City Focus
By : Tomasz Stepien
Like many cities in western Poland, Zielona Gora was traditionally German but became part of Poland after the borders were redrawn in 1945. For decades, the city was a favorite with Warsaw's central authorities, which wanted a strong urban center close to the German border. This favoritism resulted in Zielona Gora being promoted to the status of regional capital. During the communist era, the city was awarded central government investment and the population shot up from the prewar figure of 25,000 to 119,000. As a cultural center, the city now boasts two universities as well as a theater, opera house and cinemas.
In 1999, when Poland redrafted its administration system and reduced the number of voivodships from 49 to 16, Zielona Gora remained a regional capital and today is the smallest provincial capital in Poland, sharing the Lubuskie voivodship with its local rival, Gorzow Wielkopolski.
Construction is underway to improve the city's infrastructure.
Zielona Gora has a reputation as a center for regional bureaucrats, and much of the city's economy is still based on state-owned companies a fact that has alienated much of the country's business community.
"Zielona Gora needs to wake up," said Steffen Okland, president of Qubus Hotel Management, a locally based Norwegian-owned company. Qubus, which built its first hotel in Zielona Gora and now has its head office there, is the only significant foreign investor in the city.
Noways Qubus is one of the few foreign investors that have set up in the city.
This lack of foreign investment is all the more surprising considering Zielona Gora's proximity to the German border.
In addition, the city still enjoys considerable financial support from the central government and has well-developed communications, with modern roads and bypasses.
The Lubuskie province is suffering from a declining industrial base, with many of the state owned companies on the verge of bankruptcy. Industries still considered successful are the state healthcare and educational institutes, which employ 25% of the workforce, while the local service industry employs 12.5%, according to the Central Statistical Office (GUS).
Industrial employers are the Zastal railway carriage manufacturer, Lumel, an equipment measuring company and the Polmos distillery all government owned. The other state companies, which include Polska Welna and Falubaz Textiles, a local wine maker and a brewery, are in sharp decline and on the verge of going under, according to Boguslaw Jedras, promotion manager for city hall. "Our problem is a lack of new industrial investments," he said.
In the race for local and foreign private investment, Zielona Gora is losing to Gorzow Wielkopolski. "Gorzow is more active on business," Okland said.
Gorzow is closer to the German border and has managed to attract investors like Volkswagen. "Gorzow has taken the bait," Okland said. "Zielona Gora wasn't able to follow up." He said the city has suffered from inadequate self-promotion. "Nobody said, 'let's go out and sell it, let's create jobs,' " he said. "I have the impression that Zielona Gora is not very open to foreign investors."
All recent business investments in Zielona Gora are local. Poland's construction materials producer, ZPR Kaczmarek, is planning to open a manufacturing plant employing up to 150 workers. Kaczmarek already has a factory in Rawicz and hopes to boost sales in Western Poland and Germany, said Zenon Bambrowicz, Zielona Gora's vice mayor.
Another venture is Novita, a carpeting manufacturer listed on the Warsaw Stock Exchange.
Sector that is developing in Zielona Gora is IT, mostly due to the skills of local technicians educated at the university. The biggest company in the sector is the local ADB, which produces and exports satellite decoders. ADB employs 150 workers, Jedras said.
Industrial
As state-owned industries slip further into decline and few foreign investors rush in to plug the gap, attracting industrial investment for the city is crucial. "We don't want retail investment, we're after industrial investment," Jedras said.
The city plans to establish an industrial zone in a northern area called Spalony Las, where the city owns 85 hectares of land, Bambrowicz said. He added that the city intends to invest in infrastructure in the area and sell it to industrial investors.
Window manufacturer Welet plans to buy 20 hectares and set up a manufacturing plant in Spalony Las, creating 300 jobs, Bambrowicz said. Also, Western car parts suppliers said they're looking at setting up in the area, he added.
Available industrial property includes the former plant owned by local denim manufacturer Dallas. The company moved its factory from Zielona Gora to the Walbrzych special economic zone in southwestern Poland, Jedras said.
