City of Gold: Dubai and the Dream of Capitalism (26 page)

Bin Sulayem found himself at a disadvantage. Although he had models of the island and architects’ renderings of the homes he was selling, he couldn’t drive investors to see the land, so they could get an idea of the positioning of the homes and streets. There was no land. The site was open sea.

But bin Sulayem wasn’t going to let that get in his way. When a potential buyer turned up, bin Sulayem, an elegant man with a perfectly clipped mustache and an ingrained politeness, fired up his speedboat. He’d zoom investors a mile and a half out to sea, where the sail-shaped Burj Al Arab could be seen above the swells. Then he’d cut the motor.

“This is where your villa’s going to be,” bin Sulayem would tell his client, as they bobbed in the Gulf. “Now give me a deposit.”
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When it came to marketing, Dubai cast off its inhibitions. Its marketers convinced the English soccer team to stop in Dubai on its way to the World Cup in South Korea. The British tabloids screamed. How could Dubai real estate trump the World Cup? With the players in their clutches, Dubai’s salesmen went to work. “Somebody took David Beckham and said, ‘You know what? We would like to give you the most expensive house on the Palm. You’ll have your own beach,’” says government adviser Yasar Jarrar. “Based on the fact that David Beckham had a house, all of the English football team bought. And his wife, Victoria Beckham, she also came. Dubai and the Palm were on the front page of all the British newspapers all week. You cannot buy that kind of advertising. The Palm was sold out in three days.”

Beckham wasn’t the only one who made out. Sheikh Mohammed underpriced everything, figuring that a fast sell-out would further Dubai’s
long-term goals, even if it cut profits. He wasn’t building the island for the sake of having an island. It was a cog in the plan to make Dubai a great city. Bin Sulayem banked the deposits and used them to fund construction. Over the coming months and years, speculators bought and resold villas over and over, driving prices through the roof while the home sites were still open sea. “They sold it cheap and people made fortunes,” says Ryan Mahoney of Better Homes. “It created excitement and hype overnight. ‘Dubai is where you can make your fortune!’”

At that time, the Palm’s initial 2,000 mansions were selling for around $1.3 million. It was a decent price for a brand-new six-bedroom villa with a pool. The best thing was, every single one of them would sit right on the beach. You could slide open the back door and plunge into the warm sea before your morning coffee. At their peak valuations in late 2008 those villas sold for as much as $9.5 million.

In fact, just about
all
the buildings on the Palm sit on the beach. It was Dubai at its most cunning. Since seafront properties are the most valuable, why not build a development that has nothing but seafront?

You couldn’t build a palm-shaped island from sand in most places. If currents are too strong or the sea too deep, it wouldn’t work. But conditions in the Gulf are perfect. Gulf tides are mild, as are the currents. There are few storms. The sea deepens gradually. At the Palm’s furthest end, three and a half miles out to sea, the water is just thirty feet deep. The sea floor is a mirror image of the land: gently undulating and pale sand. “That made it very easy to pick up the sand and redistribute it,” says Lee. “It’s like sand play. You scoop the sand and put it in the middle. Voilà.”

Nakheel’s executives like to say the sea was devoid of creatures as well. “There was absolutely no sea life whatsoever,” Lee says. That may be true now, but it wasn’t at the start of construction. The sea bottom had grasses and algae and crabs, worms, oysters, and fish. The organisms that didn’t flee got dredged up and buried.

Unlike Dubai Internet City, the Palm Jumeirah was far too outlandish to attract financing from a bank. Dubai had to pay up front, using investors’ cash. The dredging costs alone were $275 million, a huge outlay, but a good price given the scope of the work. Ships with giant hoses sucked up the sandy seabed and sprayed it in brown rainbows onto the rising island.

Niggling construction delays plagued the Palm. Nakheel promised villa buyers that they’d get their mansions in 2005, an unrealistic deadline
given that no one in Dubai, or the world for that matter, had ever reclaimed a palm-shaped island. Buyers got their keys two years later. Many of the island’s amenities won’t be finished for years. The centerpiece, the gigantic pink 1,539-room Atlantis resort, opened in September 2008.

One problem that cropped up was that the new land settled and sank. It caused a year’s delay. The company wound up hiring a contractor to use a new technique called vibro-compacting to tamp down the land.

