Gorzow looks to greater Berlin for prosperity
Gorzow Wielkopolski, the capital of the Lubuskie province, is one of Poland's more remote regional centers. Lying on the German border some 450 kilometers from Warsaw, it has only one direct train from the capital a day, which takes eight hours to arrive.
Despite being located in the country's more affluent western region, Gorzow's relative remoteness from Warsaw was the main reason behind its regional economic slump a decade ago.
Jobless figures in Gorzow are currently at 12.5%, below the national average of 13.6%. But throughout the province, unemployment runs as high as 18.4%, second only to that of northern Poland's Warminsko-Mazurkie region.
Perched above the river Warta, Gorzow was historically a German city called Landsberg. When Poland's borders were redrawn in 1945, the city took on a new identity and ended up a mere 40 kilometers from the German border and only 120 kilometers from Berlin.
Before settling on Gorzow Wielkopolski, communist authorities were initially going to rename Landsberg Kobyla Gora, said Irena Kuncewicz, director of the promotion department at Gorzow city hall.
Between 1945 and 1989, Gorzow's links with Germany were effectively severed. After Poland switched to a market economy, the region worried that Germany would try to reclaim its former territory failed to make economic capital of its geographical proximity to a wealthy neighbor. When the borders opened, the city remained an economic deadweight, unlike the nearby Wielkopolska region east of Lubuskie, which capitalized on its location between Germany and Warsaw. But these days, Gorzow authorities are looking to Germany to kick start the city's moribund economy. "Investment in Gorzow has been weak," said Janusz Szrejter, vice president of the Gorzow-based Z. Marciniak construction company. So weak, in fact, that economic stagnation forced Marciniak to move most of its business to Warsaw in 1993, Szrejter said.
But as Poland's economic cooperation with Germany increased in recent years, prosperity slowly trickled down to Gorzow. In 1999, the government set up the Lubuskie province and despite the area's lack of large urban centers two cities were chosen as the province's capitals: Gorzow Wielkopolski and Zielona Gora. Both have populations of about 120,000. Gorzow is the center for regional government while the local Parliament is in Zielona Gora. Gorzow authorities are now planning to scrap the "Wielkopolski" suffix from the city's name, Kuncewicz said.
The Lubuskie province is predominantly agricultural with some mid-sized industries in the larger cities. These include the Gorzow-based chemical company Stilon, now owned by France's Rhone-Poulenc, a Swedish-owned paper plant in Kostrzyn, and some industries in the Zielona Gora area in the southern part of the province.
But an increasing part of Lubuskie's economy has been through trade with Germany. Volkswagen has set up a wire-harness factory in Gorzow. Several service developments catering to German customers have also been established. So far much of the new cross-border cooperation has been limited to Germans shopping for bargains or visiting ancestral land. Norway's hotel chain, Qubus, has taken advantage of these by opening its first two hotels in Zielona Gora and Gorzow.
Andrzej Korski, the vice mayor of Gorzow, sees this as the start of a much-needed return to prosperity. "We are a city that has close ties with Germany," he said. German business is going to dominate Gorzow and it's up to Gorzow to benefit from it, Korski said, adding that the city still has to shake its fear of German dominance.
He said Gorzow needs to invest in transport and accommodation, as well as teach its youngsters German. He added that German visitors will flock to visit Gorzow once the city is able to provide good food, "hotels with clean toilets" and entertainment. Later, when Poland joins the European Union (EU), Germans could even live in Gorzow and commute to work in Berlin, he said. The city's priority is to upgrade its transport links and entertainment facilities, Korski said.
Currently, Gorzow is investing in a road bypass a project co-financed by the EU. This month the city completed the eastern section of the bypass, and in 2001 will start building 12 kilometers of the western section at a cost of o56 million, he said. The project is planned for completion in 2006. "Currently transportation is the most important plan," Korski said.
