Madrid may be bloodied but it is not unbowed, and with a little luck – and a big new project – it could soon be back on its feet, says Jenny Southan.
As I prepared for a day of appointments in Spain’s capital, I flicked on the TV in my hotel room and paused on a channel broadcasting a bullfight. Although not a fan of blood sports, especially before breakfast, I watched it to try to get a sense of why its popularity has prevailed in Madrid despite it being banned in other parts of the country – Catalonia became the first major region to do so in January.
As the pink-socked matador swept his cape a few final times, the bull, now slick with blood and pierced with spears, made a couple of half-hearted charges before sinking to its knees. Sitting there forlornly, the estocada – or final blow – was delivered with a dagger to the head, and its body was heaved out of the ring.
There tends to be an intrinsic weakness in drawing metaphors, but as I switched channels to watch the news, which was discussing the economic crisis and Spain’s ban on short-selling shares in a bid to calm plunging markets, the death of the bull seemed befittingly symbolic.
Spain needs some luck. More pertinently, it needs to generate some money. Unemployment is at 24 per cent, it is in its second recession in four years and there are fears it will need a multibillion-euro sovereign bailout. Even though its banks were agreed a “credit line” of up to €100 billion at the end of July, the government insisted this was not a bailout and that its capacity for growth would ultimately lift it out of trouble.
In a BBC interview in July, Spain’s economy minister, Luis de Guindos, said: “We have made important economic reforms and reached an agreement with our regional partners over recapitalising the banks. We have done everything we can to ensure a return to healthy growth for the Spanish economy.”
But there is no growth, and the interest the country was paying on its borrowing costs reached 7.5 per cent in August. Compare this with the 7 per cent being paid by Greece, Portugal and Ireland when the Eurozone and IMF came to their aid, and it looks likely it will be forced to accept its position is unsustainable – particularly since two of Spain’s semi-autonomous regions, Valencia and Murcia, have now asked for a share of an €18 billion public fund (a third of which is from Spain’s state-owned lotteries and the rest from the government’s treasury). Catalonia, Castilla-La Mancha, the Balearic Islands, the Canary Islands and Andalucia were also considering requesting help.
As a consequence of all this, people are becoming angry. A mass demonstration through the capital’s streets this summer ended with police firing rubber bullets and charging protestors rallying against civil servant pay cuts and tax increases. Big construction projects, such as the eco-designed International Convention Centre, have been halted, while even the 2012 Madrid Masters golf tournament was cancelled because of a lack of sponsorship.
Despite all this, there is positive news and potential solutions. Alessandro Sansa, director of the Madrid Convention Bureau, says the past year has been “the best in history”, with 8.3 million visitors. The city has also been ranked sixth by the International Congress and Convention Association for a second year running for the number of congresses it has held in a single
year (130 – London came seventh).
Madrid-Barajas Airport is among the five busiest in Europe, with almost 50 million passengers a year, and has a capacity of 80 million, offering plenty of space for new services. Manuel Lopez Colmenarejo, director of corporate affairs for Iberia, acknowledges that 2012 numbers are expected to be down but blames this on the “economic environment and a tremendous increase of 50 per cent in airport charges in July”.
Jesus Sainz, chairman of Promo Madrid, which helps companies to set up in the city, says the capital is managing to defy the crisis to some extent. “Madrid has continued to achieve a positive rate of GDP growth over the past 24 months, and over the past ten years, a cumulative rate of growth of 2.4 per cent – higher than Spain [at 1.7 per cent] and the EU [at 1.3 per cent]. It reflects the benefits of the economic policies developed by the regional government over the past few years – mainly the reduction of bureaucracy and the lowest taxation in Spain, which has helped to create a business-friendly environment that encourages private investors.”
While youth unemployment in the country has hit 50 per cent, Amazon is set to open a new logistics centre outside Madrid in the autumn, in San Fernando de Henares, creating more than 500 jobs, and truck manufacturer Iveco is to invest €500 million in expanding its Madrid factory, creating 1,200 posts. This doesn’t come close to solving the problem, but one ambitious plan by US business magnate Sheldon Adelson, chairman and CEO of the Las Vegas Sands Corporation, would have a significant impact if given the go-ahead.
