The Soviet Union collapsed in 1991. Economic and political chaos prevailed in the wake of the difficult transition to democracy. Russia had an educated work force and a wealth of natural resources, but it lacked specialists with management skills to develop a private sector.

Russia strategists and watchers became convinced that the country could only get on its feet with a massive effort to train a generation of managers in world-standard business practices.

In 1992, St. Petersburg State University forged a partnership with the University of California, Berkeley and the Hass School of Business at UC Berkeley. Faculties from both universities worked together to create an institution of higher education in management. The new School of Management (SOM) was founded in 1993 with the vision of producing generations of extraordinary business leaders for a new Russia.

In six years the SOM has grown from an undergraduate program with 35 students to its current enrollment of 500 young men and women in undergraduate, masters, and PhD programs. SOM faculty and staff have grown from eight to over 50 since 1993.

As SOM has grown, the need for a larger space has grown as well. The city of St. Petersburg and the University worked together to find a suitable facility that could accommodate a full-fledged business school campus for 700 Undergraduate, Masters and PhD students. The absence of private ownership of property instilled during communism in the USSR made the reassignment of a building from the city to the University a difficult task. In 1996, the City of St. Petersburg Municipal Property Committee located to adjoining 18th century palaces on Basil's Island, near the Main University buildings. The SOM faced two challenges:

• The transfer of property ownership to allow St. Petersburg to retrofit this palace to restore and preserve its historic significance while accommodating the needs of a 21st century business school.
• Conducting a capital campaign in an environment unaccustomed to private philanthropy.

In 1997, the Yakovlev building was officially transferred by the city of St. Petersburg to the University. It was an unusual act of philanthropy by the city to a federally chartered institution.

The Center for Citizen Initiatives (CCI) is the fiscal sponsor for the SOM building renovation project.