The work of a New York architect reveals a lot about real estate in Eastern Europe — where Donald Trump and Paul Manafort built ties to oligarchs

Key Points
  • John Fotiadis, an architect who worked on several projects for Donald Trump, was involved with other prominent business figures in Eastern Europe.
  • Notably, he worked with Ukraine's richest man and a developer in the republic of Georgia and moved in similar circles as Paul Manafort, who would become Trump's campaign chief.
  • Here is a closer look at the architect's dealings in the region.
Donald Trump, Paul Manafort and Ivanka Trump check the podium at the 2016 Republican National Convention in Cleveland, July 21, 2016.
Bill Clark | CQ Roll Call | Getty Images

John Fotiadis, an architect who worked on several projects for Donald Trump, was involved with other prominent business figures in Eastern Europe. Notably, he worked with Ukraine's richest man, as well as working for a developer in the republic of Georgia. He also moved in some of the same circles in Kiev, Ukraine as Paul Manafort, who later became Trump's campaign chief.

During this time, Fotiadis designed some of Trump's most ambitious developments in the former Soviet Union. A master of glass-encased towers and monumental entrances, both hallmarks of Trump's properties, Fotiadis supplied vision and technical expertise that complemented Trump's salesmanship.

Read more: This New York architect's work is a key to understanding Trump's deals and connections in Eastern Europe

Overlooked until now, Fotiadis' work offers a window into Trump's dealings in the complex world of Eastern European real estate.

Fotiadis' work for Trump is detailed in a separate story, linked above. Here's a deeper look at his two other notable clients, Rinat Akhmetov's Esta Holdings group in Ukraine, and the Silk Road Group in Georgia.

The billionaire in Ukraine

With a net worth of $5.8 billion, almost double Trump's, Rinat Akhmetov is the richest man in Ukraine. He is also closely linked to one of the most notorious figures in the ongoing Russia probe: Manafort, the global influence peddler and Trump 2016 presidential campaign chairman who has been charged in special counsel Robert Mueller's investigation.

Like Manafort, Fotiadis came to Ukraine from the United States to work for Akhmetov, in 2009. And like Manafort, Fotiadis did work that experts say could have been lucrative.

By the time Fotiadis arrived in Kiev in 2009, however, Manafort had already moved on from working for Akhmetov's company to working for Akhmetov's political party, the pro-Russian Party of Regions. Experts think it's unlikely Manafort and Fotiadis would have crossed paths.

"Oligarchs like Akhmetov are used to leading very compartmentalized lives," said Columbia University's Alexander Cooley, an expert in Eastern Europe and Eurasia. "And there's no reason that his architect would intersect with his political consultant."

In all, Fotiadis worked on four major projects for Akhmetov's companies in Ukraine, according to his archived portfolio. Three were in Akhmetov's home city Donetsk and one was in the capital, Kiev.

In Donetsk, Fotiadis won a design competition in 2009 to build an international school funded by Akhmetov, The Grigorivska School, which took the architect two years to complete. Fotiadis' firm also was awarded the commission to design an eight-story luxury apartment building for Akhmetov's Esta Holdings there. In 2010, Fotiadis joined the design team for Esta's 100,000-square-foot Pushkinsky Business Center, for which Fotiadis' JFA provided the interior and lighting design.

Ukrainian businessman Rinat Akhmetov.
Alexander Khudoteply | AFP | Getty Images

In Kiev, Esta Holdings broke ground in 2012 in the city's historic Podol district on a mixed-use project dubbed the Andreevskiy Office Complex. Fotiadis was hired to design a facade and the public interiors. The project was abandoned, however, after protests broke out over a plan to demolish historic landmarks.

For an architect like Fotiadis, an oligarch like Akhmetov would be in some ways the perfect client, said Jan deRoos, a Cornell University professor of real estate finance. "You've got a client who knows what he wants and has the means to make it happen, and you've got an architect who knows what he's doing and gets it done," deRoos said.

"If you're an oligarch, you're going to want some buildings, and you need someone to take care of it. These guys are in the business of being oligarchs, not in the business of building buildings," deRoos said.

To many tycoons who made fortunes in post-Soviet Eastern Europe, the importance of buildings, and by extension, architecture, cannot be overstated, Cooley said: "Buildings are very, very important to the oligarchs because they're the physical manifestation of what they want their legacies to be."

