A decision this week from archaeologists on the Hellinikon project in southern Athens has cast the spotlight on the urban development plan but why is it such a big deal? Why is it at the center of political debate? A closer look at the investment shows why it's crucial to Greece's economy recovery and even the future of prime minister Alexis Tsipras.
The 8 billion euro project, located in a suburb called Hellinikon, aims at turning the former Athens international airport into one of Europe's largest urban development projects.
After the airport was shut down in 2001, the beachside site has been been idly sitting there as Greece's debt problems grew and the country was cast into economic turmoil. Apart from a small part of it being used as an exhibition center and to accommodate refugees, the rest of it has been crumbling away in a stark reminder of Greece's poor track record in managing facilities (see 2004 Olympic Games venues) .
The project is one of the few large scale investments Greece has managed to attract under the ruling left wing government that promised to turnaround the economy when first elected in January 2015. Tsipras has promised to see through the Hellenikon deal and overcome opposition from a small faction of his own Syriza party. A failure to do so would not only be embarrassing for Tsipras but costly, since the vast majority of Greeks want to see this project completed, surveys show.
The figures on the development are impressive for any small country, particularly one whose economy has shrunk by more than 20% since 2010.
Numbers to chew on
Forecast to attract at least 1 million new tourists per year
Contribute 2.4% to the country’s gross domestic product
Create 75,000 new jobs
Build a national park 1.4 time the size of London's Hyde Park
30% of net profit returned to the state over the 99 year term of the deal
(Source: Lamda Development, IOBE)
What goes well beyond the data is the impact the project will have on business sentiment in Greece. A project of this magnitude would send a signal that Greece is open for business after an eight year downturn that drove away foreign capital.
It is also seen adding shine to Greece's real estate sector and the Athens Riviera, a name attached to the southern Athens coastline running from Piraeus to Sounio. The investors seeking to transform Hellinikon are led by Lamda Development, a member of the Latsis group, along with China's Fosun and Abu Dhabi's Eagle Hills. A successful outcome is likely to prompt an inflow of additional capital into nearby property from these two parts of the world.
"Due to the participation of Fosun and Eagle Hills, the project will help draw Chinese and Arab property investors to the whole area stretching along the Athens Riviera," said George Elias Eliades, managing partner of Algean Property.
Where to from here?
After months of delays, Greece's archaeologists finally made a decision on Hellenikon earlier this week ruling that 280 acres of the total 6,200 acres are of archaelogical importance and cannot be built upon. Lamda Development and co. will probably take this ruling into consideration and push ahead with the project. But there is no need for any bulldozers, just yet.
Opponents to the deal are likely to take the matter to the Council of State, Greece's highest administrative court, on the grounds that archaeological laws are being breached. This, some experts say, will require at least another 6 to 9 months to be sorted out, assuming that no further legal appeals are submitted.