Boca on the Black Sea

An American developer seeks to create the “Florida of the Caucasus.”

The real-estate developer doesn’t seem to see the bullet holes in the cement wall behind him. Or the mortar-scarred apartment buildings. Or the half-bombed mansions where trees sprout through wallpapered living rooms. All the real-estate developer seems to see in Abkhazia, this breakaway territory wedged between Georgia and Russia along the Black Sea, is opportunity.

“This place could be the Florida of the Caucasus,” Bruce Talley says, jabbing my arm with excitement as we walk between two filthy concrete hotels. Gorbachev, Khrushchev, and Stalin all built vacation homes in the area, their porches overlooking a string of empty beaches, turquoise water, and looming mountains that tinge peach at sunset. “This is the ideal subtropical paradise for 145 million Russians, and there is nowhere for them to stay.”

The fact that Abkhazia, a piece of land roughly the size of Puerto Rico, claims to be an independent nation; that Georgia vehemently claims it as its own; that a formidable queue of Russian tanks along the Georgian border defends its asserted sovereignty; that hundreds of thousands of refugees have fled from here in the past two decades, leaving their empty homes to crumble in the beautiful sunshine—these are all merely matters of detail. Talley, a South Dakota farm boy who served a stint in Alaska as a crab fisherman, made millions as a bond salesman in California, enjoying a lifestyle that afforded him Porsches (plural) and a Ferrari (metallic blue). He got into real-estate development six years ago and moved to southern Russia, convinced that a fortune can be made here (he’s currently developing a shopping center in Krasnodar).

In November, after receiving a personal invitation from Abkhazia’s de facto prime minister, Talley became the first American real-estate developer to open a firm here. (“We need Western investment,” Prime Minister Sergei Shamba told me. “Bruce is good for us.”) Talley now blogs, tweets, and maintains both a YouTube channel and a Facebook fan page—all to promote Abkhazia.

Talley’s moment of opportunity traces back to the confused crack-up of the Soviet Union, when the region of Abkhazia was incorporated into the new nation of Georgia. Independent-minded Abkhazians promptly set up their own government and managed to stave off Georgian authority. For most of the past 20 years, though, Abkhazia’s economy has been in a deep freeze, stymied by war with Georgia in the early ’90s and then by international blockades.

But Russia’s decision in 2008 to recognize Abkhazia as an independent nation (along with Georgia’s other breakaway region, South Ossetia) is now opening up Abkhazia to the world. At least that’s Talley’s pitch. With sovereign recognition came Russian-backed border security (tanks, long-range missiles, 3,000 troops), Russian cash (upwards of $120 million a year), an influx of Russian private investors, and more than a million tourists last summer alone. The newly revived real estate is suddenly primed for development.

As Abkhazia’s only ally in the region, Russia has been the first to take advantage. The former mayor of Moscow, Yuri Luzhkov, has bought beachfront property near Pitsunda, where he plans to develop a resort. The Russian government also plans to build a luxury resort, already nicknamed “Putin City,” sometime before the 2014 Winter Olympics in Sochi, Russia, just north of the Abkhaz border.

Of course, Georgia, which still claims legal control over Abkhazia, is officially aghast. Georgian diplomats say the de facto Abkhaz government has no authority to allow anyone—least of all their enemies in Moscow—to lease, develop, or privatize the Georgian beachfront. The U.S. and most of the international community support Georgia’s position. Partly as a result of this isolation, Abkhazia has ceded to Russia control over its railways, airport, and offshore oil exploration. The tiny territory has come to rely on Moscow for roughly 90 percent of its trade. But a handful of American and European policy experts are beginning to share Talley’s instinct: if Abkhazia’s going to develop anyway, maybe the West shouldn’t be left out in the cold.

“All our current policy does is push Abkhazia further into Russia,” Lincoln Mitchell, an associate research scholar at Columbia University’s Harriman Institute and a former director of the National Democratic Institute in Georgia, told me. “If we start a dialogue with Abkhazia, we could begin to drive a wedge between them and Russia. We have to build a relationship with the Abkhaz people before we have any influence there.”

Driving back down Abkhazia’s wending coast, Talley pointed to a series of decrepit, half-collapsed Soviet- era buildings. “I see a five-star hotel here,” he says, and “a family resort over there,” and “definitely something akin to a Club Med along the coast up here.” When a line of palm trees gives way to a view of the snowcapped Caucasus Mountains, Talley jabs my arm again. “Look! It’s like Big Sur meets Kauai!” And then he laughs. “Okay, so that’s a bit of a stretch. But just wait. You’ll see. This place will change so fast.”