Blog

Adler Rentals

2012-05-19T07:23:11Z

The rental process for workforce accommodation in Sochi is not simple and should not be undertaken without consulting and having legal support from a qualified attorney. There are cautionary tales...

This week we have been working on an accommodation contract for a western company relocating a number of employees to Sochi through the Games. We are offering our "homefinding services" which include preliminary discussions on price, location and desired features, preselection, advice, showing apartments, negotiation of price and lease terms, as well as preparation of the lease and visa registration.

We showed a number of apartments through real estate agents to employees. A preliminary agreement was reached on Tuesday for a new apartment on Kirova street. All appeared to be on track and we forwarded the lease to the agent. At the meeting to sign the lease, the employee and his wife expressed concern about the water, which they had heard could be shut off for extended periods and that the cable television was not working, despite being told by the agent it would. The leasing agent, who represents a number of owners in this building, suggested angrily that they could look elsewhere.

Then she retutrned the lease with the passages relating to protections on rental increases and time frame crossed out, saying that the owner could increase the rental price at any time. This was a surprise and our attorney pointed out that employees were given a fixed rental budget. Since the price agreed upon was slightly above market, it was good for the owner, too. and the employee and his family could not afford to be tossed out if the rent demanded exceeded their budget.

It was clear that the tenant would be faced with rent increases at any time. The agent was motivated because she is paid her fee every time the apartment is rented to a new tenant. And with a tight and very uncertain market, there was no doubt of her plans.

The conclusion was a loud tirade from the agent. Word quickly spread to the other employees and we and the firm both decided to have no further dealings with this agent. And in a self-serving manner, we have subsequently realized that this particular agent is attempting to poison the water by suggesting other agents and apartment owners do not work with our client, a reputable international company that seeks binding two year leases.

The angry and unprincipled behavior shocked both Russian and our client. We have her name on file and will make sure that all of our customers are warned away from doing business with her. Fortunately, we found another suitable apartment and the employee signed the two year lease required by his company.

Incidently, a foreign employee of another firm rented a home without our services our any legal advice on the contract. This employee signed an unfavorable lease and has no protection against indiscriminate rental increases. This agreement will almost certainly not conclude well. We think that renters without good leases or protection will be forced out before the Games, assuming that rental rates rise. With housing in short supply and long, slow commute times from other areas, this will be a disaster for some.

Any foreign individual or company must have impartial advice and legal representation renting property in Sochi. legal service must be local to negotiate and conclude the lease. A long distance attorney is usually much more expensive and requires more time, with less local knowledge.

Friday, we came to an agreement with another agent. The employee knew events related to the other employee and immediately deferred all questions on the lease term, other than price to our attorney. Although he works for a foreign company, he is Russian and still felt he needed our legal support.

Tom Kehoe, American Expert On Food Distribution, Visits

2012-05-12T11:12:32Z

Tom Kehoe of K & B Seafood and Seaflight Logistics with Nanouly Bigvava (center) owner of the Mandarin Cafe in Sochi

Tom Kehoe, the Chief Executive Officer of K & B Seafood and Partner at Seaflight Logistics, both of New York, visited Sochi with a group of foreign executives, including an official of a French seafood firm, and several from one of Russia's leading seafood distribution firms. Mr. Kehoe has enjoyed a long career in the seafood distribution business. His business was built in New York City, one of the most competitive and innovative business environments in the world, and it has grown to shipping products to every time zone in the world.

Mr. Kehoe got involved in the seafood distribution business in the United States in the 1970's, when he began shipping Maine lobsters to New York. Mr. Kehoe and his firm have been successful in New York, despite the logistical difficulties of distributing expensive and highly perishable food items in a large and congested city to an exacting and sophisticated clientele. With Mr. Kehoe founding K & B Seafood, his business grew to other seafood products and K&B took on the role of supplying Alaskan seafood to the New York market and eventually supplying seafood nationwide. Among their specialities, K & B feature crab, scallops and other shellfish, including more than 50 varieties of oysters. In recent years, he and K & B have expanded internationally and now their products are distributed in Russia and to many of the nation's finest restaurants.

The understanding of the complicated processes of moving perishable cargo from remote locations through customs and to multiple destinations through congested traffic led him to found Seaflight Logistics in 2009. The company is a freight forwarder and specializes in the global logistics of perishables.

Mr. Kehoe's interests and career is not limited to food distribution, he also serves as a Trustee of the Village Board of Northport, New York, a bucolic and affluent town on Long Island. He is Commissioner of Commerce, where he works with the business community and also Commissioner of Sanitation, where he is responsible for the policy and budgets of the waste water treatment facility. Mr. Kehoe is a member of the world-famous New York Athletic Club, founded in 1866, and known as "the world's greatest athletic club'. The NYAC has sponsored hundreds of prominent athletes, who have cumulatively won hundreds of medals at Olympic competitions, including 7 gold medals (13 overall- more than most nations!) alone at the Beijing Summer Games and who have won scores of national championships in boxing, wrestling, track and field, rowing, fencing and other sports. Mr. Kehoe's participation does not end at the sideline though. He was a competitive swimmer, is a surfer and holds two 3rd Degree Black Belts. Two of his daughters were elite fencers and one is now the coach at the NYAC, where one of his sons is a heavyweight boxer.

