Putin's Palace

On 10 June 2005 the Presidential Property Management Department, two federal state enterprises and the company Lirus signed an investment agreement to build a boarding house on a 740,000-square-metre plot near Praskoveyevka, outside Gelendzhik on the Black Sea coast. Lirus was to invest at least 400 million roubles, and the work was to finish in 2008. An addendum of 10 November 2008 made Military Unit 1473 of the Federal Protective Service the client-developer. The site was fenced as a year-round children's camp belonging to the state enterprise Dagomys, which drew the attention of environmental activists.

The house was designed in Italianate manner by the Italian architect Lanfranco Cirillo. The main building covers 17,700 square metres, and the estate also carries an ice palace, a church, an amphitheatre, a helipad, an 80-metre bridge and a tunnel driven into the mountain.

In December 2010 an open letter to President Dmitry Medvedev appeared online, written by the St Petersburg businessman Sergei Kolesnikov. It alleged that a recreation complex had been under construction on the coast since 2005 for Vladimir Putin's personal use, at a cost that had reached about a billion US dollars in the estimates Kolesnikov last saw in October 2009. He described the financing: an approach from Putin's friend Nikolai Shamalov conditional on 35 per cent of income going to foreign accounts, and the company Rosinvest, set up in 2005 behind anonymous bearer shares, one of whose projects Shamalov personally supervised.

In February 2011 members of Environmental Watch for the North Caucasus and a journalist who visited the site said they were harassed and detained by the Federal Protective Service; their equipment was confiscated and they published photographs anyway. A Reuters investigation in 2014 reported that money from the 2005 national health project had reached the construction: Shamalov and Petromed's owner Dmitry Gorelov sold hospitals medical equipment at prices inflated two- to threefold, and bank documents showed 84 million dollars moved to Swiss accounts, of which at least 35 million euros went to a company working on the palace.

In 2009 the buildings and land were transferred to the private company Indokopas, owned by Shamalov; the construction was nonetheless carried out by Spetsstroy, and the Federal Protective Service supervised and guarded the project and issued its design requirements. Between 2005 and 2010 state budget money paid for a mountain road, a power line and a gas pipeline to the residence. After the press coverage Shamalov resold the estate at a reduced price to Alexander Ponomarenko, co-owner of the Novorossiysk Commercial Sea Port; by Kolesnikov's account companies controlled by the former owners went on managing it. Ponomarenko said he left the project in March 2016.

Workers interviewed anonymously by BBC News Russian in February 2021 described mould spreading through the whole building in 2017-2018, behind the drywall false walls carrying the expensive finishes; the architect Cirillo agreed that high humidity and the lack of a proper ventilation system were a plausible cause. The building was taken out of service, the plaster mouldings and precious wood and stone panelling were stripped out, and by early 2021 the roof, windows and external cladding had been replaced.

On 19 January 2021, two days after Alexei Navalny was detained on his return to Russia, his Anti-Corruption Foundation published an investigation calling the estate 'the world's biggest bribe' and put the build cost above 100 billion roubles. Protests in support of Navalny began on 23 January. Putin said the palace had never belonged to him or his family. On 30 January the businessman Arkady Rotenberg told the outlet Mash that he had become the beneficiary 'a few years ago' and called the building an unfinished aparthotel; Meduza found the residence registered to the St Petersburg firm Binom, itself connected to companies linked to Yuri Kovalchuk. In 2024 the outlet Proekt reported that entertainment rooms had been reconfigured into lounges and a chapel dedicated to Saint Volodymyr of Kiev.

The airspace over the estate is regulated as prohibited zone P116, which the Federal Security Service said was to protect a border post from foreign intelligence activity; the territory is ringed with checkpoints, and an adjoining 7,000 hectares belonging to the FSB is leased until 2068 to the firm that owns the residence.