At the end of January, the department store chain “Galeria Karstadt Kaufhof” received a state loan of 460 million euros. The company had already filed for bankruptcy last year. Now there again is a threat of impending insolvency and a loan that may never be paid back.
In 2019, the Austrian multi-billionaire René Benko and his company Signa took over Germany’s largest department store group. In Austria he was convicted of corruption and in the “Ibiza video” the then chairman of the right-wing FPÖ Heinz-Christian Strache claimed that Benko was secretly a major donor to his party. Now there are investigations into the delay of insolvency against “Galeria Karstadt Kaufhof”.
After the bankruptcy in 2020, more than 40 department store branches were closed and thousands of jobs were destroyed. Additionally, seven branches in Berlin were initially due to close. At the beginning of August, SPD Mayor Michael Müller, Green Economy Senator Ramona Pop, and LINKE Senator Klaus Lederer stepped in front of the cameras and, beaming with joy, declared, that they had “saved” four branches through an agreement with Benko. These department stores are now to remain open for another three to eight years.
In return, the Senate promised to support Benko in the implementation of three highly controversial real estate projects: a high-rise at the location of the Kaufhof on Alexanderplatz, a high-rise group on Kurfürstendamm and the demolition of the Karstadt and its replacement with a luxury shopping mall with a 1920s facade at Hermannplatz.
The news horrified both DIE LINKE and people who live around Hermannplatz, for whom Benko’s project was already presented in 2019. The plan would see the demolition of the Karstadt building and its replacement with an 11-storey high-rise with the replica facade of the department store that had stood there from 1929 to 1945, all with a price tag of half a billion euros. This tacky block would house a shopping mall as well as a hotel, offices, and restaurants. The plan shows that Benko has little interest in maintaining the department store concept, instead looking toward huge profits from the exploitation of this valuable site.
Such a project would not only mean years of major construction, but it would also act as an accelerator of the rent explosion and displacement of residents and the predominantly migrant-run small businesses in the area. There is also a risk of hundreds of Karstadt employees’ jobs being destroyed. Following Benko’s announcement, resistance quickly formed: residents founded the initiative Hermannplatz – karSTADT erhalten (Hermannplatz – preserve(karSTADTD). Since then, the activists have been keeping residents informed with information stands, protest campaigns and events, and the public critique of Benko’s plans.
Comrades from DIE LINKE Kreuzberg and Neukölln formed a joint working group to organize protests. The district building councillor of Friedrichshain-Kreuzberg, Florian Schmidt, refused to issue the building permit because the mammoth project would blow up the building and social structure around Hermannplatz.
In spite of the fierce opposition, Benko is not giving up. Instead, he has begun an elaborate campaign to turn public opinion. He talked to local politicians about spaces for social uses such as a library, doctors’ offices, or a kindergarten in the giant new building, but without naming a specific rent figure. His staff toured the two districts with pretty pictures of a clean Hermannplatz and a roof terrace.
Then Benko shifted to the tactic of “Greenwashing,” which involved receiving the advice of the consulting firm of former Green Party Foreign Minister Joschka Fischer. Although the environmental effects of a demolition and new construction with a concrete monster would be disastrous, Benko made his plans appear to be “climate neutral” through twisting the facts through calculation games. In addition, a bike path was added through the backyard of Karstadt and a second-hand store slated to open in the department store.
Embarrassingly, the used goods store in Karstadt was then also advertised as an “innovation” by Berlin’s Green-led environmental administration at public expense. The Green Party leadership and the entire SPD support Benko’s plans for “upgrading” and want to secure the “investment” in the new building at any cost. That Benko has just collected about the same amount of state credit for his over-indebted department store company as he wants to invest in the new building, does not seem to matter; nor does the fact that he wants to squeeze every euro invested out of the project several times over – at the expense of those who now live and work around Hermannplatz.
The affected residents are also subject to Benko’s public relations campaign. With the help of an opinion research institute, he ordered door-to-door interviews on the topic of “sense of security” at Hermannplatz, and held several publicity events which he passed off as organic expressions of citizen’s participation, with the impression they were official measures of the municipal administration. The NGO “Lobby Control” considers these tactics very questionable. Benko tries to manipulate public opinion in the social media as well. The “not without you” is the slogan with which the billionaire tries to gain public legitimacy.
The people in Kreuzberg and Neukölln have not fallen for the propaganda. Every event organized by the “Initiative Hermannplatz – KarSTADT erhalten” and THE LEFT against the demolition plans was well attended and the info booths always got much encouragement. If the Senate indeed wants to enforce Benko’s plans against the will of the local residents and the district of Kreuzberg, we must organize massive protests. The referendum “Deutsche Wohnen & Co. Enteignen” shows, that we are not powerless against real estate speculators. The Karstadt demolition, the luxury shopping mall, and the displacement of the people stops with us!
Do you want to find out more information about Signas’ plans and why we have to prevent them? The “Initiative Hermannplatz – KarSTADT erhalten” homepage offers a lot of information in different languages. If you want to get active against the Karstadt demolition in a working group of THE LEFT Kreuzberg and Neukölln, get in touch with Carla: email@example.com
This article was written in German for theleftberlin.com. Translation: Ilona Addis