It is the sleepy, forgotten neighborhood of overdeveloped East Beirut where, until recently, Achrafieh, Saifi and Gemmayze have been having all the fun and attracting all the attention. But in the last two years, since the party music emanating from Gemmayze pubs began to be matched by the disapproving cries of residents and government officials, the traditional quarter of Mar Mikhael has been soaking up the commercial overflow as bar owners, artists and entrepreneurs have headed a little further down Rue Gouraud. The area’s unspoiled charm and cheap prices have proved a tempting combination for Beirut’s young guns.
But where the young guns go, the big guns are sure to follow. Real estate developers insist that demand can only keeping rising in this strategic area, situated in the Rmeil district between Gemmayze and Bourj Hammoud, that hasn’t seen new construction for some 40 years.
According to developer Pierre Moise, Mar Mikhael’s old world feel is part of the reason why Lebanese expatriates, upscale yuppies and Europeans are drawn to it as a living quarter. They are the target buyers for the gleaming new residential towers and mid-rises planned — and currently in the excavation stage — along the main Armenia Street and its side streets.
As young Lebanese are quickly being priced out of the market in the Achrafieh and are showing less interested in living in Gemmayze, more and more are happy to settle down in what Moise and others say is Beirut’s new Soho. Developers attribute increased demand for this enclave to its relatively strong infrastructure, particularly the two-way streets that provide direct access to Charles Helou — the main highway — and twice the parking spaces of Gemmayze.
“The key shift in the market now is that developers are choosing to build more small apartments, ranging from 80 square meters to 150 square meters, because young professionals are really the ones most interested in living here, and many just want a ‘pied-á-terre’ near Beirut,” Moise said.
Due to old rental laws — which often hold rents at rates decades old and leave landlords out of pocket — many owners of old structures are happy to sell to developers who will demolish traditional, low-rise houses and build high. Indeed, as private developers have little oversight from the Beirut municipality or the Director General of Urban Planning (DGU), they are building high and charging even higher, making the rapid development a cause both for concern and speculation.
According to Serge Yazigi, head of Majal Urban Observatory at Académie Libanaise des Beaux Arts of Balamand University, Mar Mikhael is “one of the few, if not the only street of this length in Beirut that benefited from planning… you have a certain alignment, you used to have buildings of the same height, you have 10 to 12 stairways that lead to courtyards and gardens and also heritage buildings.
“From Sahet al Debbas to just before Bourj Hammoud, the whole neighborhood has architectural features that you don’t find anywhere else in Beirut.”
However, the area’s historic character, social and commercial fabric could all vanish as land prices creep up, changing the area’s demographics and spatial networks.
Rising residential developments
The case of Al Mawarid Real Estate’s 22-story Skyline tower neatly illustrates this point. According to General Manager Rania Akhras, the company was “convinced that Mar Mikhael was going to be the next Gemmayze. We thought bringing in someone as modern as Bernard Khoury [as the architect] would make it [the Skyline] a landmark.”
Akhras says that as the plot, situated in a corner off the main Armenia Street, was unoccupied and not surrounded by buildings of architectural significance, there was little incentive to keep with the quarter’s architectural heritage. They took the opportunity to combine four plots to increase the exploitation factor.
“I hope that some of the other buildings are preserved because it’s a very nice area. But the building code and plot size forces us to build high,” she says.
On the main street where the old Vendome Cinema and adjacent building have been demolished, Philippe Tabet of Har Properties has teamed up with Fahd Hariri to build Aya, a $30 million residential tower, constructed in what Tabet calls the architectural style of old Yemeni buildings. A source at the Rachid & Karam Architects, commissioned for the project, calls it “ultra modern.”
Ironically, when the developers first acquired the site, a rush of businesspeople approached them, wanting to rent the old cinema and turn it into a restaurant or nightclub, but instead they acquired the surrounding plots and paid the eight (mostly commercial) tenants a total of $900,000 to pack their bags and make way.
Har Properties boast of Aya’s strategic, in-demand location, describing Mar Mikhael as “a place where arched doorways, romantic stairways and sepia shutters recall the true essence of Beirut.” Others argue that it is precisely this charm that the 20-story-high contemporary tower will destroy, saying it has no place in the neighborhood.
“I’m really quite sad that the Vendome [cinema] has become a tower,” says Nayla Kunig, a local developer. “I think the young and intelligent Fahd Hariri, who is a designer, should have thought more in terms of urban landscape. How does [Aya tower] look in this urban landscape which is [mostly] low houses?”