Several workers died building the Palm islands. Once, a group of them were swept out to sea and lost when a big swell crashed over the crescent. Another time, bin Sulayem himself had a close call. One night he was inspecting progress when his boat ran aground. The land buildup had progressed further than he’d realized. He only just managed to get unstuck before the very place he was mired was inundated by umpteen tons of sand from the sea bottom, hurled through the air by a dredging ship. Bin Sulayem and his boat could have been buried on the island without anyone seeing him again.
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The accomplishment of bin Sulayem and Sheikh Mohammed is undeniable. They created an asset worth around $25 billion by piling rocks and sand on the sea floor. But the Palm is more than an asset. It’s Dubai’s newest neighborhood, with thousands of residents and owners from seventy-five different countries. Those who bought mansions in 2001 may have grumbled a bit about delays, and about the jamming of these homes a lot closer in reality than they appeared on sales brochures. But most were assuaged by the quintupling of values. They were among the hottest properties in the city until values, like those across Dubai, started to slip in 2009. They cause endless consternation for those who had the means to buy one at launch but they were too scared. “I wish I’d had the balls and the pocket to have gotten in on the beginning at the Palm,” says Anthony Harris, the former British ambassador.

Driving onto the Palm is a curious experience. There is no sea view. The reclaimed land is so valuable that every inch is built upon. A broad highway lined with apartment towers bisects the Palm’s trunk. The island’s residential fronds—each one lined by blocky mansions with red-tiled roofs—spread out on either side. Each frond is a separate gated community. At the treetop, the road dives into a tunnel and emerges on the outer crescent, where most of the hotels are rising. Two
dozen five-star hotels are under contract or under construction on the island, among a total of thirty-two planned. Dubai will have fourteen thousand additional hotel rooms when the construction finishes by 2013.

Donald Trump was erecting his latest hotel on the stem, a sixty-one-story horseshoe in steel and glass. Trump said Gotham City would never countenance such a structure. “New York is at a huge disadvantage to Dubai,” he told the
New York Post
. “If this project were ever proposed for New York, it would be a ten-year review process at the end of which you’d receive a ‘No’ vote by the community board for being too high, too dramatic, too beautiful or whatever.” In this case, Trump’s No vote came from the global financial meltdown, which caused him to halt construction in late 2008.

To give an idea of the magnitude of the Palm Jumeirah, compare it with the $8.6 billion CityCenter Las Vegas project, the largest privately funded development in America. CityCenter is seventy-six acres of casinos, hotels, and condominiums. It would sit nicely in one little corner of the Palm. Anyhow, Dubai’s got a piece of that action. Nakheel’s parent company, Dubai World, has partnered with MGM Mirage to develop CityCenter. The partnership makes Dubai’s government a major investor in the gambling industry, which, depending on your view, either showcases Dubai’s tolerance and pragmatism, or runs counter to its citizens’ Muslim sensibilities.

Of course, Dubai is as satisfied with one palm-shaped island as it was with one cluster zone. The Palm Jumeirah is the smallest of three planned palm islands, as well as a plethora of other fanciful island groups that are being strewn offshore from one end of Dubai to the other.

The second palm, the Palm Jebel Ali, is 50 percent bigger than the Palm Jumeirah. Dubai plunked it atop its only marine protected area, a reserve that once held a giant coral reef. Where fish once thrived, American resorts will rise. They include Sea World and Busch Gardens, which planned to open theme parks on an island shaped like Sea World’s killer whale Shamu. In 2008, workers were building the Palm Jebel Ali’s seventy-eight-mile road network, installing sewer and water infrastructure and erecting bridges to the mainland. But the downturn elbowed in. Busch Gardens and Sea World announced they’d postponed plans to open in Dubai.

The third palm, the Palm Deira, is planned with as much surface area
as Manhattan. It looks more like a pineapple than a palm tree, and won’t be finished for at least twenty years, if at all. Reclamation was about half done when it was halted by the credit crunch in 2008.

A few years ago, bin Sulayem asked Pickering to do another quick sketch. This was to be a concept known as the Pearl Islands. “Warren, I have to show this to Sheikh Mohammed tonight. It has to be quick,” bin Sulayem said.

