Back to life, back to reality

Apologies for the cliché – but yes, we can. As developers and city officials are getting closer to finding a common language, there is a chance that a large number of post-industrial sites will be brought back to life across Central and Eastern Europe

Mladen Petrov

You can hear many similar stories these days. Here is the Czech version. At the end of the 19th century  Vysočany became one of the centres of industrial and technical development in the Czech Republic – truly the pride of Czech industry, the home of factories such as Emil Kolben’s ‘Kolbenka’. And this is how things remained until the end of the last century. As the boundaries of Prague kept on sprawling outwards, the 250-ha plot was getting closer and closer to the city centre. Meanwhile, something in Vysočany had changed for good. It was only few years ago when it was finally decided that its industrial past was exactly that – its past. So what comes next? The developers of course.

They didn’t have to think twice. In a city such as Prague one is rarely presented with such attractive opportunities on a plate. Today an ambitious plan for the Nové Vysočany district is being realized. Developers such as Codeco, Finep, CPI Group, BCD Group, Broomwell Developments and IMOS Development have entered the scene. A few other leading developers have also located projects nearby. There is a lot to be done in the course of the next 7 to 12 years. And the price tag for the whole scheme? Around EUR 2.7 bln. Pricey, but worth it. Upon completion, 40,000 new inhabitants are expected to work and live here, just 20 minutes away from the city centre.

Bold visions

This large-scale project is hardly an exception. Revitalization projects are now recognized as just one of the remedies for run-down city areas. On a 120-ha site in the Romanian city of Braşov, where Tractorul Braşov, the largest tractor-producing factory in the country was located, a modern district buzzing with life is to be built in the form of Coresi, a project being developed by Centrera Capital Partners. The scheme, covering 10 pct of Braşov’s area, is expected to take up to 15 years to complete in a EUR 1.5 bln investment. In Warsaw, Pirelli Pekao Real Estate (PPRE) is working to revive two post-industrial plots, covering 90-ha in the Bielany district of the capital. Sofia city council, on the other hand, is planning to turn the former Kremokovtzi steel factory into an exclusive suburb. In the view of the now former mayor of the capital Boiko Borisov, and the new prime minister of Bulgaria, this area has the potential to become “the new city of Sofia, just like those in London and Los Angeles.” Developers, however, are less excited, given the fact that the area is mostly polluted and badly connected with the city centre. In Serbia, the Port of Belgrade company also recently announced plans to revitalize the large under-developed area around the capital city’s port. According to the design, drawn up by Daniel Libeskind and Jan Gehl, this area would be divided into seven quarters. If everything goes to plan, Belgrade is expected to become one of the biggest construction sites in that part of Europe.

Hello, partner!

The successful realization of such a project, however, is a two-way street. It is now in the city’s best interest for councillors and developers to quickly find a common language. In Prague’s 9th district, developers, represented by the Nové Vysočany Association, and city officials seem to be getting along. “The way we see it the council should adopt the role of project coordinator. We are practically developing a new city and it lies in the district’s interest to make sure the project is carried out with a fair degree of precision. Developers often get carried away in the rush to maximize profits, and look to use the full potential of the plot. In a project like this the city can’t allow the breaking of the site into separate islands owned by developers. A clear vision is crucial and the city should be the one in charge of urban planning, being able to say no to a controversial idea that would harm future citizens’ interests,” argues Pavel Weishaupt, acquisition director at Codeco, a developer with a few office, retail and residential projects in the pipeline. Tomasz Chrystyna, senior asset manager at PPRE, echoes his Prague colleague: “We have the example of Miasteczko Wilanów in Warsaw, a large-scale project, where things got messy. The developers forgot about the initial concept and neglected the social aspect of their projects. A common thread is lacking behind all that residential development. That is what we need the city for: to make sure developers stick to the plan.”

Adam Vážanský, member of the district council of Prague-9, adds that: “We try to be as investor-friendly as possible and open to new ideas. There are also problems we can’t solve alone, such as environment-related issues. Obviously the industrial past of the area has had an impact, so public money also has to be used.”

Cold shower

The financial crisis, naturally, is also having a negative impact on cities’ budgets. The Union of Polish Metropolises (UPM), representing the twelve largest cities, recently became alarmed that they might be forced to deal with a significant budget gap by the end of the year, one of the side-effects of shrinking tax revenues. The Ministry of Finance has projected that this year tax revenue from individuals is to decline by 14.5 pct, while the income from companies will be down by 27.5 pct. For big Polish cities this means losing almost EUR 420 mln in 2009. For example, this year Warsaw is expected to receive around EUR 120 mln less from its citizens in taxes. As the cities’ revenues from other sources such as property sales are also declining, they are going to be forced to look for significant savings. Some infrastructure projects will be put on hold until better times return as a