REGENERATION - Mixing old and new

  • 2007-08-22
  • By Joel Alas

A BREATH OF LIFE: An artist's impression of the Volta apartment complex. Previously a car motor factory,the inner-city Tallinn building is being renovated to house 92 luxury apartments.

Eyesore or opportunity? Dotted across the Balticsare decaying, abandoned and often enormous structures's factories that once fed the U.S.S.R.'s mammothindustrial machine. After that machine broke down,these factory complexes were left as a testament toeconomic collapse, sometimes fascinating, usually ugly,but mostly just in the way. Lately, however, real estatedevelopers have been incorporating these structuresinto new building projects, transforming them intoshopping malls, apartments and art galleries. In thisinstallment of Industry Insider, The Baltic Times takes alook at the phenomenon of breathing new life intoindustrial properties.

TALLINN- Around the world, the trendof gentrification has seencities turn to their oldindustrial areas as zones of revitalization.While the Baltics has beenslow to join the industrial renovationboom, a number of keyprojects are appearing in the capitalcities. As land in the city centersbecomes scarce, old factoriesin urban areas will become primecandidates for renovation.Real estate experts said therewas unmet demand for goodwarehouse space and central residentialdevelopment sites. Theskeletal remains of Soviet-erafactories, which have long blightedthe Baltic landscape, are nowbeing viewed for their reconstructionpotential.

"To do a new building is easier,but more costly. With oldbuildings it's a question of luck.You never know what you willfind inside," said VeikoVeskivali, board member ofKoger Kinnisvara in Tallinn.His company is considered anexpert in post-Soviet renovations,having carried out threelarge-scale overhauls in recentyears. Veskivali said most sturdy,old, Soviet-era buildings make forgood renovation projects."They have enough strengthto rebuild them because they arebuilt to over-capacity," he said,meaning the Soviet constructorsused thicker and stronger materialthan normally required. "Youcan easily add a few floors on topof these type of buildings."In the Baltics, warehouse livinghas yet to attain the chic statusit carries in places like NewYork and London.

This comes asno surprise 's after all, Tallinn,Riga and Vilnius are comparativelyyoung cities in terms ofmodern redevelopment. In thefirst fifteen years of rebuilding, aheavier focus was placed on theconstruction of brand new structuressuch as glass towers, newapartment buildings, and big,boxy warehouses. Global trendswould indicate that the Balticcities are now due for a bout ofindustrial-zone gentrification.Koger is currently putting thefinishing touches on a major renovationin Kalamaja, an inner-citysuburb with an undeserved dubiousreputation. Long regarded as aden of bums and thieves, Kalamajais at the start of a major gentrification.Its proximity to Old Townand its mix of old residential andindustrial buildings means it is aprime location for renovation.Koger's Kalamaja project is anold motor vehicle factory on Voltastreet.

Abandoned since 1994, thebuilding is being remodelled into 92luxury apartments. It borders anunused 8-hectare industrial site thathas been marked for revitalization."In the beginning nobody hadany idea that this factory would bevaluable. But it is on land close tothe center, and there aren't manyof these kinds of sites left inTallinn," Veskivali said."For the Volta project, thecarcass of the building wasstrong so we could build two newlevels. We had to put holes in thefloors to make some two-floorapartments, and we had to put innew elevators. But otherwise weused the same skeleton of theoriginal building."This is the third industrialrenovation project for the company.Its most high-profile overhaulwas the Fahle paper mill complex.A large glass box atop an old brickbase, the Falhe tower is the firstlandmark to greet visitors as theytravel from the airport to the city.

Although the renovation ofthe building was deemed a success,the building failed to attractnew life to the area. It was envisagedas a multi-purpose culturecenter, with apartments, restaurants,concert halls, shops andeven an art academy campus. Sixyears after the project's conception,the art academy has yet totake occupancy, and its entertainmentvenues are empty except forthe occasional concert.Across the real estate market,projects such as Volta and Fahleare exceptions. Most Baltic realestate buyers still focus on newstock. Tallinn's Arco Vara realestate company fields manyrequests for industrial warehousespace, and although there aren'tenough properties to meet thedemand, most customers stillseek out new premises."Mostly companies want theirindustrial premises built to suittheir requirements," an ArcoVara spokeswoman said. "Thefunctionality of the older premisesis not as good, and generallyit's not what companies are lookingfor.

New buildings have betterfunctionality."In Lithuania, industrial renovationsremain rare. VaidodasSarge, executive director of theLithuanian Builders Association,said it was more common fordevelopers to seek out greenfieldsites. From a cost perspective, arenovation project could carrythe same price tag as a fresh construction,due to the risks of deterioration.But Sarge said risinginner-city land costs mightchange the situation."Businesspeople who havebought such properties are lookingfor possibilities of what to dowith them. The purpose of thesebuildings could be changed, fromfactory to residential," Sargesaid. "I think a lot of them are nothistorical, but from the Sovietera, so they are not as beautiful assome factories in other cities."