Mon December 27, 2010
Planet Money

What David Beckham Has To Do With Spain's Boom And Bust

You can see them from 30 miles away in any direction: four shiny new skyscrapers that tower over Madrid.

“It’s like some aliens have landed at one of the ends of the city,” says Patricia Gosalvez, a Spanish architecture critic.

Those aliens say a lot -- about the fates of David Beckham and other big soccer stars, about Spain’s economic boom, and about the real estate bust that could lead to the European Union’s biggest bailout yet.

Less than 10 years ago, soccer fields covered the spot where the towers now stand.  Madrid’s soccer team, Real Madrid, practiced there.  In 2001, as Spain’s real estate boom took off, the team’s owners did something people all over Spain would do in the coming years: They sold their land for a ton of money.

They got 480 million euros -- more than half a billion dollars at today’s exchange rates. It was enough money to pay off all of their debts. And over the next few years, Real Madrid bought Beckham and three other soccer superstars.

Two construction companies, an insurance company and a savings bank built the four towers. The companies were flush from the boom, and each building seemed more glitzy than the next. One had this panoramic glass elevator, supposedly the fastest in Spain. Another installed a two-story restaurant in the sky. The third had a garden in the sky, with more than 20,000 plants. The fourth went with a chapel -- the highest in Spain.

There was a rumor that the towers might be named after the soccer superstars the team bought with their real estate windfall. It never happened.

By the time the last of the towers was completed in 2009, it was clear that the boom was over. People were not renting office space.  Unemployment went up to 20 percent.  Construction companies went going bankrupt.

The four towers are currently 75 percent unoccupied.

“They are a metaphor of the boom, and how big we thought, and how little we achieved through it,” Gosalvez says.

You can add these four buildings – or at least 75 percent of them -- to the one million vacant properties in Spain.  In the next year, more will be added to that. If things get much worse, Spain may need a bailout, which could cause economic trouble for all of Europe. Copyright 2011 National Public Radio. To see more, visit http://www.npr.org/.