New York Magazine is out with a lengthy profile of the Mad Russian and his plans for Simmons Lane. I suppose it wouldn’t be legal, but it would be a good idea if the town required performance bonds from people like this whose fortunes are tied so closely to Russia and Putin’s whims. So far, ground hasn’t been broken although the house itself is gutted. If Kogan is destined for bankruptcy, I hope it happens before the bulldozers tear up the place. This article doesn’t build my confidence that the man will stick around to finish his dream:
Valery Mikhailovich Kogan is, by competing accounts and seemingly depending on the day of the week, either the 499th or the 157th richest man in Russia. His worth, according to the Fortune-like Russian magazine Finans, fluctuates wildly—$300 million in 2006, $90 million in 2007, $600 million in 2008. In his homeland, where oligarchs tend to be heavily gossiped-about public figures with fun holdings like soccer clubs or regional governorships, even rumors about Kogan are surprisingly sparse. He had served in the navy, come up through the ranks in Soviet times, and got rich in the chaos of the privatizations that followed the collapse of the USSR; his official bio makes reference to his “vast experience in the diplomatic field,” without elaborating. Whatever it was, in 2004 Kogan found himself with one of the strangest and cushiest jobs in Russia: a principal in East Line, the private company that controlled Moscow’s Domodedovo International Airport. The company’s structure had been called by analysts “complex and nontransparent.” By 2005, East Line was embroiled in scandal. Among the accusations was a jaw-dropper, widely reported in the Russian press, about faked plane-engine repairs, billed by a subsidiary of East Line. The Russian authorities had made a move to nationalize the airport—and that’s when Kogan went house-shopping in the West. As the scandal continued to unfold, it certainly looked like the tycoon wouldn’t mind relocating Stateside not just his assets but himself. Acting through another company, Kvoda Group (an anagram, one future neighbor noted, of vodka), Kogan was about to close on a $10 million duplex at 515 Park Avenue while his wife, Olga, sized up mansions in Greenwich.
Even if the suit doesn’t succeed, the project may yet stall for a very different reason. One of the strangest things the Kogans did with their purchase was leverage the living daylights out of it. In August 2005, they took a $10 million loan from Eastern Savings Bank against the house. Less than year after that, they used the same property as collateral in a $15 million loan from the same bank to Kogan’s Kvoda Group. The house cost $18.5 million in 2005; its price, considering it has been stripped, has at best stayed level or, much more likely, hovers around $10 million to $11 million. It’s hard to say whether Valery Kogan’s oft-changing fortunes are at fault, but the would-be oligarch pleasure pad is currently leveraged two to one. Both loans mature on June 1. Much like the bubble itself, the would-be bane of Simmons Lane is now a castle in the sky, in hock to a hope for a brighter tomorrow.