February 2013
Cover Story
Is Tripoli Ready For A Sea Change?

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What began as a quiet gathering of Tripoli’s biggest businessmen morphed into a grand scheme to revitalize their ailing city, beginning with the waterfront. But the reaction to their plan to save Tripoli probably wasn’t what they were expecting

By Daria El Samad

A project in Tripoli that its backers say could be a turning point in the history of the ancient city has some people wondering whether it’s simply too good to be true. Either way, it may one day be traced back to a momentous dinner at the home of one of its richest citizens.

Early last year, former Prime Minister Fouad Siniora was dining with a group of some of the most powerful businessmen in Tripoli when talk turned to the state of the long-neglected city, lately riven by Syria-linked violence and so impoverished that more than half of its citizens live on less than $4 a day. Siniora, a Sidon native who led Lebanon’s government from 2005 to 2008, challenged the 14 men who collectively own a big chunk of Tripoli to pool their resources and revitalize their city.

The offspring of that perhaps fateful dinner, hosted by APEC gas station owner Abdel Razzak al Hajjeh, became a $200 million project to reclaim land on the western coast of the millennia-old city and turn it into a bustling, beautiful and of course profitable waterfront, creating thousands of jobs and transforming the city in the process. Tripoli has been mostly comatose since the civil war - apart from the violent clashes between supporters and opponents of Bashar Al-Assad that have scarred the region, the main impression left on those who have never visited Lebanon’s second-largest city.

The seafront project - involving the reclamation of 1 million square meters of land to build a marina, residences, hotels and a souk - would be just the beginning. The profits expected to rise from the sea along with the resurrected sand would be plowed back into the city to support hundreds of millions of dollars in investments that would marry deep-pocketed private investors with the government’s purse strings to generate jobs and growth, lure tourists from around the world and help end the fighting - as people with an occupation have one less incentive to pick up a gun. In the words of Samir Chreim, founder of Beirut-based SCAS, the boutique financial consultancy hired to manage the project, the development ’is going to be a landmark’ that ’will help change the image of the city.’

’This is a unique proposition that’s never been done before in Lebanon,’ said Chreim, who holds extensive experience in development work in the GCC. ’What we’re doing is creating a vehicle by which the private sector can lead initiatives.’

But Chreim and the 14 businessmen - most of whom try to keep low profiles, preferring to let Chreim and Tripoli MP Robert Fadel act as the project’s public face - weren’t prepared for the visceral reactions that followed news of the development slowly trickling out over several months late last year beginning with a television news report in August. Environmentalists expressed dismay that the flora and fauna inhabiting the Mediterranean waves off the coast would be irreversibly decimated, good government activists voiced concern about cronyism and a perceived lack of transparency, and many residents simply wondered how something so seemingly good and beneficial could also be true.

The start of an investment that is being promised as a game changer for Tripoli has become clouded by a perceived lack of transparency, the usual Lebanese worries of corruption and the perhaps fantastical notion that they can convince investors to pour tens of millions of dollars into a city that suffers from deep-seated issues that have been difficult to resolve. In a way it boils down to famous lines from ’Field of Dreams,’ the 1989 Kevin Costner fantasy drama film about baseball. ’If you build it, they will come.’

Will they?

’People lost hope in Tripoli,’ said native Shady Hallab, a business consultant at Deloitte Dubai, who is currently living in the emirate. ’Many well-educated people in Tripoli had no future and left to Beirut or abroad in search for other prospects. Eighty percent of projects previously done in Tripoli were to benefit private interest. That’s why we’re skeptical.’

In recent years, the image of Tripoli has been marred by poverty, violence and four decades of state neglect. An October study by the United Nations Economic and Social Commission for Western Asia said 51% of the population lives on less than $4 a day, 73% of families have no medical insurance, and 11% of residents’ livelihoods are subsidized by politicians. The report blames a security situation that has deteriorated drastically since the early 1980s, a weak local economy and changing immigration patterns for Tripoli’s path to political marginalization. The solution, the organization said, is forging an all-inclusive development plan focused on the entire city and backed by a partnership that would include the government, private sector, the municipalities and civil society. Just weeks later, Lebanon’s government seemed to agree on the need for broad-based rebuilding, earmarking $100 million to get things rolling. The men behind the seafront project, however, are devising another path, more focused on private investment, which backers argue will have the best shot of truly revitalizing the city.

Triple City

Tripoli, which received its current name meaning ’three cities’ when the Greeks controlled it in the 14th century, is divided into three areas: the western half that includes the port, the New District and El Mina; the ever-expanding impoverished suburbs to the east that lead into the Cedar Reserves; and the crowded old city at its heart, where the Crusader Castle of St Gilles rests and locals come to buy and sell spices, soaps and other products at the souk. The New District, one of the first areas a traveler from Beirut will see approaching the city, is home to its wealthier residents and most of Tripoli’s government offices, banks and big businesses, while the eastern suburbs that include the neighborhoods of Abou Samra, Qobbah, Jabal Mohsen and Tebbeneh house most of the city’s poor. These neighborhoods, plagued by poverty and unemployment and where a large share of the Syria-linked clashes have occurred, have suffered especially from the state’s neglect.

