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Recession in the Kraków Style
Rzeczpospolita, 29.12.2003


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The legendary "New City," promised by Tishman Speyer Properties (TSP), is to cost 700 million dollars, but it still continues to exist on the paper only. The size of the largest projects currently in progress in Kraków, that is a business park, a multi-cinema and a shopping and entertainment mall, is tens of dollars only.

The "New City" is so old that it will soon be out in the treasury of the Kraków legend. All that started like in the legend of Princess Wanda who did not want a German. When municipal authorities announced in 1998 a competition for investors to develop the areas close to the main railway station, the German company ECE lost with the American TSP. Also local traders and the Polish capital have lost. It could not be the other way round, since the Americans put 700 million dollars on the table. No one has actually seen those monies, but an inflated balloon has streaked across the media, with the vision of the new city: a whole development district filled with shops, banks, hotels, offices, bowling alleys, cinemas, etc. Right now, in 2003, the whole project was to be completed.

A Shop Behind the Prison Walls
In 2003, it turned out that the shopping centre, would be constructed by … ECE, on 5 of 12 ha of land owned by TSP. The Germans are not susceptible to any extravagance. They are offering in the city centre (at 300 million dollars) a big, four-storey concrete box, with a windowless wall in Pawia Street, almost one-kilometre long, with parking yards, though not underground, but the top-floor ones. All that remains to the residents of Kraków is only to defend what is most precious to them, also from the marketing viewpoint, namely the urban landscape.

"An investor cannot be denied the issuance of the building permit, if the valid statement of land development conditions has already been issued to it. Although the statement includes directions as to the architectural form, they are difficult to enforce. The more so that, actually, we still do not know, what the investor wants to construct on its land plot, as there is a certain mystery about it. I think it will not be easy to reach a compromise," says Prof. Andrzej Wyżykowski, the Chief Architect of Kraków, who presided over the meeting of Municipal Urban and Architectural Committee that was reviewing the ECE design in respect of public space requirements.

One can only prompt that the statement of land improvement conditions is a local law. When the Berlin Senate did not like the design for the Polish embassy building, and considered it not to match the surrounding buildings, the municipal authorities of Berlin did not agree to the project implementation. Does the City Council of the Capital and Royal City of Kraków have to accept a nightmare prison wall in the centre of the city, which surely is nicer than the German capital? In the whole TSP history, the most interesting part is the Company’s balance sheet, showing 92 million zlotys (2nd quarter 2003) spent on the "New City." It is only slightly less than the scheduled cost of another Kraków-based project, which is real, and not virtual.

Without Waiting for Miracles
It is without any media campaign and without the participation of newspaper headline politicians, that the construction of a business park has been taking place in Wadowicka Street since last year. The project cost will be about 22 million euros. Buma Square will be constructed on a 3.5 ha land plot. As late as by 2000, the area was occupied by buildings of the Anczyc Printing House that dated back to the turn of the 1960s.

"We restructured the printing house and then sold it. It was moved into another place, it still operates and yields profits," says Mr. Piotr Michalski, the Buma Square project executive. The project investor is a house building company Buma System that has constructed 1.5 thousands of flats and 250 single-family houses. "We are developing a new business, based on the Company’s structure. We did not intend to become involved in trade, but in tenant-friendly office spaces," assures Mr. Michalski.

Tenants and their clients have already at their disposal a friendly cuisine – a lunch bar of a fashionable Italian "Cherubino" restaurant. In future, there will be a recreational and fitness centre, with a swimming pool. The whole complex is composed of several buildings, including a seven-storey building in the front, with an inside, 12-metre high atrium and a large congress hall. In the part that has already been transferred for use, more than 13,000 sq.m. of office space has already been leased. In addition to shops and salons of renowned brands, there are companies of the high-tech sector, telecommunications providers and software producers.

Following the project completion, scheduled to take place in the second quarter of 2005, Buma Square will be able to offer 31,000 sq.m. of air-conditioned and ventilated office space, furnished with the most up-to-date IT and telecommunications systems. A business park instead of a depreciated, industrial plant is an excellent example of revitalisation, conducted by a private company and without the public sector’s share.

Competitors Don’t Sleep
Several hundred metres from the Main Market Square, in Karmelicka Street, a multi-function complex is being constructed: an eight-screen cinema, a hotel with 190 rooms and congress part, as well as a multi-level parking lot. Such a large land plot in the very centre of the city could be left intact only because, still in the 1990s, it was a military training yard for soldiers living in the vast, barrack buildings that dated back to the 19th century. Today the former barrack buildings house a library, while the yard revealing the gable walls of the adjacent residential buildings will at last be developed.

"This is going to be one of the most modern facilities in Kraków, and, at the same time, the one that shows best the co-existence of old and new architecture," declares Mr. Romuald Loegler, the designer of the whole complex. Warsaw-based company, with the name of Portico-Galicja, is the project investor. The name of the company demonstrates that the fashion for the Austrian-Hungarian Empire has even reached Warsaw. The completion of that new project, valued at 30 million dollars, is scheduled for the second half of 2004.

The new Kazimierz Shopping Mall was described by us not so long ago, on the occasion of its corner-stone ceremony. It can only be added that the functional programme of that GTC project (the project value is 70 million euros) is diversified and varied, and provides for, in addition to different size shops, bars and cafeterias, also for a ten-screen cinema. It is most clear that the investors, taking into account the virtual character of the "new city" decided to enter that place on the market that was supposed to be occupied by the Americans.

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