He said monumental architecture and civic works also can burnish an oligarch's reputation in the West, where some still look askance at those who made billions through the mass privatization of what had been Soviet state-owned assets. Cooley terms that "reputation laundering."

Viewed through this lens, Cooley said, Fotiadis' work for the Ukrainian billionaire bore similarities to what Manafort had done for Akhmetov a few years earlier.

Manafort had arrived in Ukraine in 2005, part of "a whole new class of service providers, hired by these newly rich oligarchs to help them move into the mainstream," Cooley said. Unlike architects and other specialists, men like Manafort "typically did a little bit of everything," Cooley added. To someone like Akhmetov, Manafort was a "one-man concierge service to help their client navigate the West."

Inside Esta Holdings, Fotiadis appears to have worked closely with Akhmetov's team. So closely, in fact, that when Fotiadis decided to open a branch of his firm in Kiev, he chose Esta's director of construction, Sergey Danilyuk, to run it, according to an announcement on Fotiadis' website that has since been removed. An Esta spokesman did not respond to questions from CNBC about Fotiadis, its work with him, or Danilyuk.

For an architect to hire away his client's employee is highly unusual, however, experts told CNBC, especially for an American architect in Ukraine, a country where the real estate industry is widely considered to be corrupt.

Buildings are very, very important to the oligarchs because they're the physical manifestation of what they want their legacies to be.
Alexander Cooley
Columbia University

Cooley also noted another unusual aspect of Fotiadis' work for Akhmetov's companies: the timing. JFA did not exist until 2009, when Fotiadis left the firm of his mentor, the renowned architect Costas Kondylis, to found his own firm. Yet within months of opening JFA, Fotiadis had secured two major commissions from a foreign billionaire.

Fotiadis and Esta Holdings declined to comment on how they began working together.

"What's so striking to me is the fact that someone as prominent as Akhmetov was Fotiadis' first commission as an independent architect," Cooley said. "You're making a decision to hire this person knowing relatively little about them, because they've only just opened their doors."

"And that is not how guys like Akhmetov hire their architects," Cooley said.

On Fotiadis' now-shuttered website, however, there is a testimonial in which Esta's CEO, Maksim Hramadtsou, praises Fotiadis' work and experience. "JFA brought international experience and the latest global architectural trends and thinking to the Ukrainian market," he says. Fotiadis and his team, the CEO adds, "made great efforts in understanding the local market and its peculiarities and took those factors into account when designing for us."

The Silk Road Group

Fotiadis' work for Akhmetov in Donetsk exemplified one way that real estate development projects in Eastern Europe can work. Backed by political clout and unlimited funds, work is completed on a relatively tight schedule and opened, for the most part, without controversy.

Fotiadis' next big design job, in the republic of Georgia, worked a very different way. From the start, the Trump Tower Batumi project along the Black Sea was underfunded, overhyped and dependent on shifting political forces.

In hindsight, it would come to resemble many of Trump's real estate pursuits in Eastern Europe.

In the summer of 2011, Trump selected Fotiadis to design the plans for two Trump Towers in Georgia, in the capital, Tbilisi, and the resort town Batumi. Trump's official partner was George Ramishvili's Silk Road Group, which said it paid Trump $950,000 up front to license his brand.

But there was another, unofficial partner: Georgia's flamboyant, English-speaking president, Mikheil Saakashvili, who hoped to reap domestic political benefits from Trump's interest in Georgia. At practically every opportunity, Saakashvili inserted himself into the publicity surrounding the deal.

Georgia's then-President Mikheil Saakashvili (L) and Donald Trump shake hands during a press conference to announce a real estate project by Trump in Georgia, at the Trump Tower in New York, March 10, 2011.
Emmanuel Dunand | AFP | Getty Images

In 2011, Saakashvili accompanied Ramishvili to Trump Tower in New York to sign a deal with Trump. It was followed by a splashy kickoff in the same glass atrium where, four years later, Trump would launch his presidential campaign.

Fotiadis was familiar to Trump, having worked on several Trump projects during his 20 years with Kondylis. According to a trade news site from 2011, Trump chose Fotiadis for the Georgia projects even though on paper, it was the Silk Road Group that Fotiadis listed as his client.

Cornell's deRoos said this arrangement was typical of the licensing deals Trump sought overseas. Maintaining control over a building's design standards and materials was critical to protecting the value of Trump's brand.

