From wasteland to a Hilton hotel: the trajectory of a block in Reykjavík after the economic crisis (2008-2015)

Anne-Cécile Mermet

Figure1Figure 1. The Hljómalind block in July 2015
Source: Mermet, 2015

After the two years of recession that followed the bankruptcy of the three main banks of the country in October 2008, Iceland is currently undergoing a significant economic recovery (Bergmann 2014) largely driven by the tourism industry[1] .This recovery is witnessed by the increasing number of building sites in the Icelandic capital, especially in the city center where many of them have a touristic purpose (building of new hotels, renewal of the old harbor into an entertainment area for example), reflecting the interweaving between urban development and the quick, indeed sudden, succession of economic cycles that characterizes this country. While the fleeting triumph of the “neo-Vikings”’s neoliberalism – “a small elite that seemed to have appeared almost out of nowhere and that flaunted its wealth rather crassly at times” (Benediktsson et Karlsdóttir 2011, p. 229) – in the 2000s (Bergmann, 2014) was embodied by the building of a business district located next to the city center, the change of seafront fishery warehouses into luxurious and modern residential complex or the launching of the building of an architectural icon (the concert hall and conference center Harpa), the economic collapse resulted in the sudden freeze of numerous projects, such as the Harpa, the residential towers Skuggi or of the Hljómalind lot. Except for the construction of Harpa, which resumed as soon as 2010 and completed in May 2011 due to the high symbolic stakes involved[2], most of other building sites have only recently resumed, after several years of delay.

A recent book gives an account of this close link between the built environment of Reykjavík capital area and the economic situation of the country and its banks. The authors suggest that crisis can be seen as period of adjustment for a system, allowing the development of solutions to major problems, and unfold the hypothesis that this crisis can be interpreted as an opportunity for the city to set up alternative – less financial and speculative, more participative and sustainable – ways to produce the city (Mathiesen, Forget and Zaccariotto, 2014).

This paper aims to explore the validity of this thesis through the specific case of the Hljómalind block, which is located right in the city center and can be seen in its current state on Figure 1. This image shows two snapshots of the site: the building site that should end in the spring of 2016 in the opening of a new Hilton hotel indicates the economic recovery, whereas the street art fresco appears as the remainder of a former artistic appropriation. The Hljómalind block thus provides an interesting example to analyze to what extent the delay suddenly imposed on this block by the crisis has been seen as a chance to apply innovative urban development principles which henceforth put more emphasis on participative aims than financial profits, and to understand which role is played by tourism industry in this process. Looking back at the seven years following the collapse and taking into account the original context of economic recovery, this piece intends to track the evolution of this block before, during and after the crisis and to determine whether the new appropriation forms of the site that appeared in the recession years tend to resist to the return of the economic growth.

Hjartagarðurinn or the times of the creative wasteland and participative utopia (2008-2013)

Located between Laugavegur, the main shopping street of the city, and the more administrative Hverfisgata (see Fig. 2), the Hljómalind block is in the heart of the old center of Reykjavík. Lined with several historic buildings from the first half of the XXth century, which today host commercial, residential but also entertainment functions (notably with the presence of the famous concert hall Faktóry), but also newer and less qualitative buildings, the inner part of the lot used to be a parking lot. During the economic boom of the 2000s, the entire lot, which is strategically located, has been bought by Laugavegsreitir, a subsidiary company of the real estate company Reginn, which is itself a subsidiary of Landsbankinn (one of the three banks involved in the economic collapse) in order to develop the ground by building a shopping mall.

Figure 2. Location of the block
Source: Reykjavíkurborg, 2015

After the bankruptcy of the bank in 2008, the project ground to a halt. The inner part of the lot then became a wasteland which sheltered drug trafficking. But soon, as described in the academic literature on creative wastelands, while awaiting reuse, the site was spontaneously taken over, first by graffiti artists who very soon covered the inner walls of the lot with colorful and continuously renewed frescos, then by the inhabitants. Indeed, during the summer of 2011, three inhabitants living in the city center and close to the artistic circles, launched a participative initiative through the creation of a Facebook Group in order to turn this wasteland into a communal space and a public playground, with the agreement of the owner and the City Hall who both saw this as a way to cheaply maintain and normalize this central site in times of severe economic constraints. This initiative has been realized by the organization of several volunteer cleaning meetings and laying-out workshops : making of a stage and several skateboard ramps, installation of small street furniture (benches, tables), creation of heart-shaped brick paving intended to symbolize the attachment to this place (as its name, Hjartagarðurinn, the heart garden) (Figure 3). The square soon started to host events such as concerts or secondhand markets, and became a photographic “spot” for tourists, so well-liked that it is described in 2012 as “one of Reykjavík’s most colourful and culturally appealing areas[3]”.

Figure3 Figure 3. Hjartagarðurinn in September 2013. 
Source: Wolfgang Sterneck (Creative Commons License BY-NC-SA)

Thus, the changes in the management of this site were at first consistent with the theory of the emergence of more participative ways of practicing urban development, as described for other cities (see for instance Orduña-Giró and Jacquot, 2014).

The return of financial priorities in the new form of the tourism industry (2012-…)

However, as soon as 2012, as the Icelandic economy and real estate as well tended to recover, largely due to the growth of tourism, the Laugavegsreitir decided to make this lot profitