“We gradually noticed a few abandoned commercial venues being renovated and then new tenants moving in. They were mainly little boutiques owned by young adults and at first we felt a sense of pride that people were recognizing our neighborhood as a place for creative business activities but now, with all the bars and the traffic and the noise, it’s just too much!” says Agop Barberian, an old time resident and electronics repair shop owner in Mar Mikhael. He recalls how his once almost forgotten neighborhood emerged as a destination for designers less than a decade ago, and how it rapidly turned into what he now compares to an insatiable monster.
Mar Mikhael’s urban fabric
While districts such as Monot and Gemmayze have roared with nightlife since the 1990s, Mar Mikhael was considered a low to middle income, mainly industrial area where many car services outlets, metal workers and workshops could be found. These venues generated reasonable activity during the day, often noisy or smelly, especially when involving car repairs, but the evenings were always calm, recalls Barberian. The area, with its narrow streets and architecture dating back to the 1940s, retained a somewhat charming mode of urban life that was fading away in other areas of Beirut.
Speaking about what makes people appreciate an urban area such as Mar Mikhael, Mona Harb, associate professor of urban studies and politics at the American University of Beirut, explains that it is more than just the old buildings. Rather, according to her, the appeal lies in the very fabric of the district, such as the narrow streets signifying a time before the introduction of private cars to Lebanon, the little gardens in front of buildings where the neighbors gathered, and the stairways facilitating a climb over a steep hill. All of these elements gave the neighborhoods that had developed on the then-outskirts of central Beirut — such as Furn El Hayek, Zokak El Blat, Ain El Mreisseh and Gemmayze — a human side.
Designers move in
This charm was one of the main factors that first attracted those in the arts, crafts and design (ACD) industries to Mar Mikhael. “I fell in love with the wide space when I first saw it and I loved the industrial feel of the area,” says Maria Halios, interior architect and founder of MHD Designs, who transformed an abandoned chocolate factory in Mar Mikhael off Armenia Street into her office and design showroom early in 2009, when there was only Liwan, a contemporary design boutique, on that street.
Rania Naufal, owner of the arts and architecture bookstore Papercup, has been living in Mar Mikhael since 2005 and cites the “vibrant charm” of the area as the reason she opened her bookstore there, a few months after Halios.
Today there are approximately 71 commercial venues rented out to the ACD industry in Mar Mikhael including boutique retail stores, design studios and offices, according to the Mar Mikhael Creative District map developed by Georges Zouain, principal of GAIA-Heritage, with financial assistance from the European Union under the MEDNETA project. GAIA-Heritage is a Beirut based company founded by Zouain in 2002 which provides consultancy services to manage cultural and natural heritage. As part of the EU funded MEDNETA project, GAIA-Heritage launched on January 16 a week long conference entitled “In Mar Mikhael” aimed at regenerating Mar Mikhael and reinforcing creativity in the area.
Harb explains that ACD professionals were attracted to Mar Mikhael because of several factors: its central location, its urban features, its proximity to Bourj Hammoud — where many of the craftspeople are located — and because the rents were low when they first moved in. They did not fundamentally disrupt the social and economic life of the neighborhood.
As Mar Mikhael began to blossom as a “hip” neighborhood where the ACD industry could be found next door to mechanics in an industrialized yet artistic environment, it caught the eye of real estate developers, who saw an opportunity to use the area’s contemporary feel as a marketing tool to develop and sell their properties there. “The designers somehow participated in the promotion of residential real estate as we were used in their promotional brochures. People find it nice to live in a hip area,” says Halios.
[pullquote]With this rapid real estate development, Mar Mikhael has become unrecognizable[/pullquote]
And hospitality venues move in
Around the same time, towards the end of 2010, hospitality developers who were fed up with the high rent costs or overcrowding of places such as Downtown’s Maarad street or Hamra were looking for a new area to expand into and found Mar Mikhael to be perfect for their needs. Like the designers, they were enticed by its proximity to Gemmayze, its low rents and urban heritage charm. Very quickly, two or three pubs on Armenia Street progressed into more than 40 hospitality venues, with more slated to join the mix in 2015.
With this rapid real estate development, Mar Mikhael has become unrecognizable to its long time residents who complain of not finding anywhere to park, of the intense traffic, of the loud noise at night and of having to pick up broken bottles and debris from their doorsteps every morning.
Commercial rental prices were driven up by the boom in the area and landlords who were charging a mere $600 per month for a 50 meter square commercial venue back in 2009 are now asking for, and getting, $3,500 a month, a 483 percent increase. While part of this increase is due to normal market inflation, part is also due to opportunism among landlords.
It’s all about the money
Concentrations of hospitality venues tend to be transient in Lebanon: they have migrated from Monot to Gemmayze to Hamra to Uruguay Street and now to Mar Mikhael, with many already moving now to Badaro. All of these destinations became intensely popular for an average of three years, before the customers and operators moved on. Many landlords are seizing the narrow time frame to maximize their profits and are asking for significantly increased rent from their commercial venue tenants, evicting them when they can’t pay and their rental agreement is up, or paying them the key money they owe them, if they are on the old rental agreement, and giving them a month’s notice to pack their bags.
