Brazil slump risks leaving taxpayers with Olympic real estate bill
By Stephen Eisenhammer
RIO DE JANEIRO, Sept 30 (Reuters) - The highway has been torn down, tunnels dug, and the walkways and gardens laid in Rio de Janeiro's new business district.
But the dozens of office towers needed to make the 8 billion real ($2 billion) renovation viable are missing.
The transformation of a derelict port district before the 2016 Olympic Games is a flagship development that wasn't supposed to cost Brazilian taxpayers a thing.
Less than a year before the Olympics, however, a real-estate meltdown in Rio has killed appetite for new skyscrapers and left a public fund - which paid upfront for infrastructure betting it could profit by selling building rights - shouldering the burden of the 8 billion real cost.
Of over 20 corporate developments planned, many with multiple towers, the vast majority have not broken ground.
They include the Trump Towers, a set of five high-rises gilded by a branding agreement with U.S. property mogul and presidential candidate Donald Trump. That project was announced in 2012 as the largest corporate development in any major emerging nation, but it too is still on the drawing board.
The few high-rises that are taking shape are spread thinly across the 3-km stretch of waterfront. When, or if, the others will be built is increasingly uncertain.
"The reality is worse than we imagined," says Vitor Hugo Pinto, manager of the port fund for the FGTS, a massive public investment vehicle financed by payroll deductions and managed by Caixa Economica Federal, one of Brazil's big state-owned banks. Continuación...