Gold elephant?

Bundesbank hits a snag in headquarters revamp

Jens Weidmann
Monetary policy? Sure! Renovating a building? What? Source: DPA

One might have thought that the biggest headache for Jens Weidmann, president of Germany’s central bank, was to keep his colleagues at the European Central Bank on the straight and narrow monetary policy path mapped out by his predecessors at the Bundesbank. Or perhaps how to position himself as the successor to ECB President Mario Draghi without seeming too pushy.

But right now, Mr. Weidmann’s biggest problem may be keeping the Bundesbank’s ambitious “campus project”, which will modernize and expand its headquarters, from turning into a logistical nightmare.

The project entails the biggest relocation of personnel in Frankfurt since the end of World War II, just as Germany’s financial capital faces an influx of thousands of workers dislocated from London by Brexit. On top of everything else – or actually, underneath everything else – are the vaults housing the world’s second-largest reserves of gold, some 1,700 tons of very heavy metal.

Auf Wiedersehen to project director

Handelsblatt has learned that the project is facing several unexpected difficulties and potential delays. For one thing, the central bank has just let go the director of the project, Lutz Peters, because it turns out the development adviser for the Munich airport was not a good fit for a huge construction project under government auspices. Germany’s central bank confirmed that it and Mr. Peters had agreed to end their relationship.

But it means that the bank must now start more or less from scratch to plan and design the project, putting out the myriad components to bid, and getting the requisite building permits.

Last November, the bank announced it had leased office space in central Frankfurt for the 2,000 employees who have to be relocated during the construction phase, which optimistically will last some seven years. But even that space, in the Frankfurter Büro Center skyscraper downtown, needs considerable renovation before the Bundesbankers can move in. And now it may be much longer than seven years before the revamp is completed.

The Bundesbank wouldn’t comment on whether or not there will be delays in the project but the landlord of their new quarters confirmed that it will be available as agreed and ready for the Bundesbank to move in – he refused to give further details.

The current headquarters on the outskirts of Frankfurt was built at the end of the 1960s in the Brutalist style. It is not to everyone’s taste but the massive use of concrete portrayed the solidity the guardian of the deutsche mark wanted to convey. But, typical for the period, the central bank headquarters was built with numerous materials now deemed harmful. The façade will be preserved but the 13-story building will be completely gutted and rebuilt.

There’s gold in them thar vaults

In addition, the Bundesbank will build other facilities on the existing grounds to bring another 1,600 staffers currently spread around Frankfurt to the same campus. The suggestion that these might include a skyscraper to rival the ECB’s twin towers drew immediate opposition from the city, which will now take part in the concept competition.

As for all that gold, it will stay where it is during construction, heavily guarded by federal police. Not only security but the sheer physical requirements for storing the gold underground make it impractical to relocate.

The Bundesbank hasn’t specified a budget for the campus project – money is not really its concern – and remains vague about the deadline. It has an option to extend the lease on the temporary premises for three years. Johannes Beermann, the executive board member heading up the project, said last year it would be done by 2027 – “if we are lucky.”

Jan Mallien covers monetary policy for Handelsblatt. Darrell Delamaide adapted this article into English for Handelsblatt Global. To contact the author: mallien@handelsblatt.com

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