Wojciech Kozak:

The current system is absolutely unacceptable and one of the most complicated in the world, with 11 gminas, seven districts, powiat, etc. A draft bill to streamline Warsaw's complicated administration system, passed by Parliament last month, stands to bring much-needed order to the capital. Until now, the city has been divided into a dozen boroughs (gminas) and districts (dzielnicas) that have made Warsaw one of the most bureaucratic capitals in Europe, according to the city's new mayor, Wojciech Kozak. Under the new system, Warsaw will consist of one borough headed by Kozak, a simplification that real estate professionals say should have a positive impact on the property market and prospects for infrastructure development. But a major obstacle to transforming Warsaw into a modern European capital remains - money. Kozak, who was deputy mayor responsible for Warsaw's investment policy, talked to the WBJ's Anna Staniszewska about the city, its financial challenges and long-term plans. The following is a translated and edited version of their conversation. Q: The past couple of years have seen substantial development activity in Warsaw. Has it changed for the better? A: Yes. Although I do understand that some buildings were not built in accordance with regulations, in terms of approved architecture and location, but don't ask me which ones. Still, compared to pre-1990 Warsaw, the city of 2002 has changed for the better. Q: People say there's no order to the way Warsaw is being planned. What do you think about this? A: I disagree. But I would say that spatial planning needs more order. That's why city authorities have undertaken the initiative, when I was a deputy mayor, to arrange public space in Warsaw. Some of the binding agreements have already been accepted and are being implemented. Others are being discussed, but there's still a lot to be done about a master plan for the city. Q: What are your spatial-planning goals for Warsaw? A: Our policy consists of several documents aimed at simplifying the structure of decision-making. The first is (to simplify) the binding regulations on Warsaw's master plan, since spatial planning in Warsaw has been very difficult due to (the city's) complicated administrative system, the only such system in Poland. District plans and local studies have to be consistent with the city's master plans. It's quite a mish-mash right now. We accepted the master plan for Warsaw and the binding agreements in July 2001 and I think this is one of my greatest achievements as deputy mayor of the city. The project divides the city into functional zones: central, residential and service, service, technical and production, and green areas. It is also the first time that zoning is connected with the height of buildings, with a description of how tall a building can be in a particular area. Infrastructure systems, such as roads, and green areas are all clearly and transparently planned and can be used by districts when doing their planning. This document is consistent with Gmina Centrum's plan and has provided the basis for another study that we're working on, which is the binding regulations for the Śródmieście district. The plan will go through public discussion. In an additional document, there are binding regulations for the development of Warsaw's core - plac Defilad - and precise numbers for the heights allowed along the city's main roads, such as ulica Marszałkowska and Aleje Jerozolimskie. That figure is 30 meters; Bulwar Kolisty, (the area surrounding the Palace of Culture and Science) 65 meters; and from ulica Emilii Plater it's 120 meters. This plan is key to the city's development. Q: What about infrastructure? It's hard to invest in an area if the infrastructure is bad. A: True. Warsaw has been suffering a lot over the past couple of years due to underfinancing and lack of investment. But infrastructure is one of our priorities - in particular tram and underground transportation. Q: How much money do you have in the budget for infrastructure? A: zł. 270 million ($68.85 million), out of which zł. 110 million ($26.8 million) comes from the state treasury and zł. 160 million ($39.02 million) from the city budget. The key to the subway plan is to get cofinancing from the state. Every year we apply for more funds but with little result. If the state treasury doesn't cut funding for Warsaw infrastructure, the zł. 270 million should be enough to continue drilling to the Dworzec Gdański subway station, which should be ready in 2003. That year we will need zł. 300 million ($73.2 million) to get the station ready by October. Then in 2004, we'll need zł. 250 million ($60.97 million) to finish the plac Wilsona station. These plans also envision the construction of a second subway line, connecting Bemowo with Praga and Gocław. Both the completion of the first line and the construction of the second will cost zł. 8.5 billion ($2.07 billion). Q: How will you finance it? A: Based on a public and private partnership, working with large contractors. I think the entire investment could be ready by 2010-2011. Q: What is Warsaw's biggest problem? A: The roads, of course. Warsaw is in great need of a bypass. Warsaw also needs immediate repair on road surfaces. But again, there's no money. Most of the road repair will have to wait until next year. Q: What's your perception of the property market? Has it slowed down? A: Stagnation is everywhere, but there are a couple of projects that are in the final stages of preparation. There