The buildings of the Army General Staff and the Ministry of Defense represent one of the first tourist attractions that greet those arriving in the center of the Serbian capital.
Both constructions were bombed by NATO planes in 1999, and since then, they have remained in a state of ruins. The Serbian government has handed them over to Jared Kushner to build a luxury real estate complex in their place, a decision that has sparked controversy, with Romania being cited as an example.
As members of the Western military alliance, the United States were involved in the bombings of the Serbian capital. In these conditions, it was a real shock for the Serbs last year when the government reached an agreement with a company named Affinity Global to redevelop this location into a luxury hotel and apartment complex worth $500 million.
The Serbs were surprised not only because this company is American, but also because its founder is none other than Jared Kushner, the son-in-law of Donald Trump. And the planned development is set to be named Trump Tower Belgrade, as reported by BBC.
The decision of the Serbian government to conclude the agreement was not accidental. Before becoming the President of the United States in 2016, Donald Trump had expressed interest in building a hotel on this site.
The measure also fits into a pattern of the Serbian government, according to Serbian opposition, to allow foreign investors to profit from public property, citing as an example the residential and commercial project on the waterfront in Belgrade, built by developers from the Emirates on land owned by the state railway company.
Where once there were rusty rolling stock and abandoned sidings, there is now an elegant shopping center, restaurants, and the peculiar Belgrade Tower, with 42 floors, resembling an upside-down lantern that is not to everyone's taste.
However, it was a disused industrial site rather than a landmark in the city center. In contrast, the Ministry of Defense complex is a completely different proposal - especially as it serves as a monument to the victims of the 1999 bombings. Additionally, it is a visible reminder of why most Serbs still oppose NATO and have sympathy for Russia.
Serbia seeks to attract the attention and money of foreign investors
In these conditions, granting a 99-year lease contract for this location to an American investor - and apparently without initial costs - is a bold move, notes the cited source.
However, Serbian President Aleksandar Vucic considers it the right decision. "It is important to overcome the burden of 1999. We are ready to build better relations with the USA - I believe this is extremely important for this country," he told the BBC.
The flow of foreign direct investments in Serbia has tripled in the last decade. However, the GDP per capita remains low compared to EU states, representing only a third of the bloc's average.
For these figures to move in the right direction, attracting new investors is vital. And although the financial details of the deal have not been disclosed, New York Times reported that the Serbian government will receive 22% of the future profits generated by this complex.
"For a small and specific market - the former Yugoslavia, outside the EU - any publicity is good. If important international players come, it's an attraction," said James Thornley, former senior partner at KPMG Serbia, now a partner at the financial consultancy firm KP Advisory in Belgrade.
Romania, given as an example
However, not all those involved in international investments in Serbia are enthusiastic.
Andrew Peirson was the managing director of the global real estate giant CBRE in Southeast Europe and now holds the same role at iO Partners, a group focusing entirely on the region.
He acknowledges that the state of degradation of the Ministry of Defense complex "is not good for the city's image" and that the development agreement of the site is "probably good news, as it shows that the country can attract large investments."
But he has significant reservations about how the government concluded the deal with Affinity Global. Peirson says there was no open bidding process that would allow other firms to bid.
"In the case of state-owned land, you should be able to demonstrate that you are getting the market value for the site. The usual way to do this is by conducting an appropriate auction," Peirson said about the government's decision.
"If it had been in the UK, Germany, Hungary, or even Romania or Bulgaria, there would have been a process; it would have gone through the free market. Developers wanting to enter Serbia or already active would have had the chance to buy it," he explained.
In 2023, Vucic stated that he had met with Jared Kushner and had an "excellent conversation" with him about the "potential for large and long-term investments."
Donald Trump Jr. has made several visits to Belgrade after Affinity Global announced that a Trump International hotel would be included in the project. It seems that Trump Jr.'s role will be limited to the hotel planned in the project, according to the BBC.
A corruption scandal raises questions
In addition to the way the project was awarded, the question arises whether a commercial development should even take place here. Even in its current state, the site remains loaded with architectural and historical significance.
The buildings were originally built to welcome visitors to the capital of the Socialist Federal Republic of Yugoslavia led by Tito. Architect Nikola Dobrovic created two structures on either side of Nemanjina Street, which, when viewed together, took the form of a gate.
The design also reflects the contours of the Sutjeska Gorge, the place where Yugoslav partisans achieved a crucial victory against Nazi forces in 1943.
In 2005, the buildings were granted protected monument status under Serbia's cultural heritage laws.
"No serious city builds its modern future by demolishing its historic centers and cultural monuments," says Estela Radonjic Zivkov, former deputy director of the Republican Institute for the Protection of Monuments in Serbia. "For Serbia to progress, it must first respect its own laws and cultural heritage. According to Serbian legislation, the protection granted to this site cannot be revoked," she insists.
The controversy escalated after the police arrested the official who approved the removal of the protected status of the Ministry of Defense complex on May 14.
According to Serbian prosecutors, Goran Vasic, the interim director of the Republican Institute for the Protection of Cultural Monuments, admitted to fabricating an expert opinion that was used to justify the status change. He is charged with abuse of office and falsification of official documents.
Vasic's confession to investigators has been used by those opposing the project as evidence that Jared Kushner received preferential treatment. The Serbian government denies this.
Currently, it is not clear at what stage the Affinity Global project - with Trump International Hotel and all it entails - is. Vucic denies that there is any issue with its implementation, and at a meeting of European leaders in Tirana, he emphasized that "there has been no falsification whatsoever."
T.D.