But the poverty and violence only tells a fraction of the story, according to Mohammed Issa, head of the municipality of El Mina.

’The media gives off the false image that it’s all terrorists and full of people who just want to fight and kill,’ he said in an interview. ’Tripoli is a beautiful city, with problems that are out of its citizens’ control, especially with the ongoing conflict in the tense neighborhoods of Tebbeneh and Jabal Mohsen. It has become a reflection of problems in Lebanon and abroad.’

It All Starts With The Sea

The seafront project is meant to change all that. Not on its own but by helping finance $500 million to $1 billion worth of developments and restorations needed throughout the city, according to Fadel, one of the 14 businessmen behind the plan and chairman of the ABC chain of malls, which got their start in Tripoli in 1972. All of a sudden, Tripoli’s citizens, who have repeatedly complained that their representatives in the government, including eight members of parliament and five ministers who hail from the region including Prime Minister Najib Mikati and his finance minister have done very little to make their lives better, are promised everything all at once.

The 14 businessmen whose dinner together in a way embodied the hopes of residents soon after established Tripoli Development Holding to spearhead their development dreams, seeding the company with $1 million to finance studies of the seafront project and a public relations campaign to gauge public support and convince citizens of its merits - all while asking for nothing in return,
Chreim said.

The holding company tapped Dar Al Handasah, the international leading engineering, architecture and planning firm, to draw up a master plan for the still-vague project, set to be unveiled this month.

Although the exact location is still under study, the project plans to build mostly on land reclaimed from the sea on the partly undeveloped coast that stretches along 7 kilometers from the Army garrison at Olympic Stadium in the south up to the port past the corniche. According to the plan so far, 60% of the reclaimed land will be returned to the state, in the form of roads and infrastructure, with the remainder for the private sector. Once the plan is approved, the company intends to seek out investors in Lebanon to support the project. Part of the plan was to make the investment open to the public to attract as much financial interest as possible while giving locals priority and a feeling of ownership over the development. In terms of return, 60% of the profit would return to the state, with the remainder divided equally between shareholders and an endowment fund that will be set up to reinvest in Tripoli. At the moment, one idea is to borrow about half of the $200 million while raising the rest from investors, who Chreim says could expect to double or triple their money within seven or eight years. ’This is a good return for an investor,’ he said. ’People are excited about it, and $200 million is not a lot of money. It’s not $1 billion.’

The most important part of the plan, particularly for Tripoli residents, Chreim explains, is establishing the endowment fund that will take proceeds from the seafront project and invest in other developments in Tripoli. Chreim insisted the fund, which would be overseen by a reputable board of trustees and run by an unidentified non-governmental organization, would be as transparent and credible as possible. ’I think this is the most transparent and most non-corrupt project in Lebanon,’ he asserts.

’Ideally, it’s to make this project so bulletproof from an investors perspective, so we can at least get the funding to make it happen,’ Chreim said. ’The second part is getting people interested in buying the properties there so we can get the money to return to the investors as well as endowment share.’

In the later stages of selling or developing the land, Chreim explains that it could eventually involve going public in a share offering or bringing in anchor tenants like hotel chains, an outlet mall, coffee shops and restaurants. ’This will attract tourists to Tripoli. If you do something that is a touristic attraction, it’ll get people to Tripoli.’

’Well Known And Trustworthy’

Chreim claims that these 14 businessmen just want to give back, especially as they will have no shares in the project. ’The idea of those people investing ... they can, but none of them has that kind of money to invest $200 million,’ referring to Tripoli’s largest employers.

Besides Fadel, the elite group also includes prominent businessmen who run some of the most successful businesses in the North, in the timber, real estate, sweets making, petroleum and consumer care industries.

Mu’utaz Salloum, a teacher and producer in Tripoli, sees no reason to question the 14 men spearheading the project, describing them as ’well known’ and ’trustworthy.’ ’Why would I be upset if they make money?’ he asks rhetorically. ’What is my problem if they profit, so long as they are creating job opportunities and bringing people in that will pour money into our economy?’

But some contest that, with one local official describing the 14 businessmen as ’powerful, well financed, and politically backed by the state.’

According to Fadi Shayya, a local urbanist, part of the process demands a mechanism for discussion, rather than caving in to power struggles.

’Of course, in the end, it’s a matter of power,’ Shayya said. ’Some people are more powerful than others. That’s only reality. But what I’m saying is that before you just acknowledge that some people are more powerful than others and that’s it, we’ll give up, why don’t these people try to find mechanisms on how to discuss this? Not just to look at it. Even now we’re talking about it like it happened or is going to happen and that it’s good or bad.’

Concerns Surface

Indeed it wasn’t long after news of the mega-project began leaking into television and newspaper reports that Tripoli residents, activists and others began raising concerns, some grounded in facts, others simply based on fears. The initial plan to reclaim land and allocate 40% of it to the members of the Tripoli Development Holding - as earlier reported by various news outlets - prompted the biggest backlash, which spread via social media and newspaper editorials. Activists and others expressed distrust in the men pushing the project as well as fears that they planned to appropriate public land for private gain.