is a lot of interest in Warsaw. Q: What is your opinion about investments involving historical buildings? For instance, the demolition of a historical mansion at the intersection of ulica Mokotowska and plac Zbawiciela, which is slated to become a modern office building. A: Historical buildings should be protected, that's for sure. The city and conservator should do everything to keep them in good shape. There is not much left from our pre-war architecture so it's necessary to restore what we have where possible. It's obvious that in the case of the plac Zbawiciela mansion, there has been some violation of law. The key to restoring the character of the city is to reconstruct the Saski Palace and the Bruhl Palace. Unfortunately, there is a challenge here, because I wouldn't want these projects to be commercial but what's needed is a big public investor, like a Polish bank, which is not easy to find given the economy. Such an investment means a lot of money. Q: What do you think about the developments around plac Teatralny? A: I don't share the negative opinion about the Jabłonowski Palace. It suits the surrounding architecture. The same will apply to developments by Opera Holding and Hines when they're completed. As to the broadly discussed Metropolitan project, it's good that Warsaw will have a building designed by such a well-known architect - Lord Foster. This project has been redesigned a couple of times; one can argue that it's too massive, but all in all it will have a positive impact on the Warsaw property scene. Q: Housing is yet another problem for city authorities. A: Talking about housing brings us back to infrastructure and how it influences the residential market. In the early 1990s, the Kabaty district was an empty field. Today it's one of the most densely developed housing districts. All because of the subway line. The same will happen when construction of the second line starts - Bemowo will start to flourish. One of the outstanding examples of the residential boom is Białołźka. Despite not having very good transportation to the city center, the local authorities were able to provide investors with proper infrastructure. All we need are bold solutions. Q: So you don't believe Praga to be the ‘El Dorado' of commercial property developers? A: No. For the time being I don't see Praga as the ‘second city.' However, the existing projects (Centrum Milenium and Centrum Wileńska) are evidence that developers haven't withdrawn and believe in taking risks and that it isn't that bad. Nevertheless, Port Praski is the key to commercial development on this side of the Wisła river. The urban development plans are ready and are just waiting for an investor. Q: What about the deal between power and telecom conglomerate Elektrim and Pol-Mot Holding? Has it been finalized? A: From what I know, the transaction between Elektrim and Pol-Mot Holding didn't work out so the land still has to be developed. But there is another interesting site on the east bank of Wisła. The second strategic investment for Praga has to do with the Russian Market and the surrounding area, of course with regard to greenery restrictions. It's a perfect place for a retail and office complex as well as for a 21st-century sports and recreational center. But before an investor comes, the land in question must have a clear ownership structure. It's still owned by the state treasury. There is still a long way to go before development of this part of Warsaw can happen. Q: Warsaw's administration system is about to be changed. What kind of system do you favor? A: It's very simple - one gmina. The current system is absolutely unacceptable and one of the most complicated in the world, with 11 gminas, 7 districts, powiats, etc. The city employes a great number of unnecessary civil servants; nobody knows what institution is responsible for what. I don't see why Warsaw can't have the same administrative system as any big city in Poland. Subjects connected with Warsaw residents are solved on the district level, whereas city issues are dealt with in the gmina. That's what I'm betting on. Q: Shopping centers are mushrooming. Is the purchasing power of Varsovians enough to support all of them? A: Despite all the talk about how bad the economy is, it's enough to go to Galeria Mokotów on a Friday evening and the picture is clear. Varsovians are getting wealthier and the competition is healthy. Q: What impact on the city will the Złote Tarasy project have and the redevelopment of the Warszawa Centralna railway station? A: In the early stage, this part of Warsaw may suffer from some traffic congestion, but overall this is a very important project and it's definitely worth developing. As for Warszawa Centralna railway station, I think it should be demolished and a new one built as soon as possible. It can no longer be a calling card for Warsaw. Maybe in the 1970s it was an attractive building, but Warsaw deserves a more European train station. Q: What will Warsaw look like in 10 years? A: I hope that we will have plac Defilad developed and the Łazienkowska freeway covered and developed. Maybe the city will also have one or more (new) bridges. Warsaw will have a national stadium for Legia and a second subway line. I also hope that the historical palaces that I mentioned before will be reconstructed. We definitely won't escape from more office space. It's inevitable. Personally, I wish there were more hotel developments in Warsaw, however not luxurious ones, but two and three stars. That's what's needed.