academic buildings (200,000 square meters) will be used as conference rooms and a press center during the summit, and hotels with a combined 5,500 rooms will be redesigned as apartments for teachers and students after the summit. Agalarov must finish the complex, which will also include parking, stadiums and a pool, by December 2011, Nikolayev said.

If the company begins work immediately, it should be able to finish on time, said Alexander Ortenber, general director of Strabag's Russian unit. He said the size of the investment -- about $2,500 per square meter -- was "entirely justified," since the contractor will be required to provide decorating and furniture. A general contractor can earn about 5 percent to 10 percent on such projects, Ortenberg said.

Agalarov has been in the real estate business for more than 10 years, and his main asset is the Crocus City Mall at the intersection of Volokolamskoye Shosse and the Moscow Ring Road. It includes Russia's largest exhibition complex, Crocus Expo, the luxury goods mall Crocus City Mall and the Tvoi Dom hypermarket. The development is currently expanding: Agalarov's expansion plans include 14 skyscrapers, a furniture center and a concert hall.