Kunig says she’s not an investor. In fact, she’s a member of the National Heritage Foundation founded by Mona Hraoui, which aims to preserve traditional Lebanese architecture. But she’s also the developer behind the East Village residential project, located one block away from Electricite du Liban, which she describes as “contemporary but friendly.”
“I’m absolutely convinced that you either restore an old house or do something modern. But you can’t do pseudo Lebanese work,” says Kunig. The East Village’s 12 flats have all been sold except the top floor, mainly to young Lebanese to maintain the “social fabric” of the quarter.
Developer Pierre Moise is also concerned with maintaining a certain social demographic. His approach is quite blunt: “I sold only to Christians,” he says, claiming that maintaining the sectarian makeup of the area is part of preserving the culture. Moise is renovating a three story building that dates from 1955 called “1099,” tucked into Alexander Flemming Street in the heart of the design district. He’s adding four more floors and converting the existing underground space into a parking garage.
Enter the speculators
Har Properties’ Tabet insists he is also being very choosy when it comes to buyers for Aya, although his ire is turned against speculators. “I don’t want to encourage speculation. The speculator is dangerous. If the market turns around and the price goes down, the speculator can’t continue his payments.”
When developer Kunig and her financial partner bought their land more than three years ago, prices were still “reasonable” for the almost 1,000 meter square plot. They agreed to pay the private owner $1.2 million, but lengthy negotiations with the municipality over issuing their permit drove the total cost to $1.7 million, mainly for tax purposes. This would suggest that the municipality is contributing to price inflation, and thus promoting speculation.
“Now the land on the main road of Mar Mikhael is $4,000 per square meter,” says Kunig. “I would like things to be lived in by the people who have to live in this part of the city, and not some funky millionaire from somewhere else. I refuse to sell to speculators who just follow the hype and have to have a place in a trendy neighborhood that they visit once a year.”
In stark contrast to the other developer’s Executive spoke to, Akhras boasts that there have already been two buyers who have resold their apartments in the Skyline for a higher price, illuminating the speculative nature of Beirut’s real estate market.
Most developers agree that the price of land took off after the Doha agreement gave the property market a confidence boost in the summer of 2008. Christian Baz of Baz Real Estate says the price of land in Mar Mikhael varies depending in to which zone the plot falls, but the value of property has risen across the board since 2008 in tandem with rising prices in Achrafieh. The firm has three 400-meter plots they are selling: one in zone three priced at $5,500 per square meter, and two in zone six priced at $3,000 per square meter and $2,500 per square meter, respectively.
Mar Mikhael’s mokhtar (municipal representative) Beshara Gholam is happy to see the area becoming akin to Gemmayze, and says the rapid development is a good thing.
“You have owners who are getting the opportunity of a lifetime when developers come pay them big money to buy their land to build a tower,” he says. “And then with all this increased activity, there is more employment.”
But others don’t share his happy sentiments. Yazigi of the Majal Urban Observatory points out that the unique Lebanese heritage of the area is in danger if plots can be combined to build towers of any height in such a relatively unspoiled area — though there is currently a law under study to prevent this type of plot merger. He suggests preserving the whole quarter to promote long-term sustainable economic development, saying that while it’s normal to have evolution, it should happen gradually.
“We must keep residents in their location, to keep the same quality of life and commercial activities,” he says.
The larger picture of what’s happening is what Yazigi calls “Solidere’s gentrification process,” whereby their development in downtown Beirut is indirectly increasing prices in surrounding areas. At this rate, he says, the next generation won’t be able to live in central Beirut or within this ever-expanding radius because of such rapid luxury development that keeps pushing prices up.
“This is what happens when the private sector is shown a totally open door and there is no coordination with other groups,” Yazigi claims.
For example, he says about 40 percent of the original residents of Monot left the neighborhood during its golden nightlife period when prices escalated, and when the commercial district was suddenly abandoned, the quarter was left with its social fabric in ruins.
“We are not against the private developers,” says Yazigi. “We are criticizing the fact that the state doesn’t accompany this dynamic, or put mitigation measures, and try to re-orient the private sector.”
Whether this happens, and the rapid remaking of Mar Mikhael becomes an evolution for the area merging its historic charm with contemporary demographic demands, is a question only time can answer.
If the long-term health and sustainability of the urban environment are of any concern, other neighborhoods in Beirut that have faced a similar assault from the forces of development are no examples to emulate.