Mr. Kehoe's background gives him an understanding of the challenges faced in moving people and products. He knows how to work effectively with city, state and federal officials and he has a strong background in sports. All of this drew him to Sochi, where we talked about some of the challenges that Sochi will face as the Winter Games approach. First, he expressed delight at the verdant beauty of Sochi, saying that when he got off the airplane, he did "not expect to see palm trees in Russia!" and then spoke about the scale of construction here. I asked him what his approach would be in moving people and perishables during the Games. He told me he is "am acutely aware of what congestion does to perishables, schedules and the movement and safe passage of our most precious commodity, people" and that his firm "has staff entirely devoted to these issues" He went on to say that working with the administration here in Sochi will be crucial to make sure that planning is complete. He said that an understanding of the needs of local business will be required to satisfy the visitors' expectations. We talked at length about challenges he has faced and novel solutions that Seaflight has developed in multi jurisdictional shipping and distribution.

Since Mr. Kehoe returned to New York, we have spoken by telephone and he has expressed interest in the potential in Sochi, even suggesting to an institutional investor to travel to Sochi to investigate the possibilities of hotel development. He sees what I do: a city on the cusp of developing into an international and year-around destination.

Victory Day In Sochi

2012-05-09T11:47:42Z

Today, May 9, Sochi observed Victory Day, the day of the defeat of Nazi Germany in 1945. A moment of silence was observed at the central memorial. Sochisiders spent the day in the parks, at a concert on Administration and on the streets. The cafes and restaurants have been filled all day with families and parties as people celebrated the beautiful weather and the victory won at incredible costs.

I met Sochi Mayor Anatoli Nikolayevich Pakhomov near Riviera Park at a celebration honoring some of the city's surviving veterans of what is known as the Great Patriotic War.

Sochi Mayor Anatoly Pakhomov and Veterans

May Sochi Rental Summary

2012-05-07T08:33:08Z

The residential rental market in Sochi's Adler District (home to the Olympic Park) continues to tighten. We are working with several companies renting apartments and are seeing a rapid absorption of available capacity and rising prices in the few newer buildings in Adler's center that conform to western standards. A one room apartment with western standards will cost from 40,000- 50,000 rubles per month (about $1,330 to $1,660). A two room apartment will cost from about 65,000 rubles to 80,000 rubles a month (app. $2,160- $2,660). A larger apartment with three rooms, runs from 90,000- 120,000 + rubles each month (app.$3,000- $4,000). Utilities will vary according to size and location. Bear in mind, that Russian apartments consider rooms, rather than bedrooms, the standard. A room is anything other than a kitchen, bathroom, corridor or balcony (living rooms frequently double as bedrooms).

Adler Rental

Central Sochi, regarded as a more desirable location because of its physical beauty, shopping, restaurants and a larger number of western-style apartments, is now somewhat less expensive than central Adler District. The distance between Adler (and the Olympic Park) and central Sochi is only about 25 kilometers, but the commute can be long. Nonetheless, for those who work in the center or with flexible schedules, Sochi is becoming an increasingly attractive opportunity because the ruble goes further.

Sochi Rental

One room apartments with western standards in the pedestrian center of Sochi will run from 35,000- 60,000 rubles per month (app. $1,160- $2,000). Two room apartments cost 40.000 to 60,000 rubles each month (app. $1,330. $2,000). An apartment with three rooms (85 - 100 square meters) will run from 70,000 to 100,000 rubles monthly (app. $2,330- $3,330) and up to 120,000 (app. $4,000) for the best and largest apartments on the best streets. There are large, two-floor penthouses with spectacular views available at monthly rentals of 125,000 to 300,000 + rubles (app. $4,160- $10,000).

Penthouse View

Office space in Adler runs about 1,200- 1,500 rubles per square meter per month ($3.68 to $4.60 per square foot per month). Central Sochi offices also typically costs from 1,200 to 1,500 rubles per square meter per month. A new mixed-use building in the center with sweeping views of the city offers offices from as small as 18 square meters to a larger suite of about 220 square meters at 1,300 rubles per square meter per month ($3.99 per square foot per month). The new Class "A" building (shown below) near the Sochi City Administration has offices ranging from 2,500 rubles to 5,000 rubles per square meter per month ($7.68 to $15.35 per square foot per month).

