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ARCHITECTURE

Whatever happened to Spain’s building bonanza fails?

There's Benidorm's biggest eyesore, Seville's €86 million mushroom parasol and a handful of ghost airports with no passengers. But a decade after Spain’s building bubble burst, are these embarrassing white elephants still standing?

Published: 24 November 2020 18:27 CET
Updated: 29 November 2020 15:22 CET
Whatever happened to Spain's building bonanza fails?
Benidorm's InTempo skyscraper has managed to bounce back. Photos: AFP

A decade ago, when “corrupción” and “la crisis” were buzzwords rather than “coronavirus”, Spanish society was reeling from the sheer amount of wasteful public spending across the country, epitomised most poignantly by a wide range of building fails.

Since the 90s, regional politicians had been splurging millions on unnecessary megaprojects with budgets from Spain’s central government and Europe, all without having to be accountable when the river ran dry or things went wrong.

In 2013, in the early days of The Local Spain, we ran an article on these bankrupting building fails that went viral with over a million views, after getting picked up by Menéame (the Spanish version of Reddit).

Seven years on we’ve decided to revisit these white elephants to see if the projects were ever completed or if they’ve just been standing there ever since, gathering dust.

Nou Mestalla (Valencia)

Valencia CF’s ‘new’ 54,000 seater stadium only got as far being a basic concrete skeleton, after construction work was halted in 2009.

Turns out that a €344 million budget proved a bit too much for a club which was already €547 million in debt.

Eleven years on, ‘Los Ché’ are still playing in the old Mestalla, still having financial problems and their new owner Singaporean businessman Peter Lim doesn’t seem too keen on paying the reduced price of €60 million to finish a no-frills version of the stadium.

Valencia’s city council has now given Valencia CF until May to resume construction or they’ll tear up their building licence.

Photo: Zarateman/Wikipedia

City of Culture of Galicia (Santiago de Compostela)

The cost for this overly ambitious megaproject that can be seen from space stands at €300 million, with US architect Peter Eisenman famously saying he didn't realise just how big his chef d’oeuvre would turn out to be.

Costly materials, flamboyant buildings and dwindling visitor numbers forced the Galician government to put the 15-year-old unfinished project on hold in March 2013.

And not much has changed since; it remains half-open and half-finished, without really serving a clear purpose (although in 2017 Galicia’s president decided a further €17 million would be spent to add an extra building for the City of Culture to house a university faculty.)

One visitor described it on Google as “Definitely a must visit for those interested in architecture and what happens when dreams and ambitions collide with reality. Virtually impossible to photograph due to its size. Unless travelling by car it is also surprisingly hard to visit. Good carparking and facilities plus some of the best views over Santiago”.

Photo: Santiago Lopez Pastor/Flickr

Metropol Parasol (Seville)

The creators of these impressive mushroom-shaped parasols, situated in the old quarter of the Andalusian capital, claim it is the biggest wooden structure in the world.

It took six years to complete and was €36 million over budget (€86 million total).

But Incarnation's mushrooms (Las Setas de la Encarnación), as this shade-giving structure is popularly known, has required constant upkeep ever since, as Seville’s extreme temperature changes lead the wood to contract and dilate, in turn causing the nuts and bolts to loosen. Yikes!

Photo: Monezimone/Pixabay

Ciudad Real airport

Ciudad Real’s is one of several airports across Spain that didn’t really, well, take off.

It cost a billion to build but was sold at auction for a tenth of the price in 2013. Before this it had been operational for three years but not generated anywhere near the 2.5 million annual passengers it promised.

In 2019 it reopened and welcomed its first plane in years…an empty one.

The latest news is that it’s being used as a parking lot for grounded planes. Believe it or not there are plans to expand the airport further, presumably to fit in more idle jets.

Photo: AFP

InTempo skyscraper (Benidorm)

If there’s a white elephant on this list that’s managed to turn things around, it’s this 52-storey skyscraper in tourist hotspot Benidorm.

It’s been plagued by accidents, hold ups and financial problems since the project began in 2005, with rumours at one point that it was missing an elevator shaft (they turned out to be false).

However, after being rescued by Spain’s bad bank Sareb for €67 million and bought by a new owner which has completely refurbished the 193-metre skyscraper, flats in Europe’s tallest residential building are now being sold for up to €1 million.