Dubbed “Euro Vegas”, it would comprise 12 high-end hotels, six casinos, three golf courses and a convention centre. The decision as to whether or not the project will be built in Madrid or Barcelona, which has also bid for it, is expected at the beginning of this month, and with its promise of 260,000 new jobs and an investment of €17 billion – making it the most expensive private investment project in Europe – there is much anticipation surrounding the announcement.
Sainz says: “The plan is to make Madrid the preferential MICE destination in Europe – similar to Las Vegas in the US.” It’s easy to see why this seems an attractive, and even realistic, goal. When the Sands Corporation built the Strip’s Venetian hotel in 1999, and the Palazzo next door in 2008, it sparked a trend for creating huge properties with integrated convention space. Midweek business went up, and the company now profits more from corporate events than slot machines. As other operators followed, visitor numbers in Sin City doubled to 40 million a year, and in 2011 almost five million of them were for conventions.
“I hope we will be successful because Madrid offers certain advantages,” Sainz says. “We have thousands of hectares of land available for the project, tourists with the highest spending in Spain and great infrastructure with the metro and highway system.
“What’s more, it is a project that is not just for Spain but for Europe, the Middle East and Latin America, and Madrid-Barajas Airport already has connectivity with almost 250 cities around the world. We are also in the centre of the country with seven high-speed train lines – Madrid already attracts about five million domestic visitors a year.”
Of the three proposed sites around the city, Alcorcon, 15km south-west of downtown, is the favourite. Sainz says: “Once finished, after ten years, it would be generating an increase in tourism revenue of €15 billion a year and about 10 million new visitors. The impact on GDP would be three or four percentage points – it would change the size of our economy.”
During his time as mayor of Madrid between 2003 and 2011, Alberto Ruiz-Gallardon worked hard to improve urban planning and quality of life for Madrilenos, and over the past year or so his vision has paid off. Parts of the M30 motorway that ran through the centre were taken underground, improving traffic and allowing for an extensive clean-up of the parallel Manzanares river that added 10km of pedestrian and cycling routes.
The Madrid Rio project, as it is known, was unveiled in April last year and is now a pristine 4 sq km waterside stretch with 33,000 new trees, playgrounds, gardens, skate parks, landscaped pathways and the new Arganzuela foot bridge, which was designed by Dominique Perrault and connects the neighbourhoods on either side of the water. The design is eye-catching – two twisting, conical tunnels made from ribbons of spiralling steel meet in the middle on a hill and allow people to walk down into the park. At night, it is illuminated with lights at the end of tree-like lampposts.
For locals, it couldn’t have come at a better time. Juan Carlos Caballero, division manager of the Intercontinental hotel, says: “The park is now together on both sides of the river and that has created a backbone for the city. Everyone can take advantage of it – my parents, at 82, can walk through gardens and trees, with benches to sit down. Young kids skate or ride bicycles, people have picnics – there is even a small beach, and a former slaughterhouse has been converted into a contemporary art centre called the Matadero. Before, the river was so polluted you couldn’t even look at it – now you can pass the day there with your friends.”
Whether or not Euro Vegas goes ahead, the proud people of Madrid will find a way to get through these tough times, and hopefully their leaders will not lose sight of just how important a bit of well thought-out green space can be for public morale. Olé!
EURO VEGAS IN NUMBERS
- 12 HOTELS
- 36,000 HOTEL ROOMS
- 6 CASINOS
- 18,000 SLOT MACHINES
- 3 GOLF COURSES
- 1 CONVENTION CENTRE
- 260,000 JOBS
- €17 BILLION INVESTMENT
- €15 BILLION GENERATED ANNUALLY
- 11 MILLION VISITORS ANNUALLY
- 10 YEARS TO BUILD
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