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Iceland Mag

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Another sad monument to 2008 crash in downtown demolished to make way for hotel

By Staff

  • A failed bank razed to the ground When the house was completed in 1963 it was one of the largest and most modern office buildings in Reykjavík. Photo/Anton

Visitors in downtown Reykjavík have been watching the demolition of a large unsightly concrete building next to the pond Tjörnin. The mid-century modernist office building, which is being slowly churned down by excavators, leaving only a rubble of concrete and tangled [steel reinforcement bars], once housed the headquarters of Glitnir bank, smallest of the three large banks which collapsed in October 2008, bringing the Icelandic economy to its knees.

Read more: Work starts to replace last remaining monument to 2008 crash with a Marriott hotel

In its place developers plan to build a new hotel, scheduled to open in 2020. This is the second “monument” to the 2008 financial crash in downtown Reykjavík to make way for a hotel. Last spring work began in an empty construction site next to the concert hall Harpa. The site had remained abandoned since the fall of 2008 when the construction of new headquarters for Landsbankinn bank were put on hold after the bank declared bankruptcy.

The hotel will include an exhibition of a Viking age longhouse which was discovered during an archaeological excavation of the site in the summer of 2015. 

Read more: Reykjavík city will preserve the Viking Age longhouse discovered this summer

Historic bank headquarters
The building which is currently being demolished was built in 1959-63. At the time it was one of the tallest buildings in Reykjavík, and one of the most modern office buildings in Iceland.

Read more: Bankers Behind Bars: A guided walking tour through the collapse of Iceland's banking system in 2008

Read more: Walk the crash in Reykjavík named on of 10 best alternative city tours in Europe

First it housed a small bank, Iðnaðarbankinn, which in 1990 merged with 3 other small banks to form Íslandsbanki. In 1998 Íslandsbanki then merged with a newly privatized state investment bank, and emerged in the 2000s as one of the three Icelandic banks expanded rapidly by funding „Corporate Vikings“, high-flying financiers who built up highly leveraged international business empires.

In 2006 Íslandsbanki rebranded itself as Glitnir. The new name was part of a wholesale rebranding of the bank as an international financial institution. The bank had moved its headquarters to Kirkjusandur at the end of the North Shore Sculpture and Shore walk.

Read more: A quick guide to the Reykjavík Sculpture and shore walk

In September 2008 Glitnir became the first of the Icelandic banks to teeter on the brink of collapse. The state initially stepped in, promising to provide the bank with fresh capital, but by early October it had become clear that all three banks were on the verge of collapse, and Glitnir would not survive, despite fresh capital. The government pulled back, and allowed the three banks to go into bankruptcy.

Last traces of an infamous bank obliterated
The demolition of the Glitnir headquarters in downtown Reykjavík will be completed by early next week. Glitnir‘s Kirkjusandur headquarters are slated for demolition as the site is being redeveloped. Both Glitnir headquarters will then have been demolished, leaving Icelanders with no visual reminders of the failed bank in Reykjavík.

A new hotel
Once the bank has been razed and the site cleared work will start on the construction of a new hotel. The hotel, which will be operated by Fosshotel will have a total of 115 rooms. It will be the 20th hotel in the chain.

The first design unveiled for the hotel was met with fierce criticism. The design was revised in response to this criticism. Fosshotel hopes that the new design will blend better with the nearby buildings. 

Fosshotel Lækjargata

View from Lækjargata The new design uses several different building materials and forms, echoes the chaotic building style of downtown Reykjavík. Photo/Fosshótel

 

Fosshotel Lækjargata

View from the Pond Slanted roofs, wood and copper help the hotel blend in. Photo/Fosshótel

 

Fosshotel Lækjargata

The initial design The design received nearly unanimous condemnation, prompting revision. Photo/Fosshótel

 

Fosshotel Lækjargata

Fosshotel Lækjargata The initial design envisioned the hotel as a large and rather drab concrete box. Photo/Fosshótel

 

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