Cracow is the most-visited city in Poland. Once the seat of Polish kings and the capital city of Poland, today Cracow is the cultural heart of the whole country, especially famous for numerous historical works of art and its magnificent architecture.
Not surprisingly the city advertises itself as "Magical Cracow." However, despite the strong historical background, the city may also be defined as the place of business.
At the end of April, office spaces of approximately 6 million sqm were available in Poland, out of which almost 550 000 sqm are in Cracow. This indicates that the city is the biggest regional market in the country. What can the investors expect in Cracow?
Spatial development plans cover less than 42% in the capital of Malopolska province. Therefore, the majority of new investments must be established on the basis of planning consent, i.e. land development conditions. This particular situation may lead to large financial encumbrances both for the city and investors. New spatial development plans are often passed in contradiction to planning consent, which impedes progress and completion of previously established projects. This in turn leads to financial claims against the city. It is not only about the costs of drawing up plans, which does not act as much of a deterrent, but also about possible claims connected with the passing of plans: either the decrease in the real estate value, or the necessity for the city to take over the grounds for public infrastructure. And these costs scare away municipalities from drawing up proper spatial development plans - comments Jacek Bielecki, the President of the Association of Polish Developers. Potential losses incurred due to a spatial development plan, which was passed in contradiction to the planning consent, may amount for an investor to even 7-10% of the total investment value.
Spatial development plans are related to the type of buildings that are constructed in the city. In fact, there are no buildings higher than 100 meters in Cracow. Currently, the highest office building is Cracovia Business Center, also called by the locals Błękitek (English: the Blue Tower), which rises to the roof to 88 meters and 105 meters in total.
The plans only
Discrepancies connected with spatial development plans and planning consent, often obtained earlier, are the main issue to stir up numerous controversies, both for investors and Cracow’s inhabitants.
On the map of Cracow there are more buildings which future divides the public opinion. Two hotels are in the centre of attention: Hotel Cracovia and Hotel Forum. Both of them have been entered into the register of historic places. Today, these buildings, in extremely attractive locations, are unused, and the city has other plans for them than their present owners.
Hotel Cracovia is an example of a conflict between the investor (Echo Investment in this case) and the city. The owner of the building wanted it to be demolished and he planned to create a modern shopping center instead. According to the assumptions, the building would have had an expanded restaurant, café and bar function, as well as entertaining one, 4-hall cinema and a parking lot for 760 cars, which would have been partly accessible for the inhabitants. Those plans were, however, unsuccessful, because The President of Cracow rejected Echo Investment’s amendments to a project of local spatial development plan of the area of Błonia Krakowskie, where the former Hotel Cracovia is located now. Consequently, the investor is unable to implement his investment.
Another building which has been ended only with plans so far is the old office building of NOT (English: the Polish Federation of Engineering Associations), colloquially called “Szkieletor” (English: the Skeleton). The construction started in 1975 and its skeleton frame was completed after four years. For thirty four consecutive years, the project did not change, having become an unattractive symbol of Cracow’s architecture. In 2005 the building was bought by the present owner, the company Treimorfa, which shareholders are the Fundusz Eurozone, represented by Verity Development, and GD&K Group. Recently, the real chances for Skeleton’s implementation have emerged. Town councilors passed the presidential spatial development plan in the area of Lubomirskiego and Beliny-Prażmowskiego Streets, where the building is located. It will make easier to obtain a building permit. However, as Paulina Legut, Vice-Director of GD&K Group’s Project Management Department, explains: Resolution is not equal to binding force. An act of Town Council will be now submitted to the governor of voivodeship, who has 30 days to raise a possible objection. If he does not, the act becomes effective in 14 days after being published in the Official Journal of Malopolska province.
There are more examples of promising construction projects in Cracow that fell through. Here one should mention the construction of the office building MARR in Powstania Warszawskiego Avenue. The building was to amount to 12 000 sqm and to be located in the vicinity of famous Cracow’s “Zyletkowce” (English: the Razors). In 2010 the investor obtained the building permit design and in 2011 the building permit from the Mayor of Cracow, which was sustained by the Governor of Malopolska province. However, a formal complaint was lodged against the Governor’s decision to the Provincial Administrative Court and since then the case has been pending and the construction cannot be commenced.
Despite the above-mentioned cases, in Cracow there are buildings which prove that the renovation may also be very impressive. The building Biprostal and its famous mosaic on the southern wall may act as the perfect example. At first, the investor was planning to forge it; however, after the intervention of the monument conservator, inhabitants and media, the wall was entered into the register of historic places. This occurrence persuaded the investor to renovate the building. Thanks to this, the building has become one of the most important symbols of the old architecture of the city.
