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Dubai : The Hippest City in the World
By Michael Y. Park
It's the latest hot spot for the rich and famous, and
it doesn't have a Park Avenue address or a Los Angeles
ZIP code.
In fact, it's a place many Americans can't find on a
map.
Dubai - a seaside city in the confederacy of
sheikhdoms known as the United Arab Emirates - has
gone from being a
sleepy desert town to the destination of some of the
highest-profile
names in the United States and Europe, and the
fastest-growing city in
the world.
"I'm able to say without hesitation that Dubai is the
hippest place on
the Earth," said Franko Vatterott, owner of the Human
Interest Group, a
sports management firm for the crown prince of Dubai.
"Nothing there is
good enough unless it's the best."
After he was found not guilty of sexual molestation
charges, pop prince
Michael Jackson flew to Dubai to take a break from the
cameras
and hobnob with Bahraini royalty and UAE racecar
drivers.
His activities there included hosting children's
parties at a water
park and sailing around The World, a massive
artificial island
in the shape of the Earth that's being developed as a
residential
complex -- "Spain" is already sold out. The King of
Pop is rumored to
be considering selling his Neverland ranch to move to
Dubai
permanently.
British soccer star David Beckham and his wife, former
Spice
Girl Victoria Beckham , vacation in Dubai frequently
and are
said to have bought property there along with much of
the English
national soccer team -- at a substantial discount.
Rod Stewart is reported to have bought property in
The World:
all of "Britain." Rally driver Michael Schumacher has
property
there, and a deal was just inked in mid-September in
which Donald
Trump's name will soon be stamped on a complex to be
called
the Trump International Hotel and Tower of Dubai.
"The hotel will probably be built very shortly - we're
just
finalizing the architectural plans in the next few
months," Donald
Trump Jr. told FOXNews.com. "The residential
development will
follow that."
Experts and people closely involved with the
development of Dubai say
it's no accident that the city's growing so quickly
and glamorously.
The city that Dubai has become is the result of
decades of long-term
planning by its crown prince, Sheikh Mohammed bin
Rashid Al Maktoum.
"Sheikh Mohammed's ultimate goal is to put Dubai in
the ranks of the
greatest cities of the world and it's quickly becoming
a New York,
Paris, Tokyo or Chicago," Vatterott said. "But whereas
those cities
took hundreds of years, this city took 25 years. It's
got a New York
business atmosphere and Cancun tourism. Combine the
two and you get
Dubai."
Attracting major celebrities is an obvious boon to any
destination
seeking tourism dollars and cachet, but the sheikh's
idea of turning an
oppressively hot town caught between the desert sands
and the Arabian
Sea into a cosmopolitan city to attract the likes of
the Beckhams was
an idea that was far from obvious. It was an idea born
of desperation.
By Middle East standards of oil production, Dubai is
small potatoes. In
1991, its reserves were estimated at a mere 4 billion
barrels. At 1990
levels of production, Dubai's reserves will run out by
2016.
Armed with such data, Sheikh Mohammed took a gamble:
He would count on
the city's location at a crossroads between the East
and the West, its
relatively tolerant culture and his family's vast
wealth to turn Dubai
into a Mecca for foreign investment, finance and
tourism.
In May 2002, in a controversial move, Dubai allowed
foreigners to own
land via three designated companies in what's called
"freehold" status.
Anyone who owns Dubai property is granted citizenship.
"Dubai recognized early on that the oil reserves
weren't going to last,
which is why they made a conscious decision to open up
to the public,"
said former Secretary of Health and Human Services
Tommy Thompson.
Thompson now works with Capital Partners, an American
development company building in Dubai, and the only
entirely foreign
group granted freehold title to property in the UAE.
"With Dubai's economy right now, only 12 percent of
the revenue of the
city comes from oil," he said.
Unsurprisingly, people became ravenous for Dubai
property after the
freehold announcement, even though the U.S. State
Department still
warns that many of the issues regarding landholding
rights in the UAE
haven't been ironed out.
Almost overnight, the city has become a surreal
juxtaposition of barren
desert, 21st-century skyscrapers and extravagantly
optimistic
construction sites that extend as far as the eye can
see.
"Sixteen percent of all the building cranes in the
world are in Dubai
right now," Thompson said. "Sixteen percent. That's
absolutely amazing
for a city to have that kind of economic development."