Please contact me directly for workforce accommodations, office rentals and all desination management needs, including transport, documentation, communication and event management: bruce@destinationsochi.com

New Office Building

Video Of May Day In Sochi

2012-05-06T18:16:49Z

We have posted a new video on SochChannel.com of the events held in Sochi on May Day. The traditional worker's holiday is celebrated all across Russia on the 1st of May. Sochi celebrated the holiday with a parade past the Winter Theater. Park Dendrary was opened to the public free of charge, also.

Sochi Newsletter- May 3

2012-05-03T18:45:08Z

Sochi Newsletter- May 3 has been sent to subscribers. Included are photos and details about May Day in Sochi and other recent developments in Sochi. Please follow this link and sign up for the newsletter. Next week, in the newsletter, we will include a summary of our survey of office and residential rental prices for central Sochi and Adler. We are currently working with outside groups on workforce accommodation. It looks like the predicted rise in prices is happening already. Prices in Adler for apartments with western standards in the best locations are eclipsing levels in central Sochi.

Brian Burke, Hockey Legend and N.H.L. General Manager, Visits Sochi

2012-04-29T06:40:27Z

Brian Burke, the President and General Manager of the Toronto Maple Leafs and General Manager of the U.S. Hockey team, visited Sochi on Saturday, April 28. Mr. Burke planned on arriving in Sochi on Friday, the 27th, but due to fog his flight was diverted to Krasnodar. He waited all evening in the Krasnodar airport until the flight was cancelled at about 10 p.m. Because his schedule is demanding and time was short, Mr. Burke caught a taxi and persuaded the driver to make the 6 hour trip overnight on the serpentine Black Sea route to Sochi. He arrived at about 5 a.m. After a quick shower and cup of coffee, I showed him central Sochi, Adler and the Olympic Park before he departed for Sweden. When I asked him about staying in a hotel in Krasnodar, instead of driving all night to Sochi, he told me there was no assurance he would have been able to fly here the next day. This may have required him to cancel Sochi. He said it was important to him to see the environment where players would be living and competing and that he could not speak credibly about it and the issues they would face unless he had been here. It is not hard to see how his attention to detail and work ethic has led to so much success, both in the NHL and for the U.S Hockey team.

Brian Burke was born in Providence, Rhode Island into a family that eventually included 10 children. When he was about 11, the family moved to Edina, Minnesota. In Minnesota, he received a late introduction to hockey, the sport that would dominate his life as a player, agent and eventual General Manager of the Hartford Whalers, Vancouver Canucks, Anaheim Ducks and currently, the Toronto Maple Leafs. The Maple Leafs are one of the marquee franchises not only in hockey, but in all North American sports. Remarkably, he is the first American-born G.M. of the Maple Leafs. Brian also was the General Manager of the U.S. men's hockey team that won a silver medal in the 2010 Winter Olympics. He attended Providence College and Harvard Law, so his educational pedigree is as strong as his hockey background.

Brian and I talked about the Olympic Park and the construction that Sochi is undergoing. He noticed the numerous apartment buildings, road and street projects being constructed and we walked around the airport. He told me that the Olympic Park and venues were "very impressive" and that the new airport is an excellent facility for an Olympic city. He also told me that the overall changes that Sochi is undergoing are remarkable.

The entrance to the Olympic stadium is only about 100 meters from the Black Sea, so we stopped there and took photos.

Gossip Opens In Sochi

2012-04-29T06:29:48Z

Gossip, owned by Martial and Bastien Simonneau, has opened in Sochi at the Melodiya Shopping Center. Gossip, which has great views of central Sochi and Kurortniy Prospekt, sports a cool and casual environment designed to appeal to the professional crowd in the heart of the city. I tried sushi rolls (good) and the salad with Saint Marcellin cheese (excellent and the likes of which can not be found elsewhere in Sochi) and also their own mango and strawberry sorbet. Gossip has the right ambiance to draw a sophisticated foreign clientele as well as the hipster scene in Sochi.

Channel 5 Video In Sochi With Bruce Talley

2012-04-17T04:36:59Z

Several weeks ago, I was featured in a video piece that Saint Petersburg's Channel 5 did on English langauge service in Sochi. The video was shown nationwide in Russia. Sochi has started a "word of the day" program to teach residents of Sochi basic English. Each resident will be exposed to the word an average of 3 times per day.

Hotel, Restaurant and Cafe Expo

2012-04-10T00:54:54Z

April 4- 7 saw an expo on the boardwalk at Lighthouse Beach. About 100 exhibitors were there to sell products and services to the hotels, restaurants and cafes in Sochi. We attended and took photos of the event. Sochi is adjusting to its changing market with new hotel providers such as Hyatt, Marriott and Hilton. Radisson is adding another property. New restuarants are opening to appeal to Sochi's increasingly international visitors. However, Sochi has a shortage of catering companies that can satisfy the demands of outside organizations for events. We are working with several companies that are expanding into Sochi and at least one restaurant with foreign ownership is planning to expand into catering to meet the demand.