The New Zealander sketched as fast as he could: a few roundish pearls on the sea, and a few islands shaped as shells. He noticed that, on his perspective drawing showing the islands from an angle, one looked like Australia and another like New Zealand.

Bin Sulayem liked the rendering. “That’s exactly what I want,” he said.

“Thanks for letting me put Australia and New Zealand in there,” Pickering joked. When bin Sulayem asked what he was talking about, Pickering jabbed his finger at the drawing. “There’s New Zealand there. And there’s Australia there.” Bin Sulayem recognized the shapes.

“Right,” bin Sulayem said, a brainstorm gathering. “Let’s download the rest of the world.”

Pickering found a map online and sketched the nations of the world as separate islands. He landscaped them and drew trees and the roofs of resorts. It was much more interesting than the Pearl Islands. Sheikh Mohammed liked it. “That’s how we came up with The World,” Pickering said.

The three hundred-island archipelago is now a fixture in the sea a few miles off Jumeirah Beach. If it ended there, Pickering could be satisfied with a lifetime accomplishment far beyond the dreams of any artist. But his palm island concept got used again, two more times.

“It just needed to be photocopied,” the New Zealander says. The Palm Jebel Ali has subtle differences in the trunk and crescent. And the Palm Deira is similar but larger, with height restrictions because it lies in the approach for Dubai International Airport.

The palms are part of a dense thicket of islands that Nakheel wants to reclaim as far as twelve miles offshore over the next three decades. One group, The Waterfront, looks like the blade of a scythe. Another, The Universe, looks like a spider or a squid, but is said to be a sun that will
wrap around The World. If they ever get built, the islands will double Dubai’s landmass and population, housing as many as three million people on brand-new land, says Lee.

“That’s crazy!” I respond.

“Bold,” says Lee.

Dubai gets a lot of comparisons to Las Vegas. And it’s no wonder. Both cities are awash in mass-market kitsch that residents take too seriously. Dubai also resembles 1850s San Francisco, a male-dominated immigrant city that serviced the gold rush, just as male-dominated Dubai services the oil boom.

But in speed of construction, the place it resembles most is Shenzhen, the Chinese boomtown. Like Dubai, Shenzhen mushroomed from a dirt-poor pearl diving and fishing village. It burst into a city in the years after 1979, when Chinese premier Deng Xiaoping declared it a special economic zone, China’s first major experiment with capitalism.

Shenzhen’s tallest building is the 1,260-foot Shun Hing Square, a turquoise office and apartment complex. It sandwiches what looks like a typical housing block between a pair of glassy silos. From its upper stories, you can gaze over the dense forest of high-rises to gentle rice paddy and forested hills just across the Pearl River.

One of the project managers on Shun Hing Square was a New Zealand civil engineer of Chinese ancestry named Greg Sang. Sang left New Zealand in the 1980s to work in Hong Kong’s booming construction sector, gravitating to the tall buildings that typify the city. The chance to build Shun Hing Square took him just across the border into China, where he got his first look at a true boomtown. In the 1990s, Shenzhen was described as a city building a high-rise a day and a new boulevard every three days. The city swelled beyond four million, as villagers flooded in from the Chinese countryside following dreams of riches. “The pace,” says Sang, “was frantic.”

“They don’t get caught up with a lot of planning issues you get in the West,” he says. “You could see the growth in the economy. GDP was skyrocketing. A lot of people were making a lot of money.”

When the turquoise tower topped out, Sang crossed back into Hong
Kong. In 1997, he was tapped to manage construction of 2 International Financial Centre, a tapering square skyscraper that was even taller than the Shenzhen tower. It was to stretch 1,335 feet above Hong Kong harbor. The eighty-eight-story 2IFC, completed in 2003, was the tallest of Hong Kong’s portfolio of skyscrapers and the world’s eighth tallest building. It was a tough project to beat. Sang was getting a reputation as a guy who could raise super-tall skyscrapers in a hurry. But just as 2IFC opened, the SARS epidemic hit, sending Hong Kong’s economy into a skid. For a skyscraper man, it looked like tough times.

Sang was wondering what to do with himself when the phone rang. A guy named Essam Galadari was on the line, calling from Dubai. Galadari said he worked for a company called Emaar. The firm wanted to get into tall building construction, but nobody in Dubai had experience. His offer was an arresting one: Come and build the tallest building in the world.