Berlin stokes foreign investor land rush

Berlin is a roomy place, but private investors from Britain and the United States have come to see the German capital as fertile ground for a cheap property deal. Ben Knight finds out how much of the city is left for Exberliner magazine.

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Tarhilo Sarrazin does not need any help making himself unpopular in Berlin. The city-state's former finance minister caused a media stink last month by calling Berliners un-intellectual and lazy, and blaming the city’s history of government subsidisation on a collectively careless mentality. But perhaps his entertainingly bigoted remarks are not his worst disservice to Berlin. His time in power was characterised by a zeal for balancing the city’s books, and in pursuit of this he left few sources of revenue unexplored.

Selling land as public policy

For Sarrazin, the city’s real estate was an obvious asset to exploit, and plenty of Berlin politicians noticed his reckless policy. Klaus-Dieter Gröhler, local councillor for Charlottenburg and Wilmersdorf, says, “Berlin should not just market plots of land to stop gaps in the budget. That is not sustainable.” Ephraim Gothe, councillor for town development in Mitte, agrees, “Sarrazin usually forced through unconditional sales.” This policy left the city with little control over its own development.

Councillors for individual districts like Gröhler and Gothe are not idealists who champion the freedom of public property. They just found themselves protecting their district interests against Sarrazin’s finance department, eager to sell off land for any supermarket chain that will have it. “I don’t have anything against privatising land in principle, but the state should keep back some of the money – maybe 20 or 25 percent – to buy other land that it might need,” says Gröhler.

But Sarrazin is of course no longer in office, and Gröhler is still cautious about his successor, Ulrich Nussbaum. “He hasn’t been in office long enough; we’ll just have to wait and see,” he says.

The Marx Engels Forum

That Sarrazin’s influence has finally ended can be seen in the case of the Marx-Engels-Forum, the open park to the west of the TV Tower, where a bronze Karl Marx sits with Friedrich Engels at his shoulder, amid reliefs depicting happy life in socialist society. The small park was opened in the mid-eighties, and the ruling party of communist East Germany, the SED, was closely involved in its design. Earlier this year, it was reported that the city wanted to sell this prime piece of central Berlin. According to the papers, Sarrazin thought the sale of the park would be “particularly lucrative” for the city. Like the Palast der Republik, the famous building on the other side of the river that once housed the East German parliament, the Marx-Engels-Forum is emotionally associated with Berlin’s East German past, and like the Palast (whose demolition was completed earlier this year), it appeared doomed.

But the plan to sell the property has now officially been abandoned, for different reasons. Regula Lüscher, construction director of the city Department for Urban Development, maintains that the change of plans was the result of a change of course that marked her appointment. Lüscher decided not to execute plans of her predecessor, the publicly decorated Hans Stimmann, Berlin’s construction director from 1991-1996 and 1999–2006, who is infamous for the Prussian style he imposed on the city (and the Alexa shopping centre!). Stimmann wanted to build a small medieval village on the site, also with a free space - a kind of re-creation of the historical birth of the city of Berlin, which was founded in the area. “I’ve nothing against re-designing it, but I don’t think it’s a good idea to reconstruct medieval structures there. The area will be re-designed from 2012 onwards, but it will remain an open space for the public,” Lüscher says.

Straightforward as this sounds, financial drawbacks probably also played a part in the decision not to develop the Marx-Engels-Forum. It turned out that the land, which was an inner city residential quarter before the war, originally belonged to more than 50 other parties, including Jewish families whose property was confiscated by the Nazi regime. If the land had been sold and turned into a building site, those parties would have had compensation rights, and the project would have cost more than the city could make from it. “This probably had something to do with the fact that the city decided not to sell,” confirmed a spokeswoman for the Liegenschaftsfonds Berlin, the private marketing agency that the city uses to sell its property.

A historical template

But although Berlin has lost its chance to have a fake medieval village, Lüscher does intend to re-develop the entire city centre according to a historical template. The tip of this archaeological iceberg will be the Stadtschloss, a reconstruction of Berlin’s central imperial castle, the residence of Prussian kings and German kaisers, on the site of the Palast der Republik. The guiding principle of Lüscher’s vision for the historical city centre, stretching out south and east from the Stadtschloss to the river, is the idea that history should not be reconstructed, but ‘uncovered’. Archaeological remains are to be dug up and displayed in between modern apartment blocks. “It is meant to be the renaissance of the city centre. It is meant to bring the population of Berlin back into the centre ... And at the same time we want to remind people that this was the birthplace of the city.”

