Feci, quod potui, faciant meliora potentes…
All great countries have a legacy and cultural identity that should be cherished and passed on to future generations. Part of this legacy manifests itself in architecture and interior design. Sadly, however, even the great pyramids of Giza are not immune to the sands of time, and more modern construction is often even less robust. So the inevitable questions arise:
- Who should bear the cost of preserving the great buildings of the world if they are in a state of disrepair?
- Who should inject new life into these leviathans which tend to be situated in prime locations in some of the world’s most spectacular cities?
There are no simple answers. Various approaches have been tried throughout the world: from state subsidies, to dedicated national foundations (such as the UK’s English Heritage and the National Trust) and private donations. In Soviet Russia there was only one solution: such treasures belonged to the people and thus the state was responsible for funding their upkeep. If the state had insufficient funds, well, tough luck to the monuments which were left out!
St. Petersburg’s treasures were badly damaged during World War II due to heavy bombing and shelling of the city in one of the longest and most destructive sieges in world history. Although the amount spent by the Soviets to restore the city after the war has been unparalleled, it wasn’t enough to renovate each and every one of the great houses adorning this beautiful city. Many Grade ‘A’ listed buildings were therefore either assigned for utilitarian use or converted into housing collectives.
One of the most successful cultural policies of the Russian Government after the collapse of the Soviet regime was to initiate the long-term leasing of such historic buildings to private tenants. In turn, owners committed to restoring and preserving buildings under the close supervision of heritage experts. Consequently, quite a few of the buildings that were in a state of almost disrepair have not only survived but have been brought back to life and restored to their former glory. This approach, however, has proved to have one severe drawback. The leases of these buildings were often undertaken by major banks and corporations, and thus public access has been at best limited, whilst in most instances, barred. The interiors of these great buildings have therefore been hidden from public view.
There is, however, another option which may be the best of all – converting historical buildings and heritage sites into modern hotels. As private enterprises, not only is direct public funding no longer required, but these buildings function almost as a museum, allowing the public to dine, sleep and enjoy themselves in these spectacular surroundings.
The Four Seasons Hotel Lion Palace St. Petersburg now joins the ranks of other historic buildings in Florence, Rome, Budapest, Istanbul and Paris that have found a new lease of life in this century as grand hotels. All have been carefully restored to their former glory through private equity; and often managed under the auspices of the Four Seasons Hotels and Resorts Group. This project is one of the boldest and biggest investments managed by VIY Management to date. The US$200 million project transformed an eighteenth century mansion in the heart of St. Petersburg – which had been neglected for over 70 years – into a 21st century world-class hotel with 183 rooms (Lion Palace St. Petersburg).
Yet, private equity is not called private for nothing. We invest in private companies, that are headed by passionate private individuals, usually with strong views of how their communities should develop. I was incredibly fortunate in this project that the major stakeholders shared a common view – that preservation of both the country and the city’s identity was a private affair. Reflecting on the last six years of this great project at the official opening of the Four Seasons Lion Palace St. Petersburg on Friday, we all felt we had done something very right. Right for our investors, right for the debt providers, and right for my hometown of St. Petersburg.
So, I have done what I could; let those who can do better… I sincerely hope better projects will soon materialise in Russia. Knowing my peers in Russian Private Equity, nothing stimulates each one of us more than another’s success! ;)