1. Environmental
September 30, 2015

Santiago’s new skyscraper, the tallest in Latin America, is an engineering marvel. It’s standing almost empty

By Drew Reed

The skyline of Santiago, the capital of Chile, has always been at a disadvantage: unlike cities such as London, New York, or Chicago, Santiago’s towers have to compete with the significantly taller Andes mountains nearby. But now, the city is closing that height gap a bit by unveiling a new mega office tower.

This tower weighs in with 64 floors, or 300m (984ft) of height, and a remarkably unimaginative name: the Gran Torre Santiago, which literally means the “Great Santiago Tower”.  After opening last month, the tower became the tallest building not only in Chile, but in all of Latin America.

Given the fact that Chile experiences some of the strongest earthquakes on the planet, building such a tower required some serious engineering talent to pull off – something which proved crucial earlier this month, when the city was rattled by a massive 8.3 quake. And from the standpoint of architectural aesthetics, it’s passable – or at least less ugly than many other buildings in town. But from a business perspective, the building has been a dismal failure.

The Gran Torre Santiago got its start back in 2006, the brainchild of the German born, Chile-based CEO of the retail firm Cencosud SA, billionaire Horst Paulmann. Paulmann envisioned the tower as part of a larger complex including a luxury hotel, hospital, and the largest shopping mall in the country, to be dubbed the Costanera Center.

At the time, the project was forecast to cost $400m and to finish in mid 2009. When it broke ground in March 2006, Paulmann declared that it would become “the most imposing architectural and commercial landmark in Santiago, and the entire Southern Hemisphere”.

But not long after construction began, the project hit a snag. The global financial crisis in 2008 left backers nervous, and in January 2009 construction was suspended. After an 11-month hiatus, it resumed again that December, and Michelle Bachelet, the country’s president, oversaw the building’s reopening ceremony. No mention was made of the fact that the complex was already supposed to have been finished by then.

Though this would prove the most significant challenge to the tower’s completion, more setbacks were to come. In 2011, a dispute broke out between Cencosud and the tower’s supplier of glass panels, the Chinese firm Far East Aluminum, over discrepancies in the colour (!) of the glass. The dispute would add significant costs and delay the project by a total of 18 months.

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Construction was also hampered due to complaints by local authorities over inadequate traffic planning. According to Chilean news site El Dinamo, Cencosud never obtained valid permits for its construction, and neglected to take into account the snarls such a large project would create in the Providencia neighbourhood where the building is located.

Nevertheless, construction trudged on, and the complex opened piecemeal. First came the shopping mall, which opened in 2013. Though some consider the mall a success, citing the fact that the retail space of its massive interior is nearly full, others point out that attendance is 33 per cent lower than projected.

But the tower itself, despite ending construction in 2014, never really had an official opening. In June 2015, Santiago’s La Tercera reported that the opening would come within a month, though it wasn’t until 11 August that the building was at least partially rolled out as the observation deck finally opened to the public.

This opening, the first commercial activity to take place in the tower, came nearly 10 years after the project first broke ground. By then, the entire complex had racked up a whopping $1bn in construction costs, more than doubling initial projections. Cencosud blamed this on the addition of the observation deck.

There’s no denying that the observation deck offers great views, at least on days when Santiago’s notorious smog stays under control. (The smog has led some cynical residents to dub the city Santiasco: “Santi-gross”.)

The tower under construction in 2012. Image: AFP/Getty.

But below the observation deck is a different story: the tower’s office space is sitting almost completely empty.

On 5 August, the Wall Street Journal reported that the tower was still completely empty, and the doors to the complex remained locked. According to the report, tenants could not occupy the building due to a lack of permits, which city authorities refused to give the building until it made needed traffic improvements to the surrounding area.

“It isn’t unusual for developers to lock horns with government officials over the impact of real-estate projects on such things as traffic and pollution,” the article remarked. “What is unusual is to wait to thrash out such issues on a high-profile project until it is completed and soaring above the city like a neon white elephant.”

Eventually, the Gran Torre Santiago finally found its first tenant. On 29 August, Chile’s The Clinic magazine reported that the pharmaceutical firm Bayer would be leasing the 22nd floor of the building, and roughly half of the 21st, a total floor space of 2,500m2.

Still, little has been said as to what is to become of the building’s remaining 62.5 floors. The Journal estimates that “it will take at least a year to finish the $60m worth of upgrades necessary to obtain permits to fill the entire tower.”

Despite endless delays and cost overruns, the building has nevertheless stoked the enthusiasm of many residents of Santiago and the rest of Chile. It plays to nationalistic pride, in a country that more often than not lives up to its reputation as a hotbed of conservatism. For this demographic, the tower is a concrete symbol of their vision for the country: a long thin island of free market sophistication amid a sea of South American savagery.

But not everyone shares this view. Some are concerned that the complex’s 5,695 parking spaces will discourage people from taking advantage of connections to the nearby metro line.

Others, like Nicolás Muñoz, a council member for the Providencia municipality of Santiago, feel the tower is an unwelcome addition to the neighbourhood. “We need a stronger commitment to public space, and a respect for the surrounding area,” Muñoz told El Dínamo. “The Costanera Center sucks the juice out of every last square inch of space, with little concern for a vision of shared urban areas.”

And the tower, hit hard by the economic crash of 2008, may yet feel the sting of another economic downturn. As China’s market cools, demand for Chilean copper exports has fallen off sharply. Since Chile’s economy depends heavily on these exports, this has had a direct effect in stifling demand for Santiago office space.

With the current economic slump, and continuing disputes between the tower’s owners and local authorities, it may be another decade before the building fills up.

Despite this uncertainty, at least part of the building has been a success: the observation deck. A favourite of tourists from Brazil, it nonetheless has built a strong following from Santiago locals. An article at Plataforma Urbana describes the scene: a young boy enthusiastically drags his father to the window and points to a building far away, his father nervously clasping his hand. “Look dad,” the boy says, “that’s our house!”

It must not have been very smoggy that day.

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