All this means extensive privatisation, of course, as well as infrastructural re-development – widening or narrowing roads, and extending public transport services (a tram line is even intended for the area). The Urban Development department organises architect competitions to see what form the development will take. One recently concluded competition is the Luisenblock Ost, where a new office block is being planned near Friedrichstraße.

Berlin’s fiscal constraints mean that the project must be ‘cost-neutral’ – in other words, the state parliament has ordered that the sale of properties in the area has to fund the infrastructural upgrades.

Privatisation of the Spree bank

Extensive privatisation by way of large-scale projects has drawn passionate opposition from the population. The most high-profile of these schemes is the Mediaspree investment project, the colonisation of nearly four kilometres on both sides of the Spree in the east of the city by a horde of media corporations.

Part of the plan has already been realised with the O2-World Arena, which at the moment is still standing in the middle of sprawling wasteland, but will be nestled in a forest of new buildings within the next five years. Two 200-plus-room hotels will be built in the area to host the extra visitors that the immense venues will bring. One, the seven-floor Hotel Spreeport, will take up the area now occupied by the Maria am Ostbahnhof nightclub. The fashion centre Labels II Berlin is a collection of fashion showrooms about to open between the offices of Universal and MTV. Puma, Camel Lifestyle und s.Oliver are among the labels that have rented space in the centre. Despite the global financial crisis, space has also been rented in many of the unfinished office buildings. The entire project is meant to create 30,000 jobs, at least according to urban development minister Ingeborg Junge-Reyer, and as much as €3 billion are being invested. The parts of Mediaspree that have already been built - the offices of Universal, MTV, the Verdi trade union and the O2-World - are estimated to have already created some 15,000 jobs.

Citizens against corporations

A movement calling itself Mediaspree Versenken (‘Sink the Mediaspree’) succeeded in forcing a district referendum last year, the results of which showed that locals were against the plans. But the city, represented by Junge-Reyer, did its best to ignore these results, and went ahead with guaranteeing investors planning permission. The authorities claimed that to sink the project would cost the city €165 million in damages, a figure disputed by Mediaspree Versenken. The referendum only managed to force some alterations to the plans, mainly in order to create public access to the river and adequate open space, which has now been ensured. One building at the Elsen Bridge is still in debate, as is the height and density of certain projected buildings at the Schilling Bridge, but the rest is now apparently beyond revision. Manfred Kühne, project manager at the Department for Urban Development, gave the Tagesspiegel a telling quote earlier this year: “The discussion around the citizens’ initiative has awoken the false impression that projects could be endangered.”

For Mediaspree Versenken, the construction of a row of media buildings along the river would waste the chance to create a social and recreational area, and would be another nail in the coffin of the improvisational element of Berlin culture - represented by Bar 25, the bar, nightclub and performance venue that grew out of a makeshift beach bar on the river bank. Despite its commercial success, Bar 25 has been forced to close to make way for new plans: Berlin’s waste disposal service BSR owns the and would like to sell it for around €31 million. So far, no buyer has been found. For Lüscher, establishments like Bar 25 should be recognised as only a transitory stage in the capital investment of an area.

“These temporary utilisations of space are of course wonderful, but they are also a kind of privatisation. One should be aware of that. I think it’s great that you have these beach bars, and they do enliven the area. They are pioneers of space, if you like – they find spaces in the city and use them - and that is a very important stage in the development of the city, but I think that in the future authorities should take more care to manage these temporary utilisations.” In other words, improvised businesses like Bar 25 should in the future be regulated by a state-appointed land management company, which draws up contracts that say how long a bar or a nightclub will be allowed to last.

These ‘temporary utilisations’ have been the flashpoints of the struggle between the privatisation of Berlin’s real estate and the free, improvisational culture that many believe attracts people to Berlin. For Lüscher, who does not recognise any fundamental difference between these two forms of privatisation, but does accept the importance of encouraging independent businesses to get a chance to develop an area, the best compromise would be the implementation of a system to manage plots of public land after they are sold. The new land management system would take care of drawing up temporary contracts with the businesses of a designed area. This, apparently, is the plan for Berlin’s next great private development project -the Tempelhof airfield.