City in Focus: Gdansk
Gdansk has a long and extraordinary history as the cosmopolitan crossroads of Central Europe. It's also the city that was instrumental in breaking down the brittle walls of communism in Poland.
Gdansk was founded in 997 and as a leading Baltic port was host to ships from as far away as Byzantium and England. With this rich trading tradition, it was also a member of the Hanseatic League, a 14th century mutual confederation of towns and communes based on sea trade.
Today Gdansk is the capital of the Pomorskie province (Wojewodztwo Pomorskie) and along with Gdynia and Sopot, is part of the larger Tri-City administrative bloc. Gdynia is the business district, Sopot is renowned for its leisure and entertainment, while Gdansk is famous for its tourist attractions and past economic muscle. But despite separate historical identities, the Tri-City area is a model of metropolitan cooperation. "It is one body with three faces," said Roman Sebastyanski, marketing director of Synergia 99, a subsidiary of Gdynia Shipyard that is developing the site of the former Gdansk Shipyard.
That shipyard used to provide 40% of domestic ship production. By 1998, the yard had gone bankrupt and a consortium consisting of Gdynia Shipyard and Evip bought it for zl. 115 million ($28 million). Along with the old shipyard, where Solidarity was born in 1980, is Gdanska Stocznia Remontowa, a yard for building and repairing vessels.
Also in the Tri-City area are the Naval Shipyard Gdynia and the Northern Shipyard company.
Port of entry: Sea transportation has always played an important part in the life of the area.
The Gdansk and Gdynia ports handle large volumes of coal, ore, grains, timber and liquid fuels. "It (transportation) will always play a key role in the region," said Jerzy Gwizdala, vice president of Gdansk City Hall.
Likewise, the fuel and power industries also play a central role in the province. Gdansk is headquarters to the second-largest Polish oil refinery Rafineria Gdansk. And Energa (Gdanska Kompania Energetyczna) is the leading electricity supplier in the region.
Surprisingly for an industrial port city, tourism also plays a part in the fortunes of Gdansk. The city has a wealth of historic Gothic and Renaissance buildings. It was also here in the port of Westerplatte that World War II erupted. Since the early 1980s, Gdansk has been associated with Lech Walesa's toppling of the communist regime. The Pomorskie province is also a base for coastal tours to resort areas such as Ustka, Leba and Krynica Morska.
Preserving the past: An old-style market thrives downtown.
But unlike with tourism, Gdansk is not finding it as easy to attract foreign and local investment. "It's a difficult city for investments," Gwizdala said, referring to an outdated bureaucracy that suffocates the city and ongoing ownership disputes. Also, the city's infrastructure has suffered due to a lack of outside capital. However, between 1998 and 1999, Gdansk attracted about zl. 730 million ($178 million) in investment mainly for supermarkets, gas stations and the food-processing industry.
Despite a lack of investment, the 6% jobless figure in the city is far lower than the national average of about 13% although unemployment for the province is 11%. Within its borders are two special economic zones near Tczew and Slupsk. These have yet to attract any substantial investment. "We expected a better interest in the zones," Gwizdala said.
The most important investment in Gdansk is Synergia 99's redevelopment plan for the former Gdansk Shipyard area. This massive project promises to breathe life into 73 hectares once belonging to the yard.
Hot topic: Synergia 99 has a 10-year plan to revitalize the Gdansk Shipyard.
Synergia 99 is drawing up plans to create a New Town as well as multi-use projects near the railway station, the Motlawa river and the Old Town. These will include municipal departments, public utility buildings, office developments, hotels, retail and entertainment centers as well as residential property. Sebastyanski said that the entire project will take 10 years to complete once the building permit is obtained, expected by the end of this year.
Lasting presence: St. Mary's is the oldest and largest brick church in Poland.
Above all, Synergia 99 hopes to retain the location's historic atmosphere. "We want to preserve the climate of the place," Sebastyanski said. The development will cost about zl. 7 billion-zl. 9 billion ($1.7 billion-$2.2 billion). He said negotiations with several developers are underway.
Retail
With 458,000 people living in Gdansk and more than 2 million within the province's borders, several foreign residential real estate firms have set up during the past few years. "We experienced a retail boom two to three years ago," Gwizdala said.
So far, France's Auchan and Geant have both opened in the area. Geant has established the King's Cross shopping center with retail chain developer Casino. Meanwhile, German retail operator Metro has set up a plant to manufacture audio-video equipment. Do-it-yourself OBI of Germany, office equipment supplier Office Depot and Swedish furniture retailer Ikea have all opened outlets. Together with Polish shopping centers such as Nomi, M3, Galeria Centrum and City Forum, total modern retail stock in Gdansk accounts for 157,308 square meters with another 93,000 square meters planned by Praktiker, Real and Carrefour. In existing developments, tenants pay zl. 40-zl. 80 per square meter, according to city hall figures.
The success of the small but strong merchant lobby is another reason for slow development in the city. "Some investments have been stopped by protests," Gwizdala said. He said these protests had pushed retail and office investments to the city's outskirts.
Also property developments are being tightly controlled as a means of preserving Gdansk's architecture. "Culturally, this should be our priority," Gwizdala said. But he admitted that it's difficult to persuade local people that new developments won't damage the city or its small businesses.
Residential
The Zielony Stok complex will add 165 more homes to the residential market.
The residential sector is booming in Gdansk. In 1999, 1,065 homes were built, and this year leading local developers such as T.I. Investing are slated to build 2,500 apartments. In addition, the city's south end is a hotbed of development. Poland's Polnord Dom, Gipsblok and K. Hovnanian all have developments in this part of the city. "This is where most residential settlements are being built," said Elzbieta Zurek, PR manager of Polnord Dom. Prices for homes under construction range from zl. 2,400-zl. 3,400 per square meter, much cheaper than in Warsaw, where prices run about zl. 4,000.
Office
The office market in Gdansk is far behind that of other cities. Most developers have set up in Gdynia, the Tri-City's business center. "It (Gdansk's office space market) is definitely underdeveloped," Zurek said. The only attractive office districts in the city are Allcon Dmowskiego Centrum and Allcon Slowackiego Centrum in the city's Wrzeszcz district. Centrum Biznesu on ulica Waly Piastowskie, which was built in 1971, covers about 10,000 square meters and charges zl. 38-zl. 72 per square meter.
The few developments under construction may not meet the demand, however. Local developer Vigo is building a 3,500 square-meter office block and Hossa, another Tri-City developer, is building Company House, a 4,000 square-meter office building, which it plans to sell for $490-$750 per square meter. Both investments are expected to be completed by 2002.
Two other projects underway include the development of the area around the Holiday Inn by Warsaw-based Vision Film Distribution. The plan involves building a conference, exhibition and office center. Also Gdansk authorities, in cooperation with the Netherlands' ING Real Estate, plan to develop a multi-use center near city hall on ulica Nowe Ogrody within two years.
Warehouse
Industrial and warehousing sites in Gdansk are mainly located near cargo terminals and have a high turnover of goods. City hall would not provide any figures for modern warehouse space available for rent in Gdansk.