Victor Hamdjian is standing in front of the small garage where he now works as an employee. He points to the larger garage down the street which he used to operate himself on a property he rented, but has now been rented to a restaurant. Hamdjian names seven other industrial businesses, all in just two alleys off Armenia Street, which have closed down in the past two years to make way for a restaurant or bar. Hamdjian explains that it is not only the increased rents which have driven these businesses away, but says the whole area is changing and there is no room for them anymore.
Zouain explains that a market only thrives by the agglomeration of trades that complement each other, which was the case with the industrial workers in Mar Mikhael and also with the ACD industry today. However, unfortunately this is slowly fading from the area in favor of hospitality venues.
Many of the designers feel that the area is changing in terms of what first attracted them to it and worry that they will not be able to compete rent-wise with the wealthier hospitality venue owners in the long run. “Two years ago, the hospitality investors began moving into the area and so now you see fewer designers opening up here. Restaurants are paying more in terms of rent so commercial real estate owners prefer them as clients as opposed to us designers,” explains Halios, adding that her rent contract will end in June. While she is not sure if her landlord will increase the rental fee, she is confident that her landlord will not rent the venue to a pub as she wants to preserve the street’s quality.
Naufal says her rent has increased since her contract was first issued but is still “viable and realistic.” She adds: “However, I did hear of other landlords in the area who are being extremely greedy at the risk of losing their current tenants and changing the spirit of the neighborhood.”
Halios wishes new young designers would open shops in Mar Mikhael but knows that this is unrealistic at this point and fears that the sense of community that was created among designers in the area is being destroyed. “It’s a pity though because we really built a connection with this area and helped shape it. We have good energy and good communication between us in the neighborhood and organize events among each other for the street,” she says.
[pullquote]Gentrification is not necessarily harmful and there is often a gain for the city and its residents[/pullquote]
Balancing act of gentrification
Gentrification is not unique to Mar Mikhael or even new to Beirut, as Harb explains. Monot and Furn El Hayek went through it in the 1990s, but with less intensity than Gemmayze and Mar Mikhael.
However, adds Harb, gentrification could bring economic opportunities for the city and its residents if it is managed in a way that takes into account public interests. Halios says that some of the restaurants in the area, especially those that open on Saturdays for lunch, compliment their ACD venues and generate some added business for them. “Since the restaurants opened, we have had increased footfall to the area and in our businesses. I am seeing some new faces that are not my usual clients. The positive effect of the presence of such restaurants in Mar Mikhael is that a crowd of potential clients are discovering the area because of them,” says Halios.
As one landlord, who is currently using his property as an electronics repair shop for cars, puts it, “I am asking for $150,000 annual rent for my shop because it is big. If I get it, I will gladly rent it and retire: who keeps on working like this when they can just relax and have money delivered to their doorstep?”
“The challenge is how much one wants to develop an area economically without destroying its heritage. It is a balancing act,” says Zouain, explaining that GAIA-Heritage doesn’t want to prevent construction or harm the economy. Rather it wants to do what should be done in any city that grows in an organic and harmonious manner: balance the interests and needs of the community with the need of the investors. This is what the “In Mar Mikhael” conference is attempting to illuminate.
Harb also speaks of the importance of balancing private economic interests and public interests when it comes to development of a neighborhood with remarkable urban heritage such as Mar Mikhael where gentrification risks are high. “The problem is that we lack a strong public agent, such as the municipality, willing to implement existing urban planning regulations that can protect the public good, of which urban heritage is a key element, and to restrict the freedom of private real estate developers who will always look for ways to enrich themselves,” says Harb.
This lack of regulation applies to residential real estate as well. Real estate developers have been obtaining several small lots, which, by themselves, are not big enough for huge developments, but when joined form a big piece of land which they can then build high rises on, as is evident by the three towers already protruding awkwardly amidst the short buildings of Mar Mikhael. While this is not illegal, not regulating it could lead to Mar Mikhael becoming a jungle of towers and losing its urban identity, says Harb.
The ironic aspect, explain both Zouain and Harb, is that commercial and residential real estate developers, through their unregulated growth and the rising rents they bring to the area, end up destroying the very elements that first attracted them to it, namely its authentic charm. “What is going to happen if we leave the market totally free is that all those who want to buy the developers’ condominiums in Mar Mikhael because the neighborhood has a charming flair will end up living in a place that is as dull as any other place in Beirut and will move on,” says Zouain, adding that this, in the long run, will lead to the rental prices going down again for both the commercial and residential projects.
Through the “In Mar Mikhael” conference, Zouain is hoping to initiate dialogue between the residents, the ACD industry and the investors on how they are all sharing and shaping the Mar Mikhael of today and what their common needs are. His next aim is to make the municipality of Beirut, the Ministry of Culture and the real estate developers aware of the importance of protecting Mar Mikhael’s urban fabric before it is too late. “We are fighting it but I don’t know if we can really do anything: we are trying with our goodwill, the tools and knowledge we have. We will see what will happen but it is very long term,” concludes Zouain.