Office
Zielona Gora has a developed supply of office stock, most of which is government offices built before the 1970s. These properties are now being rented as commercial office space. Jedras said total office space in the city center runs more than 30,000 square meters. The Centrum Biznesu building on ulica Westerplatte, which used to be the Communist Party's local headquarters, is letting space for zl. 55 per square meter a month, Jedras said. He added that this rate was at the top of the scale since other old-style office buildings including the offices of a bankrupt meat factory in the Przylep district charge only about zl. 10 per square meter a month.
But while there's plenty of office space available in Zielona Gora, quality is not a given. "There are offices for rent, but not of a particularly good quality," Qubus' Okland said.
He said Qubus recently needed more space and rented 380 square meters in a small suburban building, where it is the only tenant. The company pays zl. 29 per square meter a month, but had to finance the fit out of the office. Okland said the supply of quality offices in Zielona Gora is low because there are no tenants looking to rent high-end space.
Okland said Qubus first chose Zielona Gora as an experiment. "It was a kind of opportunity to test the hotel market," he said, adding that the company would not be staying in the city for long. "We will stay here for two to three years," he said. The company will be moving to Warsaw, Krakow or Poznan in the future, Okland said.
With the lack of foreign office tenants, most demand is likely to come from local companies. Jedras said many of these have built their own offices in the suburbs of. Companies moving to offices in these areas include ADB and Streamsoft, a local IT company.
As demand for office space in the city is low and the supply of space in older buildings is high, no new buildings are planned for the time being, Bambrowicz said. He added that any new construction would likely be in the hotel sector; Polish investors are currently looking to build a 220-room upscale hotel on ulica Wroclawska.
Okland said, however, that plans to build the hotel on ulica Wroclawska have been on the drawing board for a while, with no indication that construction will happen anytime soon.
Retail
A new supermarket being built in Zielona Gora.
Zielona Gora, a center of administration for many years, has a developed downtown retail sector including restaurants, cafes and shops. In terms of retailing, the city is more developed than Gorzow Wielkopolski. "Guests like Zielona Gora more than Gorzow," Okland said.
He said the booming retail sector was a result of the years when the city was a communists favorite and was selected as the location for national events such as the Soviet Union Music Festival.
In terms of suburban retailing, large hypermarkets are only now starting to look at the area. At the moment, the city has only small supermarkets including Intermarche, operated by France's Les Mosquetaires retail group.
But the larger hypermarkets have already drawn up development plans. France's Auchan is building a 12,000 square-meter hypermarket and the U.K.-based Tesco is building a 12,000 square-meter shopping center. Both plan to open in early 2001. "This should saturate demand in the city and the surrounding area," said a source at city hall. In the future, the city hopes to attract more retail and entertainment developments to the center of Zielona Gora, Bambrowicz said.
The bankrupt Polska Welna textile factory is currently selling eight hectares of former industrial land in the city center, he said. The city hopes the developer will build mixed-use retail projects on the property, including bowling and multiplex cinemas, he said.
A new residential block of flats is a stark contrast to the old decaying apartment buildings.
Residential
The residential sector is developing faster than other sectors in Zielona Gora. Last year 641 new apartments 53 per 10,000 residents were built in the city, nearly the same as Warsaw's per capita figures.
The reason for the vibrant residential sector is the high number of Poles migrating to Zielona Gora. The city has two universities and attracts a lot of students, many of whom stay after graduation, Jedras said. As a result, Zielona Gora's population has been growing.
Bambrowicz estimates that as many as 15% of home buyers in Zielona Gora are students staying in the city after graduation. The number of new homes completed is also high because the city is financing new residential projects, Bambrowicz said. Last year about 300 apartments or 50% of all completions were developed by the city, he said.
Prices for new homes in Zielona Gora range from zl. 1,800 to zl. 2,200 per square meter, Bambrowicz said.
Qubus' Okland, who lives in Zielona Gora with his family, paid zl. 1,600 per square meter for a new 120 square-meter apartment.
