City center held hostage by shipyard sale, development plan
Now, evidence of new investment runs from the Hansa Hotel on the riverfront in the heart of the Old Town, to the $110 million City-Forum complex, at present the site of Empik's Megastore and by year's end a new 143-room Holiday Inn, opposite the main railway station.
"This is the first chance to create the old and modern city after 200 years," said Mayor Tomasz Posadzki about downtown development.
But a major hurdle facing the mayor and investors is working out a coherent plan for commercial, industrial and residential use, in which the shipyard, the birthplace of Solidarity, plays a major role.
Among the early arrivals to Gdansk which pumped slightly more than $30 million into the local economy were Germany-based food processor Dr. Oetker, Australian-owned Brewpole, Finish-based confectionery Fazer, Danish electronics firm IKU and France-based Saur International.
But by mid-decade, the dye was cast for a changing landscape as retail firms and developers bought up plots of land, drawing blueprints for new shopping centers and retail outlets. Fastfood operators McDonald's and Pizza Hut/KFC also started sprouting operations during this second wave of investment in services.
Beyond the city center, the four-lane ring road expressway now is dotted with three large shopping centers at key intersections where Ikea and hypermarkets Auchan and Kings Cross have set up stores, and ground is being tilled for expansion.
The next wave of investment will be in office buildings and residential areas both in the heart and outskirts of the city, local officials and developers said.
But much of that development, especially prime real estate downtown, now awaits a new set of ground rules for investment. A forum of city planners in December established broad guidelines and, during a two-day July conference (See Calendar, page 4), business and city officials are scheduled to narrow the focus to block out and set strategic goals for particular areas, said Roman Sebastyanski, head of the city's real estate development office.
"There are about 15 land-use plans around the city center," Sebastyanski said. "They are not coordinated. So this is like fitting needs with a coherent plan."
That plan could form the basis for zoning rules covering about two-thirds of the downtown's more than 300 hectares of land. Zoning for about one-third of the area, including the Main Town emanating from Dlugi Targi, the Granary and Lead Islands across the Motlawa River, and the Grodzisko area on the downtown's western edge, is already mapped out and expected to receive the nod of city officials by the end of this month.
But as these areas have either mostly historical or well-established residential and service oriented uses, development potential is limited. A key part of the remaining area is unlocking the potential of former industrial sites, especially about 35 hectares in the northern part of downtown adjacent to and including the Gdansk Shipyard, which city planners have termed the New Town Development.
Although the hectarage represents only one-tenth of the total downtown area, being adjacent to the city center, it "fits the mold" of the downtown and the grounds are completely open for development, Sebastyanski says.
"There are no restrictions - a tabula rasa with few exceptions," he said. "Everything that is possible can be built there."
Currently, the site is occupied mainly by three plants: equipment manufacturer Elmor; abandoned, state-owned gas distributor Gazownia and the Gdansk Shipyard. The shipyard occupies about one-half of the overall hectarage.
Gazownia and Elmor have been on the market for two years, but unable to find investors most likely because of uncertainty surrounding the fate of the neighboring shipyard. Two years ago, when the national government pulled the plug on subsidies for the yard, negotiations began on the yard's sale.
Currently, three main investor groups are vying for the shipyard tender: Gdynia Shipyard, the Ship Building Corporation (KBO), and recently Szczecin Shipyard/Gdansk Repair Shipyard consortium. Shipyard officials have set an end-of-June deadline for the tender. If they don't meet the deadline, it won't be the first time.
"I'm an optimist, but not a big optimist, said Mayor Posadzki, adding that before the shipyard's collapse he discussed the city's interest in developing part of the yard's land.
Those consultations have continued with the receivers, who asked the city to hold back on those plans until new owners were in place. But we are passed that point, Posadzki says.
The original plan was for the yard's new investor to carve out about 15 hectares for city development. Another option now is that the receiver could sell the plot separately with the city leading the planning process.
From the point of view of land development, the latter option is best, Posadzki says. But from the perspective of harmonizing business development, production and employment, finding a new shipyard owner is key, he said.
In its heyday during the 1970s, the shipyard employed 16,000 workers, a figure which halved by 1996 and now stands at less than 2,000 and threatens to fall further if money is not pumped into the yard.
Growth in the service sector, the mayor said, is mainly responsible for bringing unemployment from 14.2% in 1993 to 2.5% in 1997. But also during the last two years, more than $150 million has gone into new production facilities.
Recent projects in the Port of Gdansk include Baltic Malt's DM 40 million plant (owned by Weissheimer Maltz Fabrik), a $80 million Europort grain terminal (backed by Royal Bank of Canada and European Bank for Reconstruction and Development) and Gaspol's $40 million liquid petroleum terminal, said Ryszard Zdeb, general director of Baltic Malt.
During the next two months, the Port Authority will launch a tender for a $400-$800 million container terminal, he says. Privatization of state-owned Rafineria Gdanska, set to begin next month, also promises follow-on investment.
The city is also looking at development of hi-tech and industrial parks.
U.S.-based electronics firm Eaton Controls, which inherited a small electronic switch facility in a buyout of Dutch-based IKU, officially opened its new production plant earlier this month, just west of the airport Port Lotniczy Gdansk-Trojmiasto. Dutch software producer Olicom, which bought out U.S.-based CrossCom, is scheduled to move into a new site by year's end.