 
Creative Arts Centre (Alcorcón)

Back in 2008, the mayor of this dormitory town on the outskirts of Madrid thought it best to fight the imminent crisis with the building of a Guggenheim-style cultural centre for its 165,000 residents.

Twelve years on, CREAA (Centro de Artes de Alcorcón) is only 69 percent complete and 40 percent over budget.

Critics appropriately named it “Alcorcon's circus”, as the project actually includes a “circo” in honour of the then mayor's father, a professional clown.

Alcorcón's city hall is now looking for a buyer willing to pay the extra €40 million towards the €100 million that CREAA has already cost.

Photo: Zarateman/Wikipedia

Line 9 of Barcelona's Metro

The most expensive building project in Catalan history at an astronomical €16 billion (projected) has more metro stations open to the public than it did in 2013 – 24 compared to 11 – but is still not completed after 17 years of work.

Needless to say it’s been marred by delays, building problems and hundreds of complaints from Barcelona residents who have grown tired of the lingering construction work.

The forecast is that it could take another 24 years for its 47-kilometre-long track to be fully operational, which, if no other city beats Barcelona to it, will make it the longest automatic metro line in Europe.

Photo: Agm/Wikipedia

City of Arts and Sciences (Valencia)

It was perhaps unfair to feature Valencia's top tourist spot on this list, but at the time many locals were still up in arms about the final cost of €1 billion (more than three times over the original budget) for this unearthly megaproject by Spanish super-architect Santiago Calatrava.

“It is true that the City of Arts and Sciences has received local critics, mainly promoted a local political party stating that the project costed much more than originally planned but it has to be noted that the final project built included more elements commissioned by the local government and was therefore not comparable with the original design,” an explanation given to The Local by email from the office of Santiago Calatrava LLC in Zurich.

But the la Ciudad de las Artes y las Ciencias complex that proved hugely controversial at the time has become a well-loved landmark and one of the most visited tourist sites in Spain. It now generates about €130 million a year and supports around 3,500 local jobs.

It's certainly a sight to behold, but boy was it expensive.

Photo: Papagnoc/Pixabay

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MONEY

Rampant branch closures and job cuts help Spain’s banks post huge earnings

Spain’s biggest banks this week reported huge profits in 2021 and cheered their return to recovery post-Covid, but ruthless cost-cutting in the form of thousands of layoffs, hundreds of branch closures and the removal of many ATMs have left customers in Spain suffering, in this latest example of ‘Capitalismo 2.0’. 

Published: 3 February 2022 13:34 CET
A man withdraws cash from a Santander branch in Madrid.
More than 3,500 Santander workers lost their jobs in Spain in 2021 and a further 2,000 more employees working for Santander across Europe were also laid off. Photo: PHILIPPE DESMAZES / AFP

Spanish banking giant Santander on Wednesday said it has bounced back from the pandemic as it returned to profit last year, beating analyst expectations and exceeding its pre-COVID earnings.

Likewise, Spain’s second-largest bank BBVA said on Thursday that it saw a strong rebound in 2021 following the Covid crisis, tripling its net profits thanks to a recovery in business activity.

It’s a similar story for Unicaja (€137 million profit in 2021), Caixabank (€5.2 billion profit thanks to merge with Bankia), Sabadell (€530 million profit last year), Abanca (€323 million profit) and all of Spain’s other main banks.

This may be promising news for Spain’s banking sector, but their profits have come at a cost for many of their employees and customers. 

In 2021, 19,000 bank employees lost their jobs, almost all through state-approved ERE layoffs, meant for companies struggling financially.

BBVA employees protest against layoffs in May 2021 in Madrid. Spain’s second-largest bank BBVA is looking to shed 3,800 jobs, affecting 16 percent of its staff, in a move denounced by unions as “scandalous”. (Photo by GABRIEL BOUYS / AFP)

Around 11 percent of bank branches in Spain have also been closed down in 2021 as part of Spanish banks’ attempts to cut costs, even though they’ve agreed to pay just under €5 billion in compensation.

Rampant branch closures have in turn resulted in 2,200 ATMs being removed since the Covid-19 pandemic began, even though the use of cajeros automáticos went up by 20 percent in 2021.

There are now 48,300 ATMs in Spain, levels not seen since 2001.

