Beachfront blues
This time of year the imagination inevitably turns to the sound of crashing waves and the sun-drenched beach. Many of us wouldn't mind having our own sandy stretch in the back yard to enjoy at our leisure - and for the real-estate investor it's easy to imagine how easy it could be to turn those banks into bucks. After all, who wouldn't want to buy their own piece of beachfront property?
But in case you haven't noticed, the Polish coast doesn't exactly resemble the mansion-dotted French Riviera nor boast the same number of swanky hotels as Miami. It's been over 15 years since the fall of communism, so where is the development?
Don't bank on it
It turns out that if you're looking to buy beachfront property - either at the Baltic coast or on a lake - you're in for a huge headache. Bureaucracy and environmental regulations are drastically discouraging investment, despite high demand.
Jacek Maniuk, senior agent for residential property at real-estate firm Ober Haus' Gdańsk branch, says that while we're acquainted with the inconveniences of Polish bureaucracy, the rules and regulations surrounding developing property on the beach are especially labyrinthine. According to him, officers at the Sea Office (Urząd Morski), which regulates construction and development at the seaside, make seemingly arbitrary decisions.
"There are piles of office papers required to do anything," he says. "I have a client who owns a piece of land on the banks of the Gulf of Gdańsk, and the Sea Office, saying it was protecting the cliff banks, wouldn't let anybody build anything within a distance 100 meters of it. But even if the project had satisfied everybody at the Office, he still wouldn't have received permission to build for the simple fact that the Sea Office won't give a positive opinion for this location."
100-meter limits
That 100-meter restriction applies to lake-front property as well, making it close to impossible to build a home or business on the beach. Maniuk describes one of the stranger parts of the law: "In Polish law there is something like this: if you have a plot of land with water on it, and it's standing water, then it's yours. But if it's running, then according to the law it must be public property, property of the State Treasury. It is not allowed to have running water [on your property].
"I heard of an event when a farmer simply wanted to dig himself a ditch to drain some water from a pond on his property. But there was a source, and water began flowing into and out of it. It became a river. Because of this, the gmina took away his land, since you can't have running water, and gave him a new plot."
Similar stories abound. Disappointing really, considering the huge demand for Baltic sea vistas.
"Plenty of people want a view of the sea at least, so they agree to a high floor in a skyscraper in a neighborhood with a distance from the coast, for example, just so they can look at the sea from their balcony," says Maniuk.
Still, several companies have recognized the demand and are trying to capitalize on it. Europejski Fundusz Hipoteczny (EFH) was recently granted permission to build a combination hotel/conference center on the shores of Tałtowisko Lake, in the Mazury lake district. When finished, the complex will hold a 232-room, four-star hotel, as well as a state-of-the-art surgical theatre where observers can watch operations - the first of its kind in Poland. The plan is projected to cost some EUR 30 (zł.123) million.
Muddy waters
Investments like that usually make city officials' mouths water with dreams of tax and tourist dollars - so you'd expect that local government would be itching to get it built. Not so, says Maciej Fenicki, EFH's project manager for the investment. Though it just recently got the go-ahead, the first stages of the project began in 1999.
"It's not normal that you have to wait for six years to start your investment. It is out of order. But that's living in Poland and as far as I know it's a standard here. Especially in this undeveloped part in Mazury," he says.
He puts the delay down to bureaucracy surrounding arranging infrastructure such as roads and electrical lines for the property. And after all that waiting, the hotel still won't be able to offer clients direct access to the beach. In compliance with Polish law, the complex will be 100 meters from the shore.
"The law says you are not allowed to build something which is closer than 100 meters and our hotel is further than that. We bought this piece of land, which is 10 hectares, and the shape of it allows us to build it in such a way that it doesn't collide with the meters to the beach."
Still, the 100-meter law means beachgoers will have to first cross a road and a lawn if they want to lie on the sand. That's not too terribly inconvenient, argues Fenicki, but he also concedes that at coastal and lakefront resorts in other countries, the beach is right in the back yard.
EFH, therefore, is not focusing on the center's proximity to the beach as its primary selling point. "The beach is not the main attraction," says Fenicki. Instead, it will be billed as a convenient extra-Warsaw gathering place, which will help it during the long tourist off-season from October to April - another major disincentive to investing in beachfront property.
Think renovation
But for those still undaunted, Maniuk suggests finding a place on the waterfront where some development already exists.
"For example old relaxation centers - the communist ones that the big companies owned. Mines from Silesia, for instance, had their own centers on the sea. These are big areas generally run-down and badly equipped, so they have a lot of room, and very often have direct access to the beach. You can do a lot of things there, because the building allowance already exists. You don't have to break the doors because they're already open," he says. If you're willing to take the time and money to improve one of those places, Maniuk says you can make a tidy profit. Strangely though, he has not yet been approached with a request to find one.
"From my experience it's not too popular, mainly because people intuitively suspect that there will be difficulties with the regulations," he says.
Hit the beach
So, for the time being, those interested in profiting from the beach will have to show some creativity. Take the example of vodka-maker Bols.
Three years ago, it saw an opportunity in a bar on the beach. Instead of jumping through the hoops required to build one on already existing sands, Bols (leading a group of several investors) brought in some of its own - creating an artificial strand in the town of Dębki.
The idea was so successful that the move was repeated this year, in Sopot as well as Warsaw, where the company collected some 500 tonnes of sand from the banks of the Vistula and piled it up along the riverbank just opposite the Royal Castle. The project was inspired by the makeshift beach constructed in Paris on the banks of the Seine every summer, and since its opening The Beach in Warsaw has been packed with partiers and sunbathers alike.
But the question remains: Will it ever be worthwhile to plough investment cash into Polish shores?