Builders are given a free hand in designing their
sites - meaning
that they can construct nearly anything they can
envision there.
"As a developer, it's an incredible place," Trump
said. "The stuff
they're doing is amazing - they're limited purely by
their
imagination and the laws of physics. It's an area
that's growing
rapidly and it's where we want to be."
"The fact of the matter is: The world is their oyster.
They can do
whatever they want in terms of building as long as
Sheikh Mohammed
approves it," added Todd Thiel, managing director of
Capital Partners.
"You can own an island, an entire island, for $3
million," Vatterott
said. "You can't get a place in downtown New York for
that.
"And you don't build average slop homes like in the
U.S. Each property
is a beautiful niche - the World, the Palm Island,
which if you see
it from a bird's-eye view is shaped like a palm tree,
a holy symbol
here. They can't build the villas and apartments and
houses fast
enough."
Dubai's critical target date is 2010. That's when the
sheikh has vowed
that the current annual number of tourists to Dubai
will have risen
from its current 5.2 million to 15 million.
To achieve that goal, Dubai is aggressively courting
celebrities and
emphasizing the city's safety (it's rated second to
Singapore),
multiculturalism (about 85 percent of the population
is foreign, the
residents are of some 140 nationalities, and the signs
are in Arabic
and English), over-the-top comforts and laissez-faire
cultural
attitude.
"Stars are probably in love with the five- to
seven-star hotels," Thiel
said. "The Burj [Dubai hotel] is almost so opulent it
borders
on -- I don't want to say gaudy -- but let's say
they've got extremely
high standards. A three-star hotel in Dubai is a four-
or five-star
hotel in New York. It's just a dramatically different
paradigm, and in
Dubai they will absolutely spend the money."
The sheikh has also concentrated on creating the
infrastructure for a
metropolis. The national carrier, Emirates, will soon
have
direct flights to and from San Francisco and Chicago,
and it has been
transformed into one of the world's premier luxury
airlines (the
ceilings on the planes feature twinkling "stars" when
the lights go
out).
Emirates uses Dubai as its main hub, and the city's a
key stopping
point between East and West for several other
carriers. The airport
also operates 24 hours a day without the noise
restrictions that
bedevil airlines in Boston's Logan or New York's John
F. Kennedy, and
travelers spending an hour between flights find
themselves in a glossy,
multilevel mall with posh stores and duty-free shops.
The UAE has also been ingratiating itself to
international financial
circles - the country has been strongly touting itself
as meeting
international business standards, and a U.S.-UAE
free-trade agreement
is expected to become reality as early as the first
quarter of next
year.
But it's still far from certain whether Sheikh
Mohammed will meet his
self-appointed deadline. The rapid growth has had some
foreseeable
consequences, like a daunting traffic problem, a
burgeoning sex
industry, questionable environmental practices and an
urban-planning
vision some critics have called haphazard.
It still also suffers from a stark class divide: a
tiny, elite ruling
cadre of Dubai natives, followed by a well-to-do
population of Britons,
Europeans, Canadians, Australians and Americans
working as financial
and technical specialists, all over a lower class of
workers, most of
whom are Indians.
"That kind of acceleration of growth is going to
naturally have a
degree of inflation, a degree of congestion," Thompson
said. "It needs
to have certain capital improvements, like water
systems and
transportation systems. But that's to be expected in a
city that has
had very explosive growth and tremendous economic
stimulus."
The city, Thompson noted, is run like a corporation
and has actually
shown a profit.
Thiel said Dubai would be become a model for the
Middle East city of
the future. In UAE, "the Dubai experiment" is already
being cautiously
judged a success. Abu Dhabi has been watching its
sister
city's accomplishments with a jealous eye, and is
toying with the idea
of similarly opening itself up to Western investment.
The class issues do exist, Thiel said, but the crown
prince is making
it possible to close those gaps.
"Yes, what's happening in the region involves the
haves and have-nots,
but Dubai is an economic miracle, and Sheikh Mohammed
is setting the
stage to create a middle class," he said. "He could've
easily taken all
the wealth and pilfered and done whatever he wanted to
- I could
point to Saudi Arabia - but when you think of it as
one massive
development, he's put his own dollars into the roads,
the water,
lighting and the master development. And it's catching
on."
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