Donald Trump - Expected Investment Trump Card
26 April, 2012
Donald Trump - Expected Investment Trump Card

Georgian government believes that lending of his name by the US real estate mogul Donald Trump to  a 47-story posh residential tower in Batumi, Black Sea outlet of Georgia, will attract to Georgia other big fishes but economic analysts fear Georgia’s investment trump card cannot work without the back-up of proper fair business climate.

“Georgian foreign ministry will greet any big investment in Georgia that means a lot of citizens will be employed on Georgian territory. This is directly connected

with well-fare of our citizens, large-scale construction process and in a long-term prospect it means that where such a big construction and project is founded it will be possible to employ a lot of Georgian families,” Nino Kalandadze, Deputy Foreign Minister of Georgia, stated during her traditional Monday press-conference on April 23, 2012 to evaluate importance of  Donald Trump’s two-day visit [on April 21-22] in Georgia and its possible outcome.
According to Kalandadze, Trump’s visit will be kind of a visit-card to Georgia and motivation for other big investors to invest in Georgia.
Trump, who traveled to Georgia after a visit to Istanbul, unveiled the 47-story Trump Tower Batumi project on April 22 with Georgian President Mikheil Saakashvili and partner Silk Road Group (SRG), one of the country’s biggest private-investment companies.
Trump Tower Batumi will be designed by “John Fotiadis Architect PLLC (JFA)”, a New York based architectural firm. Cutting-edge architectural design of the 47 story residential building, will offer spectacular apartments varying from 80 m2 to 700 m2, with the breathtaking views of the Black Sea coast and the highest level of Trump luxury standards, SRG assures.
The Georgian conglomerate expects to have the necessary funding by the end of this year, with construction slated to start in early 2013.
A deal to develop the project was signed in New York in March of 2011 on the sidelines of Georgian President’s visit to the United States. Apart of Trump Tower Batumi the deal envisages construction of the Trump Tower in Tbilisi. The project is tentatively assessed at USD 250 million however SRG expects to attract more investments in future. 
Georgian President personally acted as a guide and host of Donald Trump during his two-day tour, he called Trump as a builder of new America and decorated him by the Presidential Order of Excellence during his visit’s first day. Trump in his turn called Saakashvili “a great man” outside Georgia who did “the most amazing job” in the country and praised investment opportunities of Georgia consequently.
Georgia “is one of the really amazing places in the world right now” with “lot of investment opportunities,” Trump told the Reuters in Tbilisi on April 21, 2012. 
However Trump himself is not supposed to put any investment in Georgia’s “investment opportunities” in fact. The contribution Trump makes to Georgian project is lending his name and mark to SRG under license term that may be terminated or revoked according to its terms that are not disclosed at the moment. Commensurately nobody is aware of what conditions Trump demanded in exchange of lending his name to Georgian company and what marketing plans and financial expectations partners have toward Trump Tower Batumi that makes Georgian economic analysts wary toward the otherwise glitzy Trump-SRG deal. Giorgi Ramishvili, Head of SRG, promised to disclose financial details of the project later. 
“Trump’s name might have a really big and guaranteed effect if he put any cash investment himself,” Ditrikh Muller, a co-founder and expert of Georgian Investment Group, said.
Nevertheless, he presumes associating Trump’s name with Georgia is a big deal too for Trump is a very famous and influential businessmen globe over. Besides it accentuates importance of Georgia in the region as far as actually this is the first ever Trump’s business project in the entire post-soviet space including the east European countries, but investors’ interest toward his Georgian project will not be palpable until financial details of the deal are unveiled.  
“Granting own brand mark to any other company is a probated world practice and the taker company either pays money for the brand based on monthly, yearly or whatever the period is agreed, or gives certain share in the project to the brand owner,“ Muller said in the interview with Georgian Journal. “And until investors will not learn how much Trump owns in the project they will not take an interest in this company. Investors should make their calculations, say if Trump demands big percent that is equivalent to big yield out of the project, other big investors may not be very much interested and so forth.”
Muller believes regional rather than American and European investors will be interested in Trump’s Georgian project until commercial side of the project is confidential. He expects mainly state-assets based investors from Kazakhstan and Azerbaijan as well as Armenian and Turkish ones to put money in Trump Tower in Batumi that most probably will develop casino business - prohibited in Azerbaijan and Turkey and quite restricted in Armenia. 
Paata Sheshelidze, President of Free Economic School of Georgia, thinks when such an influential and famous businessman as Trump enters the country it is a very good thing and can attract attention of other investors but this is only part of trust. Another more important part is to meet these investors with proper business environment not to disappoint their expectations otherwise only Trump’s name cannot work.
“It is obvious that Trump will not face any problems here but more important is not to create problems to other investors’ operation in Georgia. This is a complex issue: we have acknowledged problems from the point of view of property rights protection, court, tax administration, these issues should be solved otherwise image of Georgia will be undermined,” Sheshelidze elaborates adding that disclosure of financial details of Trump-SRG transaction also matters to make obvious what benefits the project suggests.
He also dislikes the state PR campaign launched over a private company deal.
“I understand when president of the country attends a presentation event of a private company to say this is a right thing to encourage business but I cannot get the grip when president acts like  a personal host, meets and sees off Trump at the airport and accompanies him everywhere, why is that?”  He asked.
Levan Surguladze, head of the investment bank Caucasus Financial Service, thinks Trump’s entrance in Georgia is a lopsided positive thing irrespective the confidential side of the deal.
“This is a very positive signal, Trump has no business in any post-soviet space including east Europe, only in Turkey and Dubai near in the region…entrance of any famous brand especially of Trump is very important and how things will be redistributed inside the project is not of much importance to investors in fact,” he said.

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