Luxury Hotel Under Construction in Vidigal

By Antoni Galbany, Contributing Reporter

RIO DE JANEIRO, BRAZIL – After the pacification of the Vidigal favela community last November 2011 and subsequent UPP (police pacification unit), area real estate prices have experienced an increase of up to fifty percent, in some cases more. Along with this interest and speculation, is a proposed five-star luxury hotel being built by Helio Pellegrino, Antonio Rodrigues (owner of Bar Belmonte) and Conrado Denton at the very top of Vidigal.

The flashfire activity in the real estate market is due to the relative safety of the streets following pacification, the amazing views overlooking Ipanema and Leblon beaches in Zona Sul (South Zone) and the proximity to Rio’s most affluent area.

The owners of the future hotel spoke with Brazilian press O Globo about how the construction of the hotel has and will have many benefits for Vidigal’s residents. Among these, there employment opportunities created for the community workforce.

Andreas Wielend, an Austrian expatriate living in Rio who owns the popular Alto Vidigal hostel and party venue located next to the new hotel, notes that it can be a positive thing to have a luxury hotel there, as long as it is not isolated from the rest of the community:

“Most likely it will bring many favela residents into the middle class or even upper class as their properties are worth more and more. But some other people on the very poor side with no jobs on a regular base will have it hard to survive where prices are getting closer to the Zona Sul standard”, affirms Wielend.

At a glance, a five star hotel investment and development would appear to improve residents’ quality of life. However, the construction of luxurious hotels and homes in Vidigal may also bring difficult consequences for residents with fewer resources, as it brings the increase in rent and the cost of living – in a word, gentrification.

Isabella Imóveis, a real estate agency, is working to leverage this gentrification process by helping land owners to get a fair price by adding value and upgrading the physical structure and appearance of people’s properties. NGO Vidigal Feliz, on the other hand, also works to raise the social and economical level of infrastructure with sustainable growth in education and income by educational, social or community projects.

With the arrival of such a large investment into the community of Vidigal, some residents are voicing concern and becoming wary of what negative scenarios could unfold. Mariana Albanese, who has been writing Vidigal Blog for the last year, tells how people are afraid of being removed from their homes as a result of luxury building projects in Vidigal like the hotel, known as “the 314”.

“Why would anybody want to build a five stars hotel investing R$ 1.5 millions in a place that lacks of infrastructure for touristic complexes? There must be something really wrong,” Albanese explains to the The Rio Times.

After the O Globo article was published in early May, sources say hotel construction was ordered to stop pending some zoning issues. From a real estate developer perspective, these kinds of factors will continue to make development projects high-risk as the city catches up with the growth of the market.

Correction: July 12, 2012
The article was first published with the names of the developers incorrect, and in addition Conrado Denton wrote to us to say they are building a boutique hostel, not a five-star hotel.