The city will also invest zl. 47 million ($10 million) to build a swimming pool and leisure and bowling project in a park in central Gorzow, he said. This public investment is being fueled by EU aid for infrastructure projects as well as foreign investment from companies like Volkswagen. In addition, Marciniak is returning to the city from Warsaw to work on local construction projects. "We're back," Szrejter said. The company recently won a contract to build the park's swimming pool and plans to earn as much as 30% of next year's turnover from Gorzow projects.
Industrial/Warehousing
Industrial and warehousing projects in the area are being built mostly along the border. Local logistical companies Pekeas Multispedytor and Hartwig have built their warehouses near the border town of Slubice, 40 kilometers from Gorzow, Szrejter said. Croatian food company Podravka built a manufacturing unit in Kostrzyn, also on the border. Gorzow proper is also seeing some fresh investment, mostly in the industrial zone east of the city center where companies such as Rhone-Poulenc and a local gas-fired heating plant are located.
And Volkswagen, which already has a 8,000 square-meter factory, is also thinking of expanding production and building another three centers in the area, Szrejter said.
Local authorities are hoping to attract more industrial and logistical investment to the northeastern part of the city, where the bankrupt tractor-part company Ursus is located, Korski said. Because of Ursus' facilities, the area has all the essential infrastructure to attract industrial investors, he said.
Office
Office space is in great demand in Gorzow. Currently the total supply of modern office stock is 6,000 square meters, which can be found in just two buildings. One of those is the Siodemka building, a 1,000 square-meter development in the city center built by a local developer. At zl. 60 per square meter a month, the building is already 50% rented by banks and insurance and leasing companies.
But more office projects are being built in the center. BN, a Polish developer based in Zielona Gora, is building a 9,000 square-meter office and retail project called Park 111. The project will have one floor of office space for sale at zl. 3,000 per square meter, BN said.
Retail
Park 111 will also have three levels of retail space for zl. 4,500-zl. 8,000 a square meter per month. The project is planned for completion by 2003 and will be one of the first retail facilities downtown. Retail activity outside the center has brought total modern retail space in Gorzow to 14,540 square meters, including the 7,000 square-meter Hit hypermarket, according to city hall figures.
In addition, 36,800 square meters of retail space are under construction. The new space includes France's Castorama hardware store, which will have 10,000 square meters, and a Panorama shopping mall built by a local developer in a residential suburb, Korski said.
He said that despite the new wave of retail developments, Gorzow is far from being overbuilt. U.K.-based Tesco has already acquired 22,000 square meters of land and France's Auchan is negotiating a site acquisition.
The city can also absorb more retail developments as a potential catch-all for retail projects not only in Gorzow, but also for German customers who come to Poland to bargain shop, Korski said. He said most German shoppers only visit smaller towns on the border but will be happy to drive 40 kilometers if Gorzow, the nearest big city, can offer high-quality retail space.
The city, which owns more than 500 hectares of land in various places in Gorzow, is also negotiating with multiplex cinema developers for a possible project, he said.
Residential
Gorzow's residential construction sector is increasing rapidly. Last year 672 apartments were built in Gorzow, which translates into more than 53 flats per 10,000 residents. The figure is almost as high as in Warsaw, which last year saw 54 new flats built per 10,000 residents, according to state statistics.
But since the supply of residential building is large fueled by about seven local developers operating in Gorzow a question mark still looms.
"Today there is no demand," Szrejter said. Consequently, many apartments are vacant several months after completion.
Low demand is also putting pressure on prices and new apartments in Gorzow are selling for zl. 1,600 per square meter, Szrejter said.
But developers continue to build new blocks. Presbud is constructing a small building containing 11 apartments on ulica Walczaka in central Gorzow. The building is planned for completion in February 2001 and eight apartments have been already sold at zl. 1,850 per square meter, the developer said. Marciniak also plans to enter the residential market in Gorzow with its own development. The company acquired 2.5 hectares of land in the city, where it wants to build as many as 100 apartments on small multi-family plots, Szrejter said. Marciniak intends to construct high-quality buildings and market them as such, with prices as high as zl. 2,500 per square meter, Szrejter said.
