Plac Teatralny to rise again
At an estimated cost of $50 million, Bouygues has signed on with the city to recreate from scratch a commercial version of the pre-war City Hall, partially destroyed during World War II and leveled by the communist authorities in the 1950s.
Bouygues will be joined in the project by Citibank Polska, which has decided to buy half the space in the complex.
The project, which will comprise over 20,000 square meters of usable space, is located on ul. Senatorska, across from the main entrance to the Grand Theater.
While some developers have talked about the potential of this location for development - one of the most attractive areas of pre-war Warsaw - those who have tried to develop projects here have often run into obstacles from city officials and from the conservators office.
The Bouygues' project itself took several years to get this far. The tender, first announced in 1991, had to be called off when Bouygues pointed out to officials that not all the land belonged to the city. City officials then worked on the legal status of the project.
"When they first tried to offer the land for tender, nothing was clear," said Jean-Yves Ebel, project manager for Bouygues. "But when they came back after two years of work, everything was prepared. It took time, but it was very professional."
After a second failed tender attempt in the fall of 1994 - none of the bidders was able to obtain permission from the Interior Ministry to take part - the city offered the land for a third time. Only two firms were left - Bouygues and German AGIB. The latter was unable to produce bank guarantees, making Bouygues the winner by default.
Despite the fact the city has accepted Bouygues' proposal, there is still a sense that something could go wrong. Before signing the final land usufruct, or long-term lease contract - it's only been initialed at this stage - Bouygues will have to see what still lies under the ground at Plac Teatralny. When the building was demolished in the 1950s, no records were left as to what remained of the old city hall.
"We don't know what we will find there," Ebel said. "I think if we find a nice basement still intact, Citibank would be very pleased." Provided all goes well, Bouygues will break ground in October, and the complex could be completed as early as May 1997.
Despite caution by some, there is a sense that the city is working to see the project move forward without further delay.
"I have every faith that this will work because the city wants to see it done, the developer wants to see it done, and we need the space," said Citibank's managing director Alan Hirst, adding that the bank is pleased to be involved in the project.
"What our premises people like the most about the project is what it will do for the city," Hirst said. "It's just a really nice project."
While Citibank will buy half the project - Bouygues will act as a general contractor for them - it is only planning to use about 5,000 square meters of the space. The rest will be offered for lease, probably by Healey & Baker, which advised Citibank on the purchase.
Citibank is not the first foreign banking subsidiary which has opted to build its own headquarters rather than pay the hefty rents being asked at projects planned or currently under construction. MBO, the development arm of ING Group, signed in April a contract with the city's development arm Holding Wars to build ING Bank's headquarters at Plac Trzech Krzyzy - also following significant delays. Creditanstalt is also rumored to be looking around to purchase a project.
And it looks as if the list of banks interested in having their own premises won't end there. Ebel said they are currently negotiating with several banks for purchase of the second building in the Plac Teatralny project. In any case, he said the project would be 100% equity financed.
"For the rest of the space we will either find an end-user to finance it, or a foreign investor," Ebel said. "But the way the market is now, I think we will find an end-user."
He added: "It could be that Plac Teatralny becomes a Plac Bankowy - but a real one this time."
Bouygues will be joined in the project by Citibank Polska, which has decided to buy half the space in the complex.
The project, which will comprise over 20,000 square meters of usable space, is located on ul. Senatorska, across from the main entrance to the Grand Theater.
While some developers have talked about the potential of this location for development - one of the most attractive areas of pre-war Warsaw - those who have tried to develop projects here have often run into obstacles from city officials and from the conservators office.
The Bouygues' project itself took several years to get this far. The tender, first announced in 1991, had to be called off when Bouygues pointed out to officials that not all the land belonged to the city. City officials then worked on the legal status of the project.
"When they first tried to offer the land for tender, nothing was clear," said Jean-Yves Ebel, project manager for Bouygues. "But when they came back after two years of work, everything was prepared. It took time, but it was very professional."
After a second failed tender attempt in the fall of 1994 - none of the bidders was able to obtain permission from the Interior Ministry to take part - the city offered the land for a third time. Only two firms were left - Bouygues and German AGIB. The latter was unable to produce bank guarantees, making Bouygues the winner by default.
Despite the fact the city has accepted Bouygues' proposal, there is still a sense that something could go wrong. Before signing the final land usufruct, or long-term lease contract - it's only been initialed at this stage - Bouygues will have to see what still lies under the ground at Plac Teatralny. When the building was demolished in the 1950s, no records were left as to what remained of the old city hall.
"We don't know what we will find there," Ebel said. "I think if we find a nice basement still intact, Citibank would be very pleased." Provided all goes well, Bouygues will break ground in October, and the complex could be completed as early as May 1997.
Despite caution by some, there is a sense that the city is working to see the project move forward without further delay.
"I have every faith that this will work because the city wants to see it done, the developer wants to see it done, and we need the space," said Citibank's managing director Alan Hirst, adding that the bank is pleased to be involved in the project.
"What our premises people like the most about the project is what it will do for the city," Hirst said. "It's just a really nice project."
While Citibank will buy half the project - Bouygues will act as a general contractor for them - it is only planning to use about 5,000 square meters of the space. The rest will be offered for lease, probably by Healey & Baker, which advised Citibank on the purchase.
Citibank is not the first foreign banking subsidiary which has opted to build its own headquarters rather than pay the hefty rents being asked at projects planned or currently under construction. MBO, the development arm of ING Group, signed in April a contract with the city's development arm Holding Wars to build ING Bank's headquarters at Plac Trzech Krzyzy - also following significant delays. Creditanstalt is also rumored to be looking around to purchase a project.
And it looks as if the list of banks interested in having their own premises won't end there. Ebel said they are currently negotiating with several banks for purchase of the second building in the Plac Teatralny project. In any case, he said the project would be 100% equity financed.
"For the rest of the space we will either find an end-user to finance it, or a foreign investor," Ebel said. "But the way the market is now, I think we will find an end-user."
He added: "It could be that Plac Teatralny becomes a Plac Bankowy - but a real one this time."