"It may be an open question," says Maniuk. "But it's necessary to start some kind of lobby, and maybe it's possible. If you don't beat your head against a couple of walls you can arrange it. It's just necessary to be patient and keep trying."
But in case you haven't noticed, the Polish coast doesn't exactly resemble the mansion-dotted French Riviera nor boast the same number of swanky hotels as Miami. It's been over 15 years since the fall of communism, so where is the development?
Don't bank on it
It turns out that if you're looking to buy beachfront property - either at the Baltic coast or on a lake - you're in for a huge headache. Bureaucracy and environmental regulations are drastically discouraging investment, despite high demand.
Jacek Maniuk, senior agent for residential property at real-estate firm Ober Haus' Gdańsk branch, says that while we're acquainted with the inconveniences of Polish bureaucracy, the rules and regulations surrounding developing property on the beach are especially labyrinthine. According to him, officers at the Sea Office (Urząd Morski), which regulates construction and development at the seaside, make seemingly arbitrary decisions.
"There are piles of office papers required to do anything," he says. "I have a client who owns a piece of land on the banks of the Gulf of Gdańsk, and the Sea Office, saying it was protecting the cliff banks, wouldn't let anybody build anything within a distance 100 meters of it. But even if the project had satisfied everybody at the Office, he still wouldn't have received permission to build for the simple fact that the Sea Office won't give a positive opinion for this location."
100-meter limits
That 100-meter restriction applies to lake-front property as well, making it close to impossible to build a home or business on the beach. Maniuk describes one of the stranger parts of the law: "In Polish law there is something like this: if you have a plot of land with water on it, and it's standing water, then it's yours. But if it's running, then according to the law it must be public property, property of the State Treasury. It is not allowed to have running water [on your property].
"I heard of an event when a farmer simply wanted to dig himself a ditch to drain some water from a pond on his property. But there was a source, and water began flowing into and out of it. It became a river. Because of this, the gmina took away his land, since you can't have running water, and gave him a new plot."
Similar stories abound. Disappointing really, considering the huge demand for Baltic sea vistas.
"Plenty of people want a view of the sea at least, so they agree to a high floor in a skyscraper in a neighborhood with a distance from the coast, for example, just so they can look at the sea from their balcony," says Maniuk.
Still, several companies have recognized the demand and are trying to capitalize on it. Europejski Fundusz Hipoteczny (EFH) was recently granted permission to build a combination hotel/conference center on the shores of Tałtowisko Lake, in the Mazury lake district. When finished, the complex will hold a 232-room, four-star hotel, as well as a state-of-the-art surgical theatre where observers can watch operations - the first of its kind in Poland. The plan is projected to cost some EUR 30 (zł.123) million.
Muddy waters
Investments like that usually make city officials' mouths water with dreams of tax and tourist dollars - so you'd expect that local government would be itching to get it built. Not so, says Maciej Fenicki, EFH's project manager for the investment. Though it just recently got the go-ahead, the first stages of the project began in 1999.
"It's not normal that you have to wait for six years to start your investment. It is out of order. But that's living in Poland and as far as I know it's a standard here. Especially in this undeveloped part in Mazury," he says.
He puts the delay down to bureaucracy surrounding arranging infrastructure such as roads and electrical lines for the property. And after all that waiting, the hotel still won't be able to offer clients direct access to the beach. In compliance with Polish law, the complex will be 100 meters from the shore.
"The law says you are not allowed to build something which is closer than 100 meters and our hotel is further than that. We bought this piece of land, which is 10 hectares, and the shape of it allows us to build it in such a way that it doesn't collide with the meters to the beach."
Still, the 100-meter law means beachgoers will have to first cross a road and a lawn if they want to lie on the sand. That's not too terribly inconvenient, argues Fenicki, but he also concedes that at coastal and lakefront resorts in other countries, the beach is right in the back yard.
EFH, therefore, is not focusing on the center's proximity to the beach as its primary selling point. "The beach is not the main attraction," says Fenicki. Instead, it will be billed as a convenient extra-Warsaw gathering place, which will help it during the long tourist off-season from October to April - another major disincentive to investing in beachfront property.
Think renovation
But for those still undaunted, Maniuk suggests finding a place on the waterfront where some development already exists.
"For example old relaxation centers - the communist ones that the big companies owned. Mines from Silesia, for instance, had their own centers on the sea. These are big areas generally run-down and badly equipped, so they have a lot of room, and very often have direct access to the beach. You can do a lot of things there, because the building allowance already exists. You don't have to break the doors because they're already open," he says. If you're willing to take the time and money to improve one of those places, Maniuk says you can make a tidy profit. Strangely though, he has not yet been approached with a request to find one.
"From my experience it's not too popular, mainly because people intuitively suspect that there will be difficulties with the regulations," he says.
Hit the beach
So, for the time being, those interested in profiting from the beach will have to show some creativity. Take the example of vodka-maker Bols.
Three years ago, it saw an opportunity in a bar on the beach. Instead of jumping through the hoops required to build one on already existing sands, Bols (leading a group of several investors) brought in some of its own - creating an artificial strand in the town of Dębki.
The idea was so successful that the move was repeated this year, in Sopot as well as Warsaw, where the company collected some 500 tonnes of sand from the banks of the Vistula and piled it up along the riverbank just opposite the Royal Castle. The project was inspired by the makeshift beach constructed in Paris on the banks of the Seine every summer, and since its opening The Beach in Warsaw has been packed with partiers and sunbathers alike.
But the question remains: Will it ever be worthwhile to plough investment cash into Polish shores?
"It may be an open question," says Maniuk. "But it's necessary to start some kind of lobby, and maybe it's possible. If you don't beat your head against a couple of walls you can arrange it. It's just necessary to be patient and keep trying."
