Hyatt Hotels Corp. first announced the development of the Hyatt Regency Moscow, which it would manage, not own, back in 2012. At the time, the hotel was scheduled for completion and opening in 2015, part of the $1.5-billion Arena Park redevelopment, which included Moscow’s Dynamo football stadium.
The 297-room hotel would include meeting and ballroom space, four F&B outlets, and a fitness center and spa. In addition to the hotel, the Arena Park project would offer guests access to a new football stadium, ice hockey/basketball arena, retail and entertainment zones, offices and residences.
Two years after it was slated to open, reports out of Russia say that the hotel is, indeed, inching closer to an opening. But it hasn't been the easiest of developments.
The developer behind the sprawling Arena Park and Hyatt Regency is VTB Bank, which, as The Wall Street Journal wrote back in 2015, is a state-controlled Russian financial institution that was also a target of Western sanctions stemming from the war in Ukraine.
Even though the U.S. has sanctions in place on VTB, they, as The Wall Street Journal points out, do not impact the ability of Western businesses to work with said company. That is because the scope of the sanctions is narrow, unlike full sanctions that would prevent U.S. companies from working directly with Russian entities. As The Journal in its story writes: "When the U.S. imposes 'full-blocking sanctions' on a bank or individual, which isn’t the case with Russia, that generally prohibits any U.S. person from doing business with them."
The Office of Foreign Assets Control (OFAC) administers and enforces economic sanctions programs primarily against countries and groups of individuals, such as terrorists and narcotics traffickers. The sanctions can be either comprehensive or selective, using the blocking of assets and trade restrictions to accomplish foreign policy and national security goals.
The Ukraine/Russia-related sanctions program implemented by OFAC began on March 6, 2014, when President Obama, in Executive Order (E.O.) 13660, declared a national emergency to deal with the threat posed by the actions and policies of certain persons who had undermined democratic processes and institutions in Ukraine; threatened the peace, security, stability, sovereignty, and territorial integrity of Ukraine; and contributed to the misappropriation of Ukraine’s assets.
In the case of VTB, the sanctions imposed prohibited only transactions that provide new equity or new debt for more than 30 days—that's according to a spokeswoman for the U.S. Treasury Department. “They’re unlike the full blocking sanctions,” she told The Journal.
Financing for the arena project was already in place before the sanctions went into effect last year.
“Working with Hyatt on the Arena Park project is an especially exciting opportunity for us,” Andrei Peregoudov, VTB Arena park director, said back in 2012. “Among all the offerings at the sports and entertainment complex, Hyatt Regency Moscow will be an especially great addition to the area.”
VTB reportedly financed the project partly through a 440 million euro ($472 million) package that was put in place in 2012, provided by a group of European banks backed by SACE, the Italian export credit agency.
In regard to the Hyatt Regency, RussiaConstruction.com now reports, citing Andrey Peregudov, SVP of VTB Bank and project head, that the hotel will open sometime between May and June of this year. Peregudov further noted that the hotel is "almost completed," and "the last preparations are being carried out."
Back in 2012, Peter Norman, SVP of acquisitions and development for Hyatt Hotels Corp. (he owns the same title today), said of the country: “Russia, and Moscow in particular, have a strong appeal to global business and leisure travelers, and the country’s influence is only continuing to grow. With the addition of Hyatt Regency Moscow, which comes just months after the announcement of two new Hyatt-branded properties in Vladivostok, we are reinforcing our commitment to becoming the most preferred hotel brand for customers visiting this gateway market.”
(Hyatt declined to be interviewed for this story.)
Back in 2012, Modern Russia interviewed Takuya Aoyama, VP of acquisitions and development for CIS and Russia for Hyatt, on the Hyatt Regency Moscow. You can read the full interview, here. On operating in Russia, Aoyama said, "As a center of political, economic and cultural life in the former Soviet Union, Moscow is a critical market for Hyatt as the company continues to reinforce its commitment to becoming the most preferred brand among guests, owners and associates in every segment we serve. Ararat Park Hyatt Moscow has been operating successfully for 10 years, and in addition to the Park Hyatt luxury brand, the Moscow market can support other Hyatt brands to serve various needs of both domestic and foreign guests."
All of these comments were, of course, made prior to President Donald Trump's election victory and subsequent rumored dubious ties of his Administration to Russia.
Hyatt Regency Moscow will join three other Hyatt-branded hotels in Russia, the aforementioned Ararat Park Hyatt Moscow, Hyatt Regency Ekaterinburg and Hyatt Regency Sochi.