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Election Consequences
26 May 2015 – Expansión
The change of roles in City Councils of Madrid, Barcelona and Valencia have put prominent urban development projects under review. They could either be modified or not even given the green light at all. A fall in investment is not forecast for the sector.
The change of political parties in three of the major Spanish cities – Madrid, Barcelona and Valencia – will entail consequences in terms of one of the most important powers of local Councils: urban development. The more than likely appointment of Manuela Carmena, from Ahora Madrid; Ada Colau, from Barcelona’s Comú; and Joan Ribó, from Compromís in Valencia as heads of their respective councils will bring changes to urban planning policies of the cities, where there are numerous real estate projects of great importance underway.
In the case of Madrid, there are many projects in early stages yet to be approved by the new council. This is the case of District Castellana Norte development project (formerly Operation Chamartin). In the last plenary session, the City Council led by Ana Botella did not approve the “Partial Plan of Interior Refurbishing” affecting the area. The bill, introduced in January with the support of the City Council and the Community of Madrid, plans to invest 6 billion euros in the construction of 17,000 housing units, of which 10% are some type of subsidized social housing.
Back then, the local Executive branch in Madrid, owner of 5.3% of the land in Castellana Norte, pledged to carry out the construction of the “Nudo Norte” and “Nudo Fuencarral”, although the expenses incurred would be borne by Duch, a company owned by BBVA and San Jose. Professionals from the sector believe that “Castellana Norte Project” will succeed, as it situated in a “run-down area,” albeit not in initial phases. The same argument to retrieve a devalued area has been put forward concerning another major development project in Madrid: the “Operación Campamento”. On April 27 this year, the Ministry of Defense announced the start of the sale of 1.55 million square meters that used to house barracks for decades. The land ploss are a favorite location of the Chinese Dalian Wanda Group to promote large-scale development of housing and upmarket leisure area projects. The current urban planning, approved in May 2009, includes more than 530,000 square meters of subsidized housing.
This is not the only project of Dalian Wanda in the capital. Last year, the company of billionaire Wang Jianlin bought Edificio España, located in the heart of Madrid to open a hotel with luxury homes. The project will includes refurbishing the rear facade of the historic building and expanding the parking area about 10,000 square meters, in addition to hiding “underground” the traffic that currently passes in front of building’s door, situated on Plaza de España. It is yet to be annoucned who will bear the cost of the renovation on the Plaza.
Another major urban development project taking place in Madrid is known as Operation Calderon. It is awaiting authorization from the courts for the construction of several skyscrapers, something the High Court of Justice of Madrid opposes.
Barcelona
In Barcelona, there are also numerous real estate projects that have yet to receive a municipal green light. Some of them should have been approved months ago but public pressure against excessive growth of tourism delayed approval until after the elections. Now, these construction projects will depend on Ada Colau, who has made “putting the brake” on tourism projects part of her election platform.
This is the case of the Deutsche Bank Building, at the crossroad of Paseo de Gracia and Diagonal de Barcelona. It was acquired by investment group KKH for 90 million and awaiting for its demolition to be approved to build a larger hotel. Investors had spoken about a deal with the Four Seasons hotel chain.
The expansion of Zara on Paseo de Gracia has also been delayed. Inditex wanted to build its largest store in the world as a flagship for the brand. On the same avenue, a project to build an H&M mega-store is also pending.
The new port for luxury boats that the Port Authority of Barcelona wants to build has been approved, although the plan could be changed.
FC Barcelona wanted to expand its football stadium, Camp Nou, although it has yet to present the project and, hence, does not have a municipal building permit.
All projects that are related to attracting more tourists could also be affected by the election victory of Ada Colau, such as building new cruise terminals or expanding shopping malls, La Maquinista and Heron City.
Valencia
After 24 years as mayor of Valencia, Rita Barbera has not fulfilled her longstanding goal of joining the beaches and the city center with a large avenue, one of the flagship projects of her six legislatures, and also one of the most controversial ones.
The person who may succeed her as mayor, Joan Ribó, has been precisely one of the most fierce opponents of the plan. On the election night, he clearly stated his intention to terminate the planned schedule in the old fishing district of El Cabanyal.
The plan approved in 2001 was to demolish about 400 buildings in the historic district and make a public investment of at least 450 million euros. The private sector would later join in to finance the development and its facilities.
The outcry among local communities, ongoing legal proceedings, disputes with the Government of Zapatero and the crisis also brought to a halt another project that should have helped change the coastline of Valencia, one of the most dilapidated areas of the city.
Original story: Expansión
Translation: James Leahu