Another review of the Palm

One of the things people in other countries often ask one about Dubai is the Palm. Not all know that there is more than one, but the concept is certainly famous enough that people are curious. While parts of it are nice, there are less-appealing aspects, including the questionable environmental impact and less than fully reliable real estate arrangements. Add rumors of sinking sections causing damage, the fact that even palm Jumeirah is still a construction site (we rented a place out there a few months ago when some of my elephant polo team met up in town en route to a tournament, and our apartment door was labeled"occupied" to distinguish it from all the rest. I went swimming with the dear sister, and felt more than a little guilty swimming under the gaze of the near-by construction workers. The trunk road is also a pain; in order to minimize traffic, it is all one-way. If your place is on the left side of the trunk as you enter, you must drive down it to turn around to et to your building. This gets old. Even the larger, more expensive villas are pretty close to one another as well, making privacy difficult), my own concerns about traffic (the trunk connects to the road at one point, one future serious traffic choke point), rumors of sharks out near the end fronds (there are sharks in the Gulf, but far out. But the Palm is far out) and the general kitchiness question.

Now the mainstream press, often so positive (with the exception of some articles devoted to the plight of laborers and domestics) is starting to notice as well. The Guardian ran an article titled "Pitfalls in Paradise: Why Palm Jumeirah is Struggling to Live Up to the Hype," first brought to my attention by Grape Shisha.

To be fair, only roughly 4,000 people of the 65,000 who will eventually live there (plus the 40-odd hotels) have already moved in, so you can't say that the Jumeirah Palm is "done," so some of these issues may be fixed in the future. But some may also be exacerbated.

Among the issues detailed by the Guardian:

- Multimillion-pound villas squeezed together "like Coronation Street" (a British soap opera including a street of that name, full of tight houses). This is also apparently the result of deceptive construction practices ala the metro line. The article quotes Rachael Wilds, 42, an exhibition organiser from Surrey who moved in with her family to a palatial villa on one of the Palm's "fronds" a year ago, who complained that she found her £3m property squashed against a neighbour's and set in a barren, almost treeless, landscape. "It was absolutely nothing as it was depicted in the brochure," she says. "There was a massive gap between the villas and it was full of lush tropical gardens. We were totally shocked at the closeness of the villas." What is true elsewhere is doubly true in Dubai. Caveat Emptor.

- Air-conditioning bills of £800 a month (roughly 1600 USD). This is just poor engineering. Its not like the weather would be a surprise. Could they not make the houses more efficient? This is also the buyers' fault too though - they should have paid attention to such things.

- Overly-pushy PR. The villas were built by state-owned Nakheel Properties, and their is omnipresent on flags all over the island. For some residents, this is a little much. Again to be fair though, flags with logos and slogans are all over Dubai, especially along bridges and main roads. So complaining that the Palm is doing this may also fall under the "well, what did you expect" rubric.

- Intensive irrigation is necessary to maintain the landscaping, but uses tremendous amounts of water (note: most of the water will come from desalinization plants, which themselves use tremendous amounts of energy)

- Tallest trees actually mobile phone masts dressed up to look like palms (I didn't notice these, so they must be at least OK. There is one across from the entrance to Madinat though and it isn't bad for what it is)

- Guilt over the quality of life of the migrant construction workers. This is a real concern. But again, this is a pan-Dubai issue and one people should consider when purchasing anywhere here. Problems mentioned in the Guardian include low salaries of 200 USD per month, debts to agents in their home countries who paid for their passage with interest rates as high as 120% a year, increasing alcoholism and debts accumulated to pay for said drink, unpaid salaries, poor living conditions, rising suicide rates and separation from families at home.

Some numbers from the Guardian:

13m: The number of liters of desalinated drinking water the Palm Jumeirah uses when at capacity (they didn't say in what period. It may in one day).

28: Bottlenose dolphins have been flown in from the Solomon Islands to populate Dolphin Bay, an 11-acre lagoon

94m: The cubic meters of sand used to build the Palm Jumeirah

84: The site has doubled the natural 42-mile coastline of Dubai

4: The Palm is four times the size of Hyde Park in central London

The Hype is Moving West-ward

A few years ago, it was not uncommon to see ads for Dubai real estate in the US, specifically the DC and New York newspapers (those being the two US cities in which I spend the most time). There were even quasi-fraudulent "get rich investing in Dubai real estate" weekend seminars held in hotel ballrooms. Now that the market has stabilized (and may even go down a bit as more buildings are finally completed and go online, the marketing fury has moved on. I initially assumed it had just died down a bit to more rational levels, but my recent extended stay in Moscow suggests otherwise. There, ads for Dubai real estate about, with even flashing neon billboards and banners hanging from high rises touting apartments (sometime it is villas, but mostly apartments) here in DXB.

The advertising has even gone a step further. I am currently considering purchasing an apartment in Moscow (I would have done so already, but spending 1,300,000 Euros for a one bedroom, even a nice one, seems a bit much, and there isn't a lot of real estate that isn't either over budget or poor quality, which means I'm still looking), and I am starting to get annoyed by the number of listings, officially in Moscow, that are really for units in Dubai. I guess the idea is that anyone with money to buy real estate in Moscow could be tempted to spend instead in Dubai. The tactic must work, as these listings are everywhere, enough so that real Moscow sellers stopped using them and I've basically given up on independent listings and am sticking to Moscow real estate agencies and their own vetted listings. It's a real pain though - Moscow agencies don't usually cross list, which means that I have to work with several agencies to see a good range of places.