Cracow is an extremely interesting city when it comes to the architecture of newly constructed buildings. Every two years outstanding building design projects are awarded Stanisław Witkiewicz Malopolska province Award. In 2012’s edition, the building Yeti, owned by the Advertising Agency in Kryspinow, won in the category of public utility facility, whereas the best residential projects were: a villa made of architectural concrete and cedar roof in Libertow and the residential complex on Pod Strzecha Street in Cracow. In this place the Małopolska Garden of Arts should be mentioned since it was awarded on numerous occasions. The building by the architectural studio Ingarden & Ewy Architekci was commissioned in 2012. Despite the architectural value appreciated both by domestic and foreign specialists, the building is incredibly important for the city’s development. It is an example of smart and effective development of old and decayed buildings, as it itself was constructed in place of such a building complex.
Development of infrastructure
One of the essential factors for investors and developers who run a business or are planning to, is the infrastructure of a particular city. In 2012 Cracow underwent a real transport revolution. In November 2012 a new tram depot Czerwone Maki was completed in the Debniki district. Although the big changes in the public transportation network split the inhabitants into two groups, from the perspective of the city’s development it was a huge progress. Thanks to the extension of a tram line, locating new office real estate in Debniki enjoys a growing interest.
Another important infrastructural construction project is the development of John Paul II International Airport Krakow-Balice. In 2012 a decision was made to extend the airport and in 2013 the extension of the passengers terminal was commenced, which should increase passengers throughput to 1800 departing passengers per hour and 1800 arriving passengers per hour. This investment will cost 368.88 million PLN gross and will be co-financed by the Infrastructure and Environment Operational Programme and the Malopolska Regional Operational Programme for 2007–2013. The Italian company Astaldi has been chosen to be the general contractor of construction works, which will have been completed by March 2015. At the same time, the number of air connections with other European cities is increasing steadily. An example for this is the recent
offer extension by the Irish carrier Ryanair by flights to Dortmund, Gothenburg and Manchester.
Cracow has a good rail connection with Warsaw, and after rail renovations also with the Upper Silesian Industrial Region and Tarnow. Nevertheless, in comparison to Silesia, there is less transport activity in Malopolska province and international rail travels are impeded. The region’s future is Fast Agglomeration Rail, but its first transportation connections will be opened in 2015 at the earliest. The rail would significantly shorten journeys within and outside the city. In 2012 some problems occurred with the renovation of the Main Railway Station in Cracow. The main contractor, the Budus company, declared itself insolvent and the works had to be discontinued. Upon breaking of the contract, the Polish State Railways presented modified plans which assume the project to be completed by the end of 2013. However, it is worth noting that the city’s infrastructure allows investors to improve transportation connections during bigger projects. The railway station near the office complex Kraków Business Park in Zabierzow serves as a perfect example. Thanks to this development, commuting to the city centre has become easier. The railway transportation is to be improved by means of following Artsinvestments: renovations of railway tracks, new trains, including Pendolino, which will connect Cracow with Tricity.
When talking about the city’s accessibility, road transport should also be mentioned. Here the undisputed advantage of Cracow is its accessibility to the European network of motorways. In addition, next investments, such as a section of A4 motorway Tarnow-Szarow opened in November 2012, are to speed up traffic.
The condition of Cracow’s air is recently the main cause for a heated discussion. According to the World Health Organisation’s ranking, Cracow is one of the most polluted cities in the world with too large concentration, for example, of carcinogenic benzo[a]pyrene, suspended dust and nitrogen dioxide in the air. Representatives of the organization Cracow’s Smog Alarm informs that annually the city’s inhabitant inhales on average the amount of benzo[a]pyrene which is the equivalent to 2500 cigarettes. The city authority is fighting with this problem, for instance, by encouraging the Cracovians not to burn coal. Various factors are responsible for the air quality — stoves, means of transport, and industry. One may expect that around the year 2020 there will be a visible improvement of this condition, however, even then no one can talk about a complete solution of the problem, says Tadeusz Trzmiel, the first Deputy Mayor of Cracow responsible for construction projects and urban infrastructure.
In this difficult situation, an incredibly positive phenomenon the growing popularity of “green buildings.” The main postulate of those who invest in such buildings is to take care of environment and working comfort of employees. Thanks to modern solutions, those buildings emit less carbon dioxide and allow for reduction of electrical and heating energy. Investors often provide bicycle parking for cyclists and dressing rooms with showers. In addition, some investments are equipped with special charging places for Low-Emitting and Fuel-Efficient Vehicles (LEV). This kind of solution was used by a new Cracow’s office investor UBM in the Alma Tower building, which is currently under construction.
This article is a part of the report named „Architecture Transactions Investments. Summary in 2012 of the real estate market”, edited by staff e-biurowce.pl. Its full version is available here.