Merging with tradition

A rigorous approval process and construction above a Metro station did not deter the Building Team for this mixed-use project
August 11, 2010

One of the first modern mixed-use buildings in the tradition-rich city of Prague, Czech Republic (population 1.2 million), now faces Charles Square, the largest public space in the central city.

Charles Square Center incorporates 165,000 sq. ft. of office space and 25,000 sq. ft. of retail. The office floors are designed to provide tenants with "American style" Class A space. Raised floors and advanced M/E/P systems are incorporated to provide adaptability for future technology. Completed in September 2002, the building is now 82% occupied.

The development traces its origins to Chicago, where both its design architect, Lohan Caprile Goettsch (LCG), and its developer, Golub, are based. Golub developed Charles Square Center through its affiliate, GE Capital Golub Europe L.L.C., which was created in 1996 when GE Capital affiliated with Golub. It is LCG's first completed European project.

A two-phased approval process, which took about five years, was the project's biggest hurdle. Each phase mandated 45 signoffs representing various city departments, according to James Goettsch, design principal with LCG. The city required a design competition in which LCG and four other firms (all based in the Czech Republic) produced proposals that were judged to incorporate "notable characteristics." LCG's concept was deemed the most adaptable to Golub's objectives for the building. LCG worked in association with SIAL, the building's Prague-based architect of record. Metro Stav, also of Prague, was the general contractor.

Public scrutiny of the project was heightened by the historic significance of the site. It once contained a three-story building that had been destroyed during World War II and was one of the city's few such vacant sites that had not been rebuilt. "The city is extremely conscious of its historic significance," Goettsch says. "When you have an area with additional significance, it only heightens this awareness."

History-related constraints weren't the only obstacles the project team faced. The building was constructed above a below-grade Metro station, notes Steve Nilles, technical principal with LCG. "From the standpoint of technical complexity, that was a real challenge," he says. For example, several building columns extend into the station's pedestrian concourse.

In order to keep the project within budget, lower-cost components produced in the Czech Republic were used whenever possible. The focus on native-origin materials was more extensive than he has encountered working on projects in Western Europe, Nilles says. This necessitated a close evaluation of locally produced materials to make sure they provided the desired quality level. "At the end of the day, I think things worked out pretty well," he adds.

Kenneth Munkacy, managing director of GE Capital Golub Europe L.L.P, concurs that the adjacency of the rail station generated the project's most problematic and time- and cost-consuming issues. He says this was due partly to the subway system's rigorous engineering standards. Golub was required to pay for $2 million of improvements to the station. While this increased development costs, adjacency to the station enables Golub to offer its tenants a steady stream of potential customers. The station is used daily by 50,000 individuals.

A new prototype

Charles Square Center is a new prototype for Prague, which does not have much mixed-use development, according to Munkacy. It is positioned as an international Class A office/retail building. Golub's objective is to maximize the value of the property by attracting tenants with international credit. Office tenants include Philip Morris and Ernst & Young.

Munkacy says the Czech Republic has evolved as a regional headquarters for European Union and international companies. Its competitiveness compared to other EU countries is enhanced because it offers business costs that are significantly lower than those in Germany or France.

Other GE Capital Golub Europe developments include the completed first phase of the International Business Center in Warsaw.

Uncertainties surrounding developments in Iraq notwithstanding, Munkacy envisions a continuing good leasing demand for Charles Square Center. He says Charles Square Center, in addition to providing its neighborhood with "a festive environment as well as a great office address," has spurred the renovation of nearby buildings. He believes it is an example of "the power of quality urban design and development."