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Apart from losses caused by the coronavirus crisis, Spain’s financial institutions have justified the lay-offs, branch closures and ATM removals under the premise that there was already a shift to online banking taking place among customers. 

But the problem has been around for longer in a country with stark population differences between the cities and so-called ‘Empty Spain’, with rural communities and elderly people bearing the brunt of it. 

 

Caixabank laid off almost 6,500 workers in the first sixth months of 2021. Photo: ANDER GILLENEA/AFP

Just this month, a 78-year-old Valencian man has than collected 400,000+ signatures in an online petition calling for Spanish banks to offer face-to-face customer service that’s “humane” to elderly people, spurring the Bank of Spain and even Spain’s Prime Minister Pedro Sánchez to publicly say they would address the problem.

READ MORE: ‘I’m old, not stupid’ – How one Spanish senior is demanding face-to-face bank service

It’s worth noting that between 2008 and 2019, Spain had the highest number of branch closures and bank job cuts in Europe, with 48 percent of its branches shuttered compared with a bloc-wide average of 31 percent.

Below is more detailed information on how Santander and BBVA, Spain’s two biggest banks, have reported their huge profits in 2021.

Santander

Driven by a strong performance in the United States and Britain, the bank booked a net profit of €8.1 billion in 2021, close to a 12-year high. 

It was a huge improvement from 2020 when the pandemic hit and the bank suffered a net loss of €8.7 billion after it was forced to write down the value of several of its branches, particularly in the UK. It was also higher than 2019, when the bank posted a net profit of €6.5 billion.

Analysts from FactSet were expecting profits of €7.9 billion. 

“Our 2021 results demonstrate once again the value of our scale and presence across both developed and developing markets, with attributable profit 25 per cent higher than pre-COVID levels in 2019,” said chief executive Ana Botin in a statement.

Net banking income, the equivalent to turnover, also increased, reaching €33.4 billion, compared to €31.9 billion in 2020. This dynamic was made possible by a strong increase in customer numbers, with the group now counting almost 153 million customers worldwide. 

“We have added five million new customers in the last 12 months alone,” said Botin.

Santander performed particularly well in Europe and North America, with profits doubling in constant euros compared to 2020. In the UK, where Santander has a strong presence, current profit even “quadrupled” over the same period to €1.6 billion.

Last year’s net loss was the first in Banco Santander’s history, after having to revise downwards the value of several of its subsidiaries, notably in the UK, because of COVID.

The banking giant, which cut nearly 3,500 jobs at the end of 2020, in September announced an interim shareholder payout of €1.7 billion for its 2021 results. “In the coming weeks, we will announce additional compensation linked to the 2021 results,” it said.

BBVA

The group, which mainly operates in Spain but also in Latin America, Mexico and Turkey, posted profits of €4.65 billion ($5.25 billion), up from €1.3 billion a year earlier.

The result, which followed a solid fourth quarter with profits of €1.34 billion, was higher than expected, with FactSet analysts expecting a figure of €4.32 billion .

Excluding non-recurring items, such as the outcome of a restructuring plan launched last year, it generated profits of 5.07 billion euros in what was the highest figure “in 10 years”, the bank said in a statement.

In 2020, the Spanish bank saw its net profit tumble 63 percent as a result of asset depreciation and provisions taken against an increase in bad loans due to the economic fallout of the virus crisis.

“The economic recovery over the past year has brought with it a marked upturn in banking activity, mainly in the loan portfolio,” the bank explained, pointing to a reduction of the provisions put in place because of Covid.

In 2021, BBVA added a “record” 8.7 million new customers, largely due to the growth of its online activities. It now has 81.7 million customers worldwide.

The group’s net interest margins also rose 6.1 percent year-on-year to €14.7 billion, said the bank, which is undergoing a cost-cutting drive.

So far, it has axed 2,935 jobs and closed down 480 branches as the banking sector undergoes increasing digitalisation and fewer and fewer transactions are carried out over the counter.

At the end of 2020, BBVA sold its US unit to PNC Financial Services for nearly 10 billion euros and decided to reinvest some of the funds in the Turkish market.

In November, it launched a bid to take full control of its Turkish lending subsidiary Garanti, offering €2.25 billion ($2.6 billion) to buy the 50.15 percent stake it does not yet own.

The deal should be finalised in the first quarter of 2022.

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