Moscow on the Mediterranean? Russia's yacht craze

The Russian capital is landlocked, and frozen solid for more than half the year. But Russia's superrich, looking for new toys at which to throw their money, are nonetheless turning Moscow into a boating center.

Sales of world-class yachts - like those of virtually every pricey luxury item, from Ferraris to jewel-encrusted watches - are booming, as Russians flex their consumer muscles more than ever before.

"The highest layer, a few thousand people, are now increasing the size of their boats, replacing yachts worth $500,000 with those of $10 million," says Alexander Markarov, owner of the Avrora Yacht Club on the Klyazminskoye Reservoir, on Moscow's northern fringe.

"Many are in the Mediterranean, but many boats are here for purposes of prestige," says Mr. Markarov, looking across his 65-boat marina, as a vast white yacht makes its way past Soviet-era factories on the far side of the channel. "They use it as another office, and only go out once or twice a season."

While the average Russian can only dream of owning a boat of any kind, the increasing wealth of Moscow is evident everywhere, from the new construction of boutique malls, to exclusive catalogs that offer executive jets, $135,000 watches, and Victo- ria's Secret's $11 million bejeweled 6,000-stone, 2,500-carat "fantasy bra."

Moscow now boasts more billionaires (33) than New York (31) or any other city in the world, according to a Forbes magazine tally, which estimates that one-quarter of Russia's vast oil and mineral wealth is in the hands of just 100 people.

"What else is left for a rich Russian, if he already has his apartment, his car - or several cars - and his house abroad? A yacht," says Zari Chernyak, editor in chief of Captain magazine of St. Petersburg.

"If he has a foreign partner, what can [the rich Russian] offer him? Banya [sauna] or shashlik [roast meat kebab]?" says Mr. Chernyak. "And the partner shows his yacht. So just to be on equal terms, [the Russian] has to have a yacht."

Already, a handful of Russian oligarchs are becoming famous for their spending on water sports. Roman Abramovich - who owns Britain's Chelsea football club - owns the 5th, 6th, and 16th largest yachts in the world, according to Power and Motor-yacht's listing of the top 100.

His 370-foot Le Grand Bleu is currently at port in New York, complete with its built-in 72-foot sailboat and a 68-foot powerboat. The boat is so large that when it was in Monaco last spring, singer Shirley Bassey complained that it blocked her view of the harbor from her hilltop home.

"I've just come back from Italy and I know that Burevestnik [Moscow's most expensive yacht club] has got much newer and better yachts," says Arthur Klyanitsky, editor of Yachting, a Russian luxury magazine.

"Yachting is naturally a thing of prestige in Russia, and very popular not only among the very rich," says Mr. Klyanitsky. When he introduces himself in Europe, "Everybody asks: 'And what about Abramovich?' But yachting in Russia is not only for Abramovich."

Still, despite Moscow's often glitzy wealth, the roots of a consumer culture stretch back to the Joseph Stalin's Soviet Union of the 1930s. It was then that Moscow sought to create a new culture and mass-produce luxury goods that would rival the West.

While millions of hungry Soviets lined up for loaves of bread, Stalin sent officials to America to learn about everything from fast food burgers to men's suits at Macy's.

"In Soviet times, they [made] cheap imitations of luxury goods, or things imagined to be luxury goods from old aristocratic times or copied from the Western world," says Jukka Gronow, a sociology professor at Sweden's Uppsala University, who details those Soviet efforts in "Caviar with Champagne: Common Luxury and Ideals of Good Life in Stalin's Russia."

"The Soviets relied on things produced at home, but anything imported that had a Western label was very sought after," says Mr. Gronow. Cultural knowledge of the Western consumer was very restricted, accentuating a "pattern of consumption that identifies a very few items as valuable or extremely luxurious - this we can recognize today - that makes a Mercedes Benz a must-have."

Boats are slipping into that category, for those with money to spare in one of the world's most expensive cities.

Interest in top-end boats began to surge in 1995, after the initial chaos and money making of the post-Soviet collapse. Avrora owner Markarov says sales of jetskis and Zodiac boats doubled each year, until the economic meltdown of August 1998. Sales and club membership are on the rebound again, since boat registration procedures were simplified two years ago despite a reported 43 percent import tariff on such luxury craft.

Some 200 foreign craft over 16-feet long were imported into western Russia in 2003; this year, the figure could reach 400. Nearly 7,000 outboard motors were imported in 2003, half of them for new boats.

Among the handful of exclusive Russian yacht clubs, Avrora - which organizes annual regattas - is geared for enthusiasts and not just as a parking spot for expensive toys. Markarov expects to double the number of moorage spots at Avrora next year.

"In Soviet society, there was no money but there was reputation," says Makarov, who first visited this very marina when he was 5 years old, began boating at school at 14, and then began sailing in the early 1980s. "Here it was different," he says. "You could be the director of an institute, or a worker on the factory floor, but here you drank the same vodka."

But even at the peak of Soviet and Russia society, yachts have long been a tool of power. Before the Revolution of 1917, the imperial Romanov family had a yacht for receptions.

Shipbuilders finished President Vladimir Putin's $4 million, 31-meter yacht Pallada in May 2003, building it in less than a year.

Russian newspapers report that another presidential yacht, the 45-meter Kavkaz, was built in the 1980s after Soviet spies "penetrated" the priciest yachts in the world, to learn how to create such luxury. It was a favorite of Leonid Brezhnev and Mikhail Gorbachev.

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