A Belgrade landmark bombed by Nato could get Trump makeover

One of the first sights that greets arrivals to the centre of Serbia’s capital Belgrade are government buildings in an advance state of collapse. Nato planes bombed them back in 1999 – and they remain in much the same condition.

The message they deliver to visitors could be “welcome to Serbia, our recent history has been tumultuous and complicated – and we still haven’t quite finished processing it”.

Like a smile with a row of broken teeth, the Defence Ministry buildings are still standing. But they clearly took a serious hit when Nato intervened to stop Serbia’s then military campaign in Kosovo.

As a member of the Western military alliance, the US was implicated in the bombing.

Given that history, last year it came as something of a jolt for Serbians when the government struck a deal with a company called Affinity Global to redevelop the site into a $500m (£370m) luxury hotel and apartment tower complex.

Not just because the business concerned is American, but due to the fact its founder is Jared Kushner, best-known as Donald Trump’s son-in-law. And because the planned development is due to be called Trump Tower Belgrade.

While these has now been a major twist in the tale that puts the scheme in some doubt, the Serbian government’s decision to strike the deal wasn’t too surprising.

Before he became US president in 2016, Donald Trump himself expressed interest in building a hotel on the site.

The move also fits a government pattern – as alleged by the Serbian opposition – of allowing foreign investors to profit from public property.

They cite, as a prime example, the Belgrade Waterfront residential and retail project, constructed by Emirati developers on land owned by Serbia’s railways.

Where there used to be rusting rolling stock and derelict sidings, there is now a swish shopping centre, smart restaurants and the oddly bulbous, 42-storey Belgrade Tower. It is not to everyone’s taste.

That, however, was a brownfield site, rather than a city centre landmark. The Defence Ministry complex is an entirely different proposition – not least because it acts as a memorial to the casualties of the 1999 bombing campaign.

It is also a highly visual reminder of why the vast majority of Serbians remain opposed to Nato, and feel sympathetic towards Russia.

In that context, granting a US developer a 99-year lease on the site, reportedly for no upfront cost, is a bold move.

But Serbia’s president, Aleksandar Vucic, is unapologetic. “It’s important to overcome the burden from 1999,” he tells the BBC.

“We are ready to build better relations with the US – I think that is terribly important for this country.”

That view garners a degree of sympathy from Belgrade’s international business community.

Foreign direct investment inflows have more than tripled over the past decade. But GDP per capita remains low compared to EU member states. It stands at just one third of the bloc’s average.

To keep those figures moving in the right direction, attracting new investors is vital. And while the financial details of the Ministry of Defence development have not been revealed, the New York Times has reported that the Serbian government will get 22% of future profits.

“For a small and specific market – ex-Yugoslavia, outside the EU – all publicity is good publicity,” says James Thornley, a former senior partner at KPMG Serbia, who is now a partner at financial consultants KP Advisory in Belgrade.

“If you have major international players coming in, it’s a pull, it’s a draw. You’re getting the name and opportunity out there.”

Mr Thornley has lived in Serbia for 25 years and is fully aware of the sensitivities surrounding the Defence Ministry complex. But he believes that views would change once people saw the benefits of the development.

“That site is an eyesore and should be resolved,” he says. “Nothing’s happened for 26 years, let’s get it sorted out.”

But not everyone involved with international investment in Serbia is so enthusiastic.

Andrew Peirson was the managing director of global real estate giant CBRE in Southeast Europe, and now holds the same role at iO Partners, which focuses entirely on the region.

He admits that the shattered state of the Defence Ministry complex is “not good for the city’s image”, and that the deal to develop the site is “probably good news, because it shows the country can attract big investments”.

But he has serious qualms about how the government struck the deal with Affinity Global. Mr Peirson says that there was no open tendering process that would have allowed other firms to bid for the site.

“With state-owned land, you should be able to prove you’re getting market value for the site. The way you usually do that is to run a proper tender process,” says Mr Peirson.

“If it had been in UK, Germany, Hungary or even Romania or Bulgaria, there would have been a process; it would have gone through the open market. Developers that were looking to enter Serbia, or already active, would have been given the chance to buy it themselves.”

Back in 2023 Vucic said he met with Kushner and had an “excellent conversation” with Jared Kushner regarding the “potential for large and long-term investments.”

And Donald Trump Jr has since made follow up visits to Belgrade after Affinity Global announced that a Trump International Hotel would form part of the development. The role of Trump Jr and the family business is thought to be limited to the hotel.

Questions have been raised about the Trumps making commercial deals while Donald Trump is in the White House but his press secretary has rejected any suggestion he is profiting from the presidency.

Mr Peirson is concerned that the nature of the Ministry of Defence building deal may irk businesses which have already committed to Serbia.

“If I’m an investor already putting tens or hundreds of millions into the country, I would feel sad that I hadn’t been given the chance,” he says.

Both Affinity Global and the Serbian government did not respond to requests for comments about how the deal over the site was agreed, and whether or not there was an open tendering process.

Then there is the question of whether a commercial development should be taking place at all. The site, even in its current state, remains architecturally and historically significant.

The buildings were originally constructed to welcome visitors to the capital of Tito’s Socialist Federal Republic of Yugoslavia. Architect Nikola Dobrovic created two structures on either side of Nemanjina Street which, viewed together, took the form of a gate.

The design also echoes the contours of Sutjeska Gorge, the site of the Yugoslav Partisans’ pivotal victory over Nazi forces in 1943. And in 2005, it was granted protected status under Serbia’s cultural heritage laws.

“No serious city builds a modern future by demolishing its historical centres and cultural monuments,” says Estela Radonjic Zivkov, the former deputy director of Serbia’s Republic Institute for the Protection of Monuments.

“For Serbia to progress, it must first respect its own laws and cultural heritage,” she insists. “According to Serbian law, it is not possible to revoke the protection of this site.”

But just when it seemed the site’s fate was sealed, Serbian organised crime prosecutors delivered a twist worthy of a Hollywood thriller.

On 14 May, police arrested the official who had given the green light for the lifting of the Defence Ministry complex’s protected status.

Prosecutors said Goran Vasic, the acting director of the Republic Institute for the Protection of Cultural Monuments, had admitted to fabricating an expert opinion which had been used to justify the change of status. He faces charges of abuse of office and forgery of official documents.

This admission has been seized on by those opposed to the project as evidence Kushner got preferential treatment. The Serbian government denies this.

Where this leaves the Affinity Global project – Trump International Hotel and all – is not entirely clear.

Repeated efforts to arrange an interview with the company have been unsuccessful, though it did issue a statement insisting that Mr Vasic had “no connection to our firm”, adding that it would “review this matter and determine next steps”.

Vucic, meanwhile, denies there is any problem with the development. During a meeting of European leaders in Tirana, he said “there was not any kind of forgery”.

Still, it seems the Defence Ministry’s shattered visage will remain unchanged for a while at least. And thanks to the Trump connection, it will offer even more of a talking point for first-time visitors to Belgrade.