Unfinished Nazi Resort Draws Investors to Baltic Island

Vacation homes for sale in the German town of Prora, on the Baltic island of Ruegen, feature private saunas and sea views at a steep discount to similar properties nearby. The catch? They’re part of a dilapidated complex of identical, unadorned blocks built by Adolf Hitler to house 20,000 workers on Nazi party-sponsored vacations.

Developers this spring began marketing apartments in the Colossus of Prora, as it’s known, for as much as 700,000 euros ($900,000) each. They’ve stripped the grimy plaster off facades, smashed through walls to create spaces big enough to appeal to modern tastes, and added balconies, wood floors and glossy kitchens.

“It’s better than letting the whole thing crumble,” Uwe Heuer, a banker from Hamburg, said as he toured a model apartment. “When I’m here I don’t think about the Nazi history.”

Begun in 1936 and abandoned when Germany invaded Poland in 1939, Prora was the largest project of the Nazis’ “Strength Through Joy” organization, created to keep workers busy with patriotic activities in their leisure time. More than twice as long as the Avenue des Champs-Elysees in Paris, the complex consisted of eight buildings with a total of 10,000 rooms.

The design, with its vast swimming pools filled with sea­water, a column-lined meeting hall reminiscent of ancient Rome, and a square for parades, won a Grand Prix award at the 1937 Paris World Exposition.

Protracted Negotiations

Four of the eight blocks are now being renovated. Since the first was sold almost a decade ago, negotiations with local officials and resistance from hoteliers fearing a glut of rooms delayed construction, according to Rolf Hoffmeister, chairman of Inselbogen Strandimmobilien, an investor group that bought a block in 2004. A youth hostel with 100 rooms is in a fifth block, and the three others are in ruins.

Backers of the projects are betting on a continuing property boom that has lifted German home prices by 23 percent in the past five years as investors seek the relative safety of real estate amid the European debt crisis. Prices per square foot are about two-thirds of those in nearby resorts, and developers hope to draw young vacationers with spas, tennis courts and shopping malls.

“It’s a location that can’t be duplicated,” said Gerd Grochowiak, co-founder of IrisGerd, a Berlin developer that bought one of the blocks in an auction last year. The fine white sand and clear water add to the allure of the biggest undeveloped stretch of land along Germany’s northern coast, where new construction is limited. IrisGerd plans to turn a 1,250-room block into 250 apartments in the next two years.

Bauhaus Style

Prora’s architectural style is considered Bauhaus, with straight lines and repetitive structures that reflected the modernist leanings of its architect, Clemens Klotz. But its size and location were typical of the Nazis’ use of architecture as propaganda, according to Juergen Rostock, director of the Prora Documentation Center in Berlin.

“It’s important to remember that these were not luxurious buildings,” Rostock said. “They were very modest.”

Although the government considered razing the buildings shortly after German reunification in 1990, they’ve since been given landmark protection and the developers have received a tax break to renovate them. Axel Bering, founder of developer Bering Consulting GmbH, said the landmark designation has made it difficult to adapt the buildings to modern standards and make them appeal to buyers.

Floating Balcony

“It took us many meetings with local officials to come up with this design,” Bering said, showing potential buyers a sparse, floating balcony suspended by steel ropes. Bering began renovations in February and plans to finish by mid-2015.

During the war, the half-built structures were used as housing and training grounds for Nazi policemen later involved in the siege of Leningrad and war crimes such as transporting Jews from the Netherlands to Auschwitz, Rostock said.

In the decades that followed, parts of Prora were used as barracks by East German soldiers and then turned into vacation homes for police officers. After the Wall fell, the hostel, a museum, art galleries and an archive were added.

Thousands of people come to the site each year, riding bikes along the path that separates the six-story buildings from the town. Many stop at weed-choked gardens filled with rubble to look at the colorful banners advertising the developments.

“I’m glad something good is happening here,” said Wilfried Roessner, a visitor who has been vacationing on Ruegen for eight years. “Everything has its time.”

To contact the reporter on this story: Dalia Fahmy in Berlin at dfahmy1@bloomberg.net

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net

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