Capital slow to trickle down to Torun
By : Anna Staniszewska
Torun, located on the right bank of the Wisla river, was a prosperous German city established by the Teutonic Knights in 1232. The city benefited from its location at a crossroads between Western Europe and Poland as well as its proximity to Gdansk. Trade, heavy industry and mills all contributed to the city's strong economy, but today only heavy fortifications, a castle and historic monuments remain from the city's glorious past.
"Torun will never be the same," said Wieslaw Radomski, head of Doradca, a legal firm offering real estate advice. "It's hard to do business here, even if the city is pretty."
Strolling along the picturesque streets of Old Town is reminiscent of Krakow.
Despite Torun's location, it has yet to catch up with other medium-sized cities. One reason for the city's lack of development is that it lost its sole voivodship status to Bydgoszcz, located 40 kilometers away. Since 1998, Torun and Bydgoszcz have shared a voivodship with the former being the headquarters of the regional Parliament and the latter functioning as the administrative center for the Kujawsko-Pomorskie Voivodship.
"I don't think (the split) was a good idea," said Dariusz zelazkiewicz, retail director of Torun-based Budlex, a construction company. He said that the city could be more competitive but until investors arrive it won't happen. He added that one of the strengths of Torun is its skilled and educated citizenry.
Nicolaus Copernicus University is considered one of the best in Poland, but the city has failed to capitalize on its status. "Young people who want a career don't stay here," Radomski said. But despite the lack of foreign investment, there is enough business in Torun to keep unemployment below the national average.
A prime area of employment is tourism. Torun has been dubbed the Krakow of the North, and boasts a number of attractions to keep tourists coming. The city was listed by UNESCO as a World Heritage site in 1997. "Tourism is one of the main branches of the economy," said Janusz Strzesniewski, deputy mayor of the city. "We're proud of what we have."
The renovated hotel Petite Fleur clashes with its neglected neighbours.
But hotel development has yet to take off with most hotels and guest houses full for much of the year. Recently, a couple of mansions have been renovated for guest use like Pod Roza in the Old Town. Radomski said the lack of hotels has contributed to the city's image as a transit town. People go through Torun on their way to Gdansk, without stopping for a day or two.
Beyond the scarcity of hotels, entertainment has yet to develop in the city. "We are giving the green light to enterprises around the Old and New Towns," Strzesniewski said. According to Radomski, the city authorities and tourist companies should work together to attract and keep tourists in the city. "It has improved," he said. But when it comes to investments, there are few companies with foreign capital.
A multinational joint venture, Swiss Nestle and U.S. General Mills, has invested in cereal producer Torun Pacific, and British Sugar has invested in local producer Sugarpol. No multinationals have their headquarters in Torun. To date local firms make up most of the city's business. The most prominent firms include Budlex, window producer DGG, and clock and water meter manufacturer Metron. Other companies include food producer Nadwislanka and apparel firm Torpo. There are also a number of companies on the verge of bankruptcy. These include chemical fiber manufacturer Elana, and Kopernik, where the famous Torun gingerbread is baked.
Faces of Torun: renovated facades in the Old Town
"Companies in Torun desperately need strategic investors," Radomski said. City Hall's Strzesniewski said he would look closely at investors to see if they are right for the city. "We want to maintain the atmosphere of the city," he said. He said heavy industry or environmentally hazardous businesses would not be given licenses.
Strzesniewski said the city would never be the same as Warsaw or Krakow for attracting investors but among mid-size towns it has great potential. "Many investors have been looking at the city," he said. He said that within the next five to 10 years, Torun will attract much of the same foreign capital as Warsaw. "Torun will soon have its chance," he said.
On the other hand, Radomski said Torun missed the boat in the early and mid-1990s when there was a wave of investments coming into Poland.
Residential
Almost all property sectors in Torun remain underdeveloped, with residential being at the top of the list. With 200,000 people, Torun ranks third in Poland in terms of the number of apartments built per capita annually. In 1999, 1,495 apartments were built (2% of the national total). Still, the figures are falling. Budlex is the leader in the residential market with additional developments in Bydgoszcz. There are also a few construction companies and housing cooperatives, offering apartments from zl. 2,000 to zl. 3,500 per square meter. Average prices range from zl. 2,300 to zl. 2,500. "People tend to buy small and medium apartments," Radomski said. "Smaller units are selling like hot cakes," Budlex' zelazkiewicz said. Modern luxury properties are also under construction. Fenced and guarded Panorama complexes cost more than zl. 3,000 per square meter. Radomski, however, doesn't see a bright future for the sector. He said that when construction incentives are over and interest rates remain high, Torun will face a slump in the number of apartments sold.
Office
At the moment, there is no class-A office space in Torun and existing class-B office stock amounts to 5,000 square meters. Unlike Krakow, mansions refurbished for offices are non-existent. Radomski said the Old Town could be a perfect location for many representative offices, but questions linger over who will pay for the renovations. An average firm pays zl. 40- zl. 100 per square meter monthly. The amount of prime office space will increase after four construction projects are completed, providing about 30,000 square meters of space.
Retail
Except for Geant and miniMal supermarket, which make up 23,000 square meters of retail space, Torun has no modern shopping malls. Ulica Szeroka serves as a shopping street linking the Old and New Towns. "They (the city authorities) could plan it better," Radomski said. "There are many small retail outlets owned by the city, which would earn more money if they were privatized." But as with other cities, ownership disputes abound in the Old Town.
Rents in commercial outlets in the city center vary from zl. 100-zl. 130 a square meter a month, whereas in supermarkets they range from DM 30-DM 60 a month. "We have a big project in the works," Strzesniewski said. He said they are planning to develop Centro'2000, a new center for Torun with office space, retail outlets and the city's first multiplex cinema, all to be located on ulica Czerwona Droga and ulica Chelminska, close to the Old Town.
Carrefour has bought a plot on ulica Olsztynska for zl. 36.4 million ($8.57 million), but construction hasn't started yet. Altogether 100,000 square meters of modern office space are in the planning stage.
Warehouse
Torun has no modern warehouse space available. Of the existing 10,000 square meters of stock, Nestle Pacific has 6,000 square meters. "Torun is not a city with large warehousing potential," Strzesniewski said.