"Regardless of your politics, in the real estate industry, Trump is known for the quality of his buildings, even the licensed ones he doesn't build himself," deRoos said. "And that has a lot to do with the technical services contract that is overseen by Trump's architect, which says how everything needs to be built, what standards need to be met."

Developers like the Silk Road Group would have been required to use a Trump-approved architect, deRoos said. "That would be Fotiadis, who says to them, basically, 'You want something that looks like a Trump Tower?' I can do that."

Silk Road Group was clearly impressed by the architect's work, because later that year it hired Fotiadis to design another project, a Radisson-branded hotel in Georgia's wine country.

In April 2012, Fotiadis, Trump and Michael Cohen, Trump's personal lawyer and fixer, traveled to Georgia, where Trump unveiled Fotiadis' design for a 47-story tower in Batumi, surrounded by a beach resort.

Over two days, the three attended receptions and press events in Tbilisi and Batumi, where Trump promoted his deal with Silk Road Group. According to news reports, Ramishvili predicted he would raise the $250 million needed for the Batumi project by the end of the year.

Donald Trump during a 2011 press conference to announce a real estate project in the republic of Georgia.
Emmanuel Dunand | AFP | Getty Images

Behind the fanfare, however, there already appeared to be confusion about who would pay for the project.

Trump had initially pledged in 2011 that he would help the project find investors. Georgian news reports suggested that Trump himself was planning to invest as much as $100 million in the Batumi tower, according to Martin Frederiksen and Katrine Gotfredsen, authors of "Georgian Portraits: Essays on the Afterlives of a Revolution."

Trump did nothing to combat the perception that he had a major stake in the project. Appearing on "Fox and Friends" a few days later, he gushed about how Georgia was "booming" and "unbelievable." When asked about what in Georgia he was investing in, Trump replied, "I'm doing a big job there, I'm doing a big development there and it's been amazing."

In the end, there would be no Trump Tower in Batumi or Tbilisi. In late 2012, Saakashvili's party lost in elections and the country's new prime minister, billionaire Bidzina Ivanishvili, accused Trump and Saakashvili of hyping a fake plan for Trump to invest millions in Georgia even though Trump had never intended to do so.

"Not a single cent has been invested by Trump. It's a complete lie," Ivanishvili told The Atlantic. "Quite the contrary: Trump wanted to sell his brand, and we don't know what actually happened."

A year later, the Georgian economy faltered, and authorities launched a large-scale money laundering investigation into the Silk Road Group. The case was dropped in 2014, however, due to what investigators said was a lack evidence. The following year, Trump announced his upstart candidacy for president.

Donald Trump formally announces his campaign for the 2016 Republican presidential nomination during an event at Trump Tower in New York, June 16, 2015.
Brendan McDermid | Reuters

In 2016, when Trump shocked the world by winning the election, it was reported that the Trump Organization, not the Georgians, wanted out of the deal. Silk Road Group's Giorgi Rtskhiladze told Forbes he received a call from Trump's lawyers, who told him the deal with Silk Road Group could create potential conflicts of interest now that Trump was president. Trump Organization lawyer Alan Garten did not respond to a CNBC inquiry about why the deal was terminated.

Today, the 15-acre site in Batumi that was once going to house Fotiadis' soaring tower sits empty. Ramishvili and Rtskhiladze told Forbes last year that they plan to move ahead with building a Trump-like tower on the site. Silk Road Group has secured funding, they said, from an unlikely source: the Georgia Co-Investment Fund, a secretive investment fund created by none other than the Batumi project's onetime critic, Ivanishvili.

Silk Road Group also says it will still use the Trump-approved design, which is presumably Fotiadis' design. A spokeswoman for Silk Road Group, Melanie Bonvicino, did not respond to questions from CNBC about whether this means it will use Fotiadis' plans.

Yet even as the Batumi project fell apart during the last four years, Fotiadis' other big project for Silk Road Group appears to have slowly inched forward.

A rendering of the Radisson Tsindanali Hotel in Georgia.
Source: Silk Road Group

The Radisson wine resort (pictured above) in the picturesque Georgian village of Tsinandali will reportedly open this fall. Bonvicino declined to confirm this or provide any additional information about Fotiadis' involvement in the project.

But a 2015 press release from Silk Road Group describes how Fotiadis' design "re-interprets the materials and formal configurations of the older existing buildings" at the vineyard using "fragmented volumes, inclined roof-planes, [and] weathered-steel framed windows."