A Very Bad Sign or Marketing Genius?

I'm going with both, although I'm glad to hear it will soon be illegal (who would let their child do that?)

The Growing Credit Market in Russia

I am a strong supporter of mortgages, as for many families they are the only means of ever building any real equity in anything; trying to save and invest money while also paying rest is just too hard. I've never had one, but I get car loans, as in many cities (including Dubai) the lack of option in getting around by any other way make cars are a necessity, although some aspects are more distasteful, including higher interest rates, the tendency to sell cars according to the monthly payment rather than total cost to the buyer, and the willingness of dealers to extend credit to people who really can't afford it, long-term (just like mortgage brokers, they resell the loans while getting a commission for making it, so long-term default rates don't really bother them). Credit cards and other consumer credit programs are another story; they are quite often deliberately usurious and use tricks to make it difficult to pay the bills or avoid additional hidden fees.

All of this is a real issue in the US, where poor mortgage decisions and high debt (credit card and otherwise) have made it very difficult for some families to live solvently and spend any money in the economy. The Russian economy is still growing, but I see worrying signs that credit is about to Reach Russia in a big way. Car loans are widely available, at least here in Moscow, and credit cards are promoted everywhere. The waiting couch at my neighborhood travel agency even had fake credit cards pushing debt as a means of paying for vacations. The small room also had a large banner offering up to 600,000 rubles with no interest for 90 days. On the metro I see little paper ads promising credit in one hour for up to 3500 rubles for all citizens of the Russian Federation, while the magazines, television and the two fashion channels on TV promote a lifestyle 95% of the country can't afford. Hopefully things won't get too out of hand, but the way things are looking now many Russian consumers are heading down the same credit-abuse path of the US, if not planning to exceed it.

Dubai as Product Placement

One of the many nice things about the Internet is that I can watch television shows from across the world, which really means the US (and in one case Canada), with the occasional Taiwanese drama thrown in. This includes Little Mosque on the Prairie (the Canadian exception). One of the characters just went to Dubai (temporarily) to work on the "World's Tallest Tower." Secret Dubai reports that Dubai was also in the US show Gossip Girl, that time referencing the Palm. Now, if this were a brand, or a specific resort, I would be confident that it is product placement. As it is, I am pretty sure that it is as well. Dubai does have a lot of hype surrounding it, but characters very rarely leave the scene of their shows, and the city is nothing if not good at self promotion.

This looks like a paid advertisement as well, although given 60 Minutes reputation as a major show I would like to think they haven't sold out that much, and are merely buying into it all (Dubai is pretty cool, after all, much as we like to complain about the negative aspects).

Update: I just saw the next Little Mosque on the Prairie and yes, it is product placement. The main plot line was about a character getting engaged, but within the first few minutes another main character (the one that came to Dubai in the last episode), was back, had an amazing time, mentioned that the restaurants are "indeed fabulous" and then got into an argument with his wife because, despite all of the wonderful shopping opportunities, he forgot to bring her a gift, which itself carried out into the first half of the show. The same wife character read her husband's Dubai guide while he was gone and mentioned that she learned about Sheikh Mohammaed bin Rashid Al-Maktoum. I love Dubai, and I agree, there are some good restaurants and shops, but it really makes no sense for the city to be featured in a show about a small town on the Canadian plains.

Photoshop madness

After writing my last entry about real estate companies Photoshopping out neighboring buildings and Photoshopping in plants, greenery and waterfront, I cam across a new blog (or at least new to me), appropriately titled Photoshop Disasters, which showcases Photoshop errors in major publications. Whereas this blends my two interests of graphics design and advertising/PR/media agenda, I thought it might be fun to show a few as well as two videos showing how it is done.

Decapitated Observer

I know moving her waist in makes her look thinner, but either someone was lazy with their distortions or Ann Coulter is part scary monster. Which would explain a few things.

I am sure that the two photos were taken at least a few months apart, but still, the difference is less than natural.

And two videos on how it is done (body and face). Warning: the body video (the second video) includes the image of half of a woman's naked derriére, and so may not be suitable for playing in some areas, such as that big conference or your three year old's birthday party.

The Face


The Body

A [Literal and Figurative] Sign That the Revolution May Be Over For Good

It's an ad from the Moscow metro for ArbatPrestige cosmetics and accessories stores, and says "Great October Price Revolution."

PS The owner of the ArbatPrestige (Arbat is a nice area here surrounding the charming Old Arbat and busy New Arbat streets) chain may have been adhering to free market principles a little too well; he was just arrested for tax evasion. I believe he did it (almost everyone does), but I wonder whom he upset to be arrested now? Maybe someone wanted his stores' real estate?

Update: It turns out that Semyon Mogilevich and Arbat Prestige are not the victims of a real estate raid or some other, more prosaic, type of conflict. That may be part of why he was targeted for prosecution now, but Mr. Mogilevich's history is not that of an honest businessman. He is wawnted by the FBI for racketeering, fraud and money laundering and is also accused of running drug, prostitution, smuggling and stolen art operations. He hasn't been on the run or in hiding - he's been operating quite openly here in Moscow, but now something happened so that he could be arrested. According to the Economist, he is also tied to a company that trades gas between Russian and Ukraine, a very sensitive issue, and one which makes the issue that much more complicated. Shortly after Mr. Mogilevich's arrest Ukrainian Prime Minister Yulia Timoshenko came to Moscow to discuss just that, with little real progress.