"This is the first chance to create the old and modern city after 200 years," said Mayor Tomasz Posadzki about downtown development.
But a major hurdle facing the mayor and investors is working out a coherent plan for commercial, industrial and residential use, in which the shipyard, the birthplace of Solidarity, plays a major role.
Among the early arrivals to Gdansk which pumped slightly more than $30 million into the local economy were Germany-based food processor Dr. Oetker, Australian-owned Brewpole, Finish-based confectionery Fazer, Danish electronics firm IKU and France-based Saur International.
But by mid-decade, the dye was cast for a changing landscape as retail firms and developers bought up plots of land, drawing blueprints for new shopping centers and retail outlets. Fastfood operators McDonald's and Pizza Hut/KFC also started sprouting operations during this second wave of investment in services.
Beyond the city center, the four-lane ring road expressway now is dotted with three large shopping centers at key intersections where Ikea and hypermarkets Auchan and Kings Cross have set up stores, and ground is being tilled for expansion.
The next wave of investment will be in office buildings and residential areas both in the heart and outskirts of the city, local officials and developers said.
But much of that development, especially prime real estate downtown, now awaits a new set of ground rules for investment. A forum of city planners in December established broad guidelines and, during a two-day July conference (See Calendar, page 4), business and city officials are scheduled to narrow the focus to block out and set strategic goals for particular areas, said Roman Sebastyanski, head of the city's real estate development office.
"There are about 15 land-use plans around the city center," Sebastyanski said. "They are not coordinated. So this is like fitting needs with a coherent plan."
That plan could form the basis for zoning rules covering about two-thirds of the downtown's more than 300 hectares of land. Zoning for about one-third of the area, including the Main Town emanating from Dlugi Targi, the Granary and Lead Islands across the Motlawa River, and the Grodzisko area on the downtown's western edge, is already mapped out and expected to receive the nod of city officials by the end of this month.
But as these areas have either mostly historical or well-established residential and service oriented uses, development potential is limited. A key part of the remaining area is unlocking the potential of former industrial sites, especially about 35 hectares in the northern part of downtown adjacent to and including the Gdansk Shipyard, which city planners have termed the New Town Development.
Although the hectarage represents only one-tenth of the total downtown area, being adjacent to the city center, it "fits the mold" of the downtown and the grounds are completely open for development, Sebastyanski says.
"There are no restrictions - a tabula rasa with few exceptions," he said. "Everything that is possible can be built there."
Currently, the site is occupied mainly by three plants: equipment manufacturer Elmor; abandoned, state-owned gas distributor Gazownia and the Gdansk Shipyard. The shipyard occupies about one-half of the overall hectarage.
Gazownia and Elmor have been on the market for two years, but unable to find investors most likely because of uncertainty surrounding the fate of the neighboring shipyard. Two years ago, when the national government pulled the plug on subsidies for the yard, negotiations began on the yard's sale.
Currently, three main investor groups are vying for the shipyard tender: Gdynia Shipyard, the Ship Building Corporation (KBO), and recently Szczecin Shipyard/Gdansk Repair Shipyard consortium. Shipyard officials have set an end-of-June deadline for the tender. If they don't meet the deadline, it won't be the first time.
"I'm an optimist, but not a big optimist, said Mayor Posadzki, adding that before the shipyard's collapse he discussed the city's interest in developing part of the yard's land.
Those consultations have continued with the receivers, who asked the city to hold back on those plans until new owners were in place. But we are passed that point, Posadzki says.
The original plan was for the yard's new investor to carve out about 15 hectares for city development. Another option now is that the receiver could sell the plot separately with the city leading the planning process.
From the point of view of land development, the latter option is best, Posadzki says. But from the perspective of harmonizing business development, production and employment, finding a new shipyard owner is key, he said.
In its heyday during the 1970s, the shipyard employed 16,000 workers, a figure which halved by 1996 and now stands at less than 2,000 and threatens to fall further if money is not pumped into the yard.
Growth in the service sector, the mayor said, is mainly responsible for bringing unemployment from 14.2% in 1993 to 2.5% in 1997. But also during the last two years, more than $150 million has gone into new production facilities.
Recent projects in the Port of Gdansk include Baltic Malt's DM 40 million plant (owned by Weissheimer Maltz Fabrik), a $80 million Europort grain terminal (backed by Royal Bank of Canada and European Bank for Reconstruction and Development) and Gaspol's $40 million liquid petroleum terminal, said Ryszard Zdeb, general director of Baltic Malt.
During the next two months, the Port Authority will launch a tender for a $400-$800 million container terminal, he says. Privatization of state-owned Rafineria Gdanska, set to begin next month, also promises follow-on investment.
The city is also looking at development of hi-tech and industrial parks.
U.S.-based electronics firm Eaton Controls, which inherited a small electronic switch facility in a buyout of Dutch-based IKU, officially opened its new production plant earlier this month, just west of the airport Port Lotniczy Gdansk-Trojmiasto. Dutch software producer Olicom, which bought out U.S.-based CrossCom, is scheduled to move into a new site by year's end.
