05 July 2008

An independent spirit

By Eric Jansson
Published by Financial Times,
28 June 2008

What made the Soviet Union fall apart? Some say guns, others butter. Others credit Ronald Reagan, Mikhail Gorbachev or Pope John Paul II. No doubt these all played their parts. But a more rewarding case can be made that it was the little-known Republic of Uzupis that did it in the end.

Like most epic historical claims, the case for Uzupis's role in defeating the Soviet empire is a circuitous one. One should avoid noting, for instance, that this leafy 168-acre neighbourhood in Vilnius possessed neither statehood nor the accoutrements of it in that fateful year, 1991. Likewise, disregard the fact that Uzupis' independence, declared in 1997, remains a source of laughter in the Lithuanian capital today.

Facts do not matter here. The real power of this colourful neighbourhood - which does in fact refer to itself as a republic, Uzupio Respublika - is not rooted in the mock independence it celebrates every year on "Uzupis Day", April 1. Its power derives from a certain spirit of life.

To its residents, Uzupis's independence is really about the independence of the soul. The neighbourhood's president, prime minister and "army" of a dozen men do exist - but only ceremonially. With humour they have succeeded in capturing the gleefully antiauthoritarian community spirit that, once mature in the hearts of millions, can render powerless even a superpower.

In many people's experience, this was the dynamic that shattered Soviet totalitarianism. Today it makes Uzupis one of the most freedom-loving urban quarters anywhere east of the Baltic and west of Vladivostok. It also makes it a magnet for new residents.

"First there were artists. Now you have members of the elite moving in. At the same time you still have junkies and drunks. And then you have the middle class - dentists and so on. Two years ago there was one dental clinic; today there are five or six," says Alistair Day-Stirrat, Lithuania director for Someplace Else, a London-based specialist in emerging property markets.

Like many Vilnius residents who keep an eye on real estate, Day-Stirrat, whose fiancée happens to be an Uzupis dentist, confesses a passion for the neighbourhood. Locals like to describe it - independent, artistic, hilly and heavily in demand - as the budding "Montmartre of Vilnius".

Because Uzupis borders Vilnius's dazzling Old Town and shares some of its architectural heritage, once Lithuania's post-Soviet property renovation and investment boom got rolling in earnest the neighbourhood was sure to change.

The early bohemian invasion of the 1990s gave the area its independence movement and proposed a graceful new aesthetic with installations such as the Uzupis Angel, a winged, horn-blowing figure perched on a plinth who has watched over the neighbourhood since 2001.

Still, vast room for improvement remains and a new wave of wealthy newcomers is moving in to make it happen. On a walk through Uzupis starting at the neighbourhood's main western entrance - a bridge crossing the Vilnele River, complete with welcome sign to "the republic" - one sees evidence of both progress and the work that remains to be done.

Just across the bridge artists' workshops and galleries project their influences on to the street. Local businesses such as the café, tattooist and hairdresser advertise their community spirit by displaying the ubiquitous "UZ" sticker along with the republican symbol; a hand with a circle in the palm that recalls the ancient talisman for warding off the "evil eye".

Up cobbled Uzupio Street renovation has reached almost all the buildings, with fresh facades slapped on to pre-modern townhouses and double-glazing almost everywhere. Yet poke into the odd courtyard or down a side street and one comes across scenes of dilapidation - crumbling facades, broken sheds and rotting boards.

In a neighbourhood that has a bit of money, as Uzupis now does, the kind of structural deterioration seen here lends it character. But eventually it needs cleaning up, too. This would be happening faster if Uzupis's history were different, says Augustas Jagusinskis, a valuer for Centro Kubas, one of Vilnius's leading estate agencies.

"In Soviet times Uzupis was a very unprestigious area. The situation had to change and the market is doing its job. The main problem with the speed of development now is old residents. Either they don't want to sell or they ask millions for a house with just three or four apartments in it. They are just sitting on barrels full of money," says Jagusinskis.

The way in for wealthy newcomers is often by purchasing flats in brand new apartment buildings rather than buying them to renovate individually. Developers seize on every opportunity to purchase several neighbouring plots at a time and then build. Strong demand ensures that although Lithuania's property boom began topping out in late 2007, in early 2008 developers were still selling flats before building them.

Most developments of this kind have sprung up lately in the eastern half of the area. A hodgepodge of wooden houses in varied states of repair interspersed by sleekly modern townhouses and garden plots, this part of the neighbourhood lies between the steep slopes of Gediminas' Grave park (Gediminas was a reputed founder of Vilnius) and the small, half-idle industrial block on Polocko Street.

At the height of Lithuania's property boom, during the past three years, people who bought houses and flats here count themselves lucky. Gerardas Jurkonis, an economist who purchased a fourth-floor open-plan flat in a new project, says that between the time he bought it for 5,000 litas (€1,400) per sq metre and the moment he was given the key, its market value had more than doubled. "I would still advise others to buy here, even though the boom is over. Prices may go down in the suburbs, especially for Soviet-built apartments, but not here or in the Old Town," he says.

He praises Uzupis as a place for families that, in spite of its appearance as a quiet community, is central and well connected to the rest of the city by transport links. The greatest of these is busy Olandu Street, which runs along the neighbourhood's eastern edge. Patches of forest prevent the traffic from disturbing the community.

The area's largest new residential development, Kriviu Namai, scheduled for completion this summer, rises near the eastern border, on Kriviu Street. Built by YIT Bustas, a Lithuanian subsidiary of the Finnish construction company YIT Group, its 23 flats are expected to be sold out before landscaping on the grounds is finished in August, says Tomas Jarasunas, site project manager.

Technically, this marks a slowdown. YIT Bustas' previous project in Uzupis, 36 flats also on Kriviu Street, sold out in just six months, well before construction work was finished. Kriviu Namai is selling well but more slowly and more expensively at prices from 8,000 litas to 1,500 litas per sq meter.

Catching the jitters in a slowing market, YIT Bustas recently halted work on several projects. But Jarasunas says it is important to keep pressing forward.

One potential risk stemming from Uzupis's emergence as upscale residential district is wholesale gentrification. It still feels a long way away from its first chain café but prices in the area of Uzupis nearest the river and Old Town are already nearing parity with Vilnius's historic centre.

"What costs 7,800 litas here might cost 8,000 litas in the Old Town; not a big difference," says Kristina Leknickaite, Lithuanian commercial director for Arco Real Estate.

Few new bohemians will be moving in under these conditions. On the other hand, moving from the area Leknickaite describes to eastern areas of Uzupis, prices typically fall by about 40 per cent.

The party is not over yet.

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