Friday, March 4, 2016

From Humble to Hedonistic: the gentrification of Andermatt, Switzerland

Andermatt expansion plan - Courtesy of Andermatt Swiss Alps AG
Competing with glitzy St Moritz and Zermatt, Egyptian-born billionaire developer, Samih Sawiris hatched a daring plan to transform humble Andermatt into a year-round resort.

After a helicopter tour of the central Swiss mountainous area in 2005, he mapped out ski hill improvements as well as a blueprint for 25 topnotch chalets, six hotels, an indoor pool, an 18-hole golf course, and a chain of 490 condominiums across 42 buildings. 

With a dwindling population of around 1,400, the former army town had been struggling economically, with many younger residents migrating elsewhere for job opportunities. Swiss Tourism figures recorded around 60,600 overnight hotel stays for 2012 whereas rival resort, St Moritz clocked up 692,000 and Zermatt almost 1.3 million.

Gemmstock Mountain, Andermatt - Courtesy of Andermatt Swiss Alps
Sawiris’s global real-estate company, Orascom Development Holding AG kick started the $2 billion gentrification project by purchasing around 345 acres of developable land, on which his Swiss company, Andermatt Swiss Alps AG, is now realizing the project. Already popular with off-piste skiers, the pretty village was surrounded by a varied and challenging ski area on the 2,961-metre Gemsstock Mountain. While these predominantly Dutch, Scandinavian and local expert skiers were content to hike to fresh snow, much of the new ski infrastructure development would focus on improving the inbounds ski area, opening up the appeal to every level of skier and snowboarder. “The SkiArena Andermatt-Sedrun project will see six new lifts linking Andermatt with the high plateau at Oberalp and the Sedrun ski area by the 2017/18 season, creating the largest ski area in central Switzerland,” said Will Hide in an article for The Guardian Travel in November 2014.

Andermatt's Glacier Express - Courtesy of Andermatt Swiss Alps
Ecosign was responsible for the ski hill structure plan with stakeholders, Andermatt Gotthard Sportbahnen, the Sedrun Bergbahnen, the MatterhornGotthardBahn and Andermatt Swiss Alps all working closely together. Plans included construction of a gondola from Andermatt to Nätschen and Guetsch; a six-seater chairlift from Oberalp to Calmut; an improved connection between Nätschen and the Matterhorn Gotthard Bahn; a six-seater chairlift on the Gurschen; the covering of the valley descent from Gurschen to Andermatt with artificial snow; plus the continuous connection of the Ursern Valley with Sedrun through mountain infrastructure. In addition, there would be extensive snowmaking installations as well as new resort restaurants. Ground breaking for this - the largest Swiss ski resort development at the time - was scheduled for summer 2015 with the first two chairlifts (Oberalp Calmut and Gurschen) opening for the 2015/16 ski season.

Andermatt - Courtesy of Andermatt Swiss Alps
In any resort development, community collaboration is key and this is where Sawiris excelled. At a town gathering, he got locals on board by presenting (in fluent German) his plans to bring hundreds of jobs to the area, with sketches and also pamphlets about his successful regeneration of a Red Sea desert resort at El Gouna. He worked with local farmers and town-dwellers in decision-making forums, listening to and adopting some of their ideas for traffic re-routing, building heights, land use and financial compensation. The village voted overwhelmingly for the project in March 2007 (96 per cent of Andermatt residents and 88 per cent from neighboring Hospental). The company also produced a comprehensive FAQ document, prepared especially for the community and potential investors. It answered questions ranging from why Sawiris identified the area in the first place, to environmental concerns, affordable housing, critical mass worries, new ski infrastructure plans right down to the minutiae of second home furnishings.

Andermatt - Courtesy of Andermatt Swiss Alps, photo by Karin Muller
Breaking ground on Sept 26 2009, the blueprints called for a modern design to blend with Andermatt’s traditional cobblestone alleys and rustic wooden chalets. Financing for the development came from pre-sales, Orascom and a $160 million personal investment by Sawiris, said Marta Falconi in a 2013 article for the Wall Street Journal. Falconi said it was a “risky venture”. Competition was coming from other developments around Switzerland including nearby Lake Lucerne. “The developer struggled 1 ½ years ago to keep up the project’s timetable and cash flows, prompting some investors to swoop in,” said Falconi. “One of them, Hans-Peter Bauer, a co-founder of the Swiss Finance & Property AG real-estate firm, bought 72 units for about $135 million.” Bauer, who now sits on the board of Andermatt Swiss Alps, has been responsible for pitching the resort to overseas investors in Singapore, Hong Kong and Russia. Unlike most Swiss resorts - which are subject to the Lex Koller law which drastically limits foreign investment – the Sawiris project in Andermatt is exempt and is targeting markets in Switzerland, Germany, England, Italy and overseas. The FAQ document explains that although the global economic recession coincided with the timing of the project, Sawiris was confident that the project would be implemented as planned although over a longer time scale than originally anticipated.

Alongside ski lift redevelopment, Andermatt Swiss Alps focused on real estate development and – together with local authorities – planned improvements in water systems, roads and a train station facelift. No extra retail or restaurant facilities were planned at the initial stages although future phases would allow this. Most of the resort was designed to be car-free, facilitated by new underground parking structures.

The Chedi Andermatt Hotel - Copywright GHM/photographer Guntli
One of the major town center improvements was the five-star, deluxe flagship, The Chedi Andermatt Hotel launched in time for the 2013-2014 ski season. Offering private ownership as well as overnight stays in 48 rooms, the high-end hotel combines “traditional region values so uniquely with the vision of a luxury, state-of-the-art holiday destination”. The design motif chosen was ‘Alpine Traditional’ with added luxury details such as soapstone fireplaces, oak parquet flooring, and built-in wine closets. As well as 107 apartments for sale, The Chedi development included 12 penthouses and two suites. Around 10 per cent of units were pre-sold with only 30 per cent left on the market by April 2015. “In time for winter season 2014/15 the condominiums of the first two apartment houses of the new resort were handed over to their owners and put on the rental market,” said Markus Berger, Head of Communications for Andermatt Swiss Alps. “Whenever the owners are not using the condos for themselves, they will be let to vacationers.”

By the following ski season a total of almost 70 apartments would be available to skiers in the new Andermatt resort. Three or four further condo buildings as well as a second hotel were scheduled for completion by 2017, said Berger. “In summer 2016 the brand new championship standard golf course – 18 holes, par 72 – will see its official opening after having been played in two pre-opening seasons by hundreds of enthusiastic golfers,” he added.


Tee 13 at Andermatt's Championship Golf Course - Courtesy of Andermatt Swiss Alps/photographer Mezzanotte
By transforming Andermatt into a highly competitive, all-season destination, Sawiris planned to create a stable, growing local community. “This project brought new life to this place,” confirmed Andermatt Mayor, Roger Nager in an article for the Wall Street Journal in 2013.

Andermatt - Courtesy of Andermatt Swiss Alps

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