Members of Masha3, a movement aimed at reclaiming public property in Lebanon that includes several Lebanese NGOs, worried that the project would further damage already polluted coastal waters and threaten the cultural heritage of the corniche, seen as one of the few public spaces in Tripoli, where residents can walk along the promenade, fish off the rocky shore or sip coffee in a nearby cafe.

’There is an environmental impact,’ Amer Haddad, president of North Lebanon Environment Protection Committee, explains. ’If there is a study that does not kill the marine life, I have no problem. But I’m sure they will reclaim and just kill everything. We have had experiences in the past.’

Chreim said the endowment fund would be used to restore the seaside, including existing damage from the constant flow of sewage into the waters. ’By default, we need to fix it and clean up this area,’ Chreim says, adding that the project will take up only 300 to 400 meters of the shore. ’We’re doing an offset program that will rebuild the flora that will be destroyed. We’re doing a marine life center on the land to support and sponsor all these issues that we are currently facing.’

When the concerns began to grow early this year, Fadel hoped to tamp down criticism by hosting a public meeting on 17 January at Tripoli University’s graduates club. Facing an audience of citizens and social activists who learned of the meeting only the night before, Fadel described the project in broad outlines, addressed some of their concerns and solicited ideas from those in attendance on other potential development projects in ’phase 2’ of the grand scheme that would be proposed to the government alongside the waterfront plan.

’Some questions might not be answered, because the master plan, the legal structure and the projects are still being studied,’ he said. The lack of detail doesn’t mean the project’s backers are hiding anything, Fadel insisted. The plan simply wasn’t ready to be disclosed, he said, describing the project as having been ’leaked prematurely’ in a late December statement that laid out its key features.

But that statement wasn’t the first news of the project as bits of the plan have been trickling out for months. On 9 August, for example, MTV Lebanon aired a special report about the development, featuring Chreim making the case for the $200 million investment. Footage from the report includes Chreim standing alongside Omar Hallab, CEO of sweets maker Refaat Hallab, and a member of the holding company, on the El Mina coastline and discussing the various benefits of the project, as well as pages of a study done by SCAS that explains bits from a business plan entitled Tripoli Land Reclamation. The reporter on the story informed viewers that the project would be proposed to the government in three months for approval. A month later a local paper added new details, revealing how the land would be used, investment strategies, amenities and the number of jobs expected to be created, as well as identifying the architects and contractors. It wasn’t until the holidays that news finally caught on, prompting the reactions.

It was a surprise for many to learn about the plans for the new waterfront development while ignoring, at least for now, many of the other projects requiring urgent attention or even already started but have since gone nowhere. One such project is the special economic zone that was planned to expand and accommodate a university campus and technological hub, creating more than 10,000 jobs if properly implemented. Another was the rehabilitation of the Rashid Karami Fairground that extends over an area of 1 million square meters and was designed by Brazilian architect Oscar Nieyemar as an exhibition center, but has been abandoned since the civil war and has yet to hold events that could draw international crowds.

Abdel Kader Alameddine, who was mayor of El Mina from 2004 to 2010, believes that investing in these projects and building on the industrial sector would open up endless employment opportunities in a way that would serve Tripolitans’ real needs.

’We should be talking of sustainable employment,’ he said. ’The only way to create jobs that last are through industries, which Tripoli has an abundance of,’ referring to woodwork, soap making and the manufacturing of food products.

That’s not to mention the basic needs of infrastructure maintenance that the city is in dire need of. ’Not even a seventh of what we proposed to the ministry of public works in terms of maintenance of roads was implemented,’ Issa says.

In October, Prime Minister Mikati’s government promised to allocate $100 million for development in Tripoli, but how the funds will be distributed and to which projects has yet to be decided.

The Legal Issue

Questions have also been raised over whether the project even passes legal muster. Alameddine says El Mina developed an urban plan in 2006, when he was the mayor, that prevents land reclamation in the corniche. ’This plan lives for 15 or 20 years, you don’t change it every day,’ he says. Otherwise ’cancel the law, that’s better than having one that is not applied,’ he adds.

Haddad argues the 14 businessmen behind TDH are bound by the law to pay a certain percentage of the value of the land every year in exchange for controlling the property. ’They’ll have to pay at least $40 million per year,’ Haddad calculates. ’Don’t take public property that is mine and yours. This is going above the law.’

Chreim and Fadel dismiss these arguments, claiming they’re acting within the law.

’When we’re ready to announce, and they understand the details of the project, I think we can easily turn them around,’ Chreim told BOLD, referring to those attacking the project. ’The announcement is a month out. How can you announce the project you don’t know the shape of?’

El Mina mayor Issa agrees that things will become clearer when more details emerge, but he criticizes the secretive process and says it must be more transparent and involve the public and government.

’Practically, the issue is still in a give and take phase,’ he said. ’Even though resistance is much more than support. The holding was established, but really, people were not asked. The issue needs to be studied on a state level, not companies that have their own interests.’

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