Four large hotels negotiate an extension with Colau to remain in Barcelona

BarcelonaBarcelona City Council's Urban planning team is in the middle of unprecedented negotiations this week: the extension of the concession to five large hotels in the city, among which is the gigantic Fairmont Rey Juan Carlos I on Avinguda Diagonal. The concession ends 20 years from now and, if no extension is agreed, the owners of these hotels will have to hand over the keys to the establishment to Barcelona City Council, which will become the owner of the site and the hotel. This was agreed in 1991, when land intended for public facilities was rezoned to allow the building of large hotels, a plan known as Clau 10. This urban planning alteration - which mortgaged an important part of public space - was justified because hotels had to be built urgently for the 1992 Olympic Games, according to the municipal government of the time. "The Hotel Plan was practically an obsession of Mayor Pasqual Maragall", explains a former collaborator of his at the time. In fact, the plan was known at the time as "Maragall's Hotel Plan". Besides the Fairmont King Juan Carlos I, the other establishments that would also become City council property are the Hotel Plaza (in Plaç Espanya), the Hotel Fira Palace (on Rius i Taulet) and the Alimara (in Vall d'Hebron). The outcome of this negotiation will have a great impact for all of them and their workers, but also for all citizens, since at stake is the possibility of recovering a lot of public space in a city where it is difficult to find an inch of unused land.

The controversial agreement, which also had the approval of the Generalitat, was valid for 50 years with the exception of the Hotel Plaza, which was lent for 48. The text, which so drastically altered the configuration of the city that it forced the modification of the General Metropolitan Plan (PGM), warned: "After this term will result in the return of buildings and facilities, in good working order, to the City Council", and predicted that it would entail "a significant increase in public assets". But thirty years later, neither Mayor Ada Colau's government intends to start managing hotels (nor keep the land and demolish the buildings) nor the current owners are planning to abandon the business, since everything suggests that, once the pandemic is over, tourism will return to Barcelona. Moreover, taking into account that it is increasingly difficult to open new accommodation in the city due to urban planning constraints, those that are already built gain even more value.

At first, all those affected tried to negotiate as a group with Barcelona City Council but "it did not work", according to sources involved in the matter. So the owners of the five hotels decided that each would negotiate on their own. Fairmont Rey Juan Carlos I is in the biggest hurry, as the hotel is for sale. The establishment, which was renovated in 2014, continues to be owned by the Barcelona Projects group, the real estate company of the Saudi prince Turki ben Nasser. The operation could be concluded soon thanks to interest shown by Apollo Global Management group but before signing anything is key to get the extension of the concession. Juan Carlos I, as is also the case with the Hotel Feria Palace, was built on private land but the owners gave ownership to Barcelona City Council in exchange for not having to pay local tax for 50 years. Therefore, the land is now publicly owned. In the case of the Hotel Fira Palace, on Rius i Taulet street, the current owners (Intercontinental group) are making comprehensive reforms to transform it into a luxury establishment with the idea of continuing the business. Consulted by this newspaper, however, neither of the groups have wanted to make statements. The land on which both the Hotel Plaza and the Alimara were built is also public and, in this case, the owners of the establishments pay city tax.

There are two more hotels that were also built thanks to Clau 10: Hotel Apolo and Barceló Sants. Both, however, will be able to continue after 20 years because they were built on plots of land that do not belong to the City Council. The first is private, owned by the American fund Vardë Partners, while the second belongs to Adif and is currently, and until 2035, exploited by the Barceló group.

"We must find a permanent solution and not have to keep extending the concession," the deputy mayor of Urbanism, Janet Sanz, explains to ARA. In exchange for this regularisation, which could be definitive, the current government team does not want the businesses to pay a lump sum, but prefers that those affected give the City Council a plot of the same value, taking into account not only the area and location, but also the value of the building, since, according to the agreement, it is the land and the building that would become publicly owned.

Hotel and training centre

Among all those affected, there is a case in which the termination of the contract affects much more than a hotel. "Our case is very different from the rest," says Elisabet Ferrer, manager of the group that manages the Barcelona School of Tourism, Hospitality and Gastronomy (CETT) and the hotel Alimara, in the Vall d'Hebron. Both the hotel and the CETT, which opened its doors in 1995, would have to hand over the building in 2041, but its owners want to continue. "We have made this project our life project," explains Ferrer. After disassociating themselves from the rest of the affected hotels, they have submitted an application to the Barcelona City Council to extend the concession and thus "be able to recover the investment and compensate for losses" that the sector has suffered during the pandemic. Since they began to exploit the two buildings, they have invested more than €17m in reforms or extensions. So far, they have not received a response but are optimistic: "We have a social interest for the city," defends Ferrer who recalls that the Hotel Alimara served workers from Vall d'Hebron Hospital during the worst weeks of the pandemic - in exchange for money that the Generalitat paid the hotels that gave this service - and also have places for evicted families in the student residence they have in the same neighbourhood. In fact, the group is heavily invested in this part of the city: the CETT (which is attached to the University of Barcelona) has students who can work or do internships at the Hotel Alimara. In addition, those who live outside the city can stay at Ágora residence, which is also in the neighbourhood. Leaving the facilities would be a real shock for them.

A very different city

Thirty years later, it is hard to believe that before the Games there was a lack of developers to build hotels in Barcelona, but the city, at the end of the 1980s, was playing in a different league. The city was barely open to the sea, there were still more than 1,000 shacks in shantytowns in some of the outlying districts and, in the heart of the city, the red light district was in full swing. In 1990 there were only 84 hotels of between three and five stars, offering a total of 15,656 beds. The figure was notably lower than that of surrounding European cities: while in the Catalan capital there were 4.7 hotel rooms of three or more stars for every 1,000 inhabitants, in Milan there were 7 for every 1,000 inhabitants, in Amsterdam 10.5 and in Paris 13.2. There are even more significant data: only 52% of hotel rooms in the city had parking spaces and none had outdoor sports facilities. The reason the City Council presented the Generalitat to justify the urgency in the construction of hotels predicted "a very significant rate of growth in tourism" and argued that not only was there the horizon of the Olympic Games but also that tourism in Catalonia was growing and that urban tourism was also increasing on an international scale. Everything suggested that the hotels that would be built would accommodate the thousands of people expected for the Olympic Games and then would continue to be needed by all the tourists who wanted to visit the Catalan capital. Barcelona was taking the step towards becoming the city of services that it is today and the only question was (and still is) at what price. "The municipal government already had the idea of making Barcelona a tourist city," recalls Antoni Luchetti, who was a councillor for the Iniciativa per Catalunya (IC) during that term of office. The party, which only had two councillors, formed a coalition with the Socialists and, on this occasion, voted against their own government. "It was very hard, we received a lot of pressure," Luchetti recalls now. "We did well, because we wanted to denounce the lack of facilities and the largesse of rezoning," he says. Finally, Maragall was able to approve the hotel plan thanks to the support of the PP.

At that time, urgency played against the City Council and the city was willing to welcome anyone willing to build the hotels. Now, however, Barcelona already has 348 hotels of these characteristics and offers a total of 65,537 beds. The situation has changed radically and there is a certain tourist fatigue. The current government even defends a decrease in tourism, an unthinkable position 30 years ago.