Prague to resurrect forgotten land in the shadow of its spires

By Michael Kahn

PRAGUE (Reuters) - Known as the city of a hundred spires, Prague's gothic cathedrals, cobblestone streets and hilltop castle towering over the river create a picture-perfect tourist dream.

Yet in the shadow of the fairytale setting lies a less romantic realm of derelict factories, shuttered breweries and other remnants of a faded industrial era, which city officials and developers see as an untapped treasure.

These dormant industrial sites, largely abandoned since the Velvet Revolution unseated Communism 30 years ago, may not adorn postcards but they occupy large swathes of the city center.

Now Prague authorities are aiming to give these areas a new lease of life in an attempt to ease an acute housing shortage, create jobs and attract investment in projects.

The potential is huge.

Unused "brownfield" sites in the center cover an estimated 940 hectares, the equivalent of 1,000 soccer fields. Proposed projects include converting an abandoned milk factory into shops and apartments, and turning part of a derelict train station into office and residential space.

Prague Deputy Mayor Petr Hlavacek told Reuters these efforts showed the city was finally getting serious about remaking these areas and clearing bureaucratic hurdles blocking development.

"Prague and the Czech Republic were under Nazi and Communist rule for 40 years when discussion of what a city should be like was virtually prohibited," Hlavacek said, adding the city had targeted 15 brownfield sites for redevelopment.

"We are trying to unblock these brownfields by setting out a clear vision."

City officials have for years largely overlooked the dozens of shuttered factories, train stations, breweries and other manufacturing facilities in recent decades, he added.

A number of projects are set to break ground in 2019, something which city officials and developers hope paves the way for a wave of investment.

But, to turbo-charge the investment flow, Hlavacek said the city needed to move faster to finish a long-debated masterplan so that it can take effect in 2023 to provide a broad overview of how these areas should be developed.

UNESCO-PROTECTED

However it is not easy to conduct extensive construction work in a historic, UNESCO-protected city center. Navigating a lengthy permitting process, complicated by the fact each of Prague's 57 districts wield their own power, has slowed progress for local investors and largely blocked foreign investors so far.

"If you compare Prague to western European cities there is a relatively large amount of underdeveloped brownfields," said Martin Barry, founder of reSITE, an urban development non-profit organization. "Things have finally started moving because the city has figured out that those areas are prime development opportunities."

"But they can't simply will it to happen. They need to fast track them, instil confidence, and attract foreign investors with the experience and deep pockets because only a few developers on the local market can take on these big projects and finance the infrastructure and quality needed."

Three of the biggest projects on the table could house 50,000 new residents and provide an estimated 150,000 jobs, according to estimates from the city's planning office.

Penta Investments, a leading local developer and investment group with 10 billion euros in assets, is turning the site of a 17th century brewery into commercial and office space and up to 400 apartments in a 2 billion Czech crown ($85 million) project.

"We found the biggest opportunities in Prague were in brownfields," said Petr Palicka, Penta's managing director. "It is difficult to find an empty site in Prague or a city like it."

Prague's Sekyra Group, meanwhile, is about to start construction at a 21-hectare site where it will turn part of a train station located on one of Prague's largest brownfield sites into office, retail and residential space.

"When we started developing brownfields 20 years ago there was more or less no support from officials," said Sekyra CEO Leos Anderle. "But now we feel the support of the city and plan to finally break ground this year."

(Reporting by Michael Kahn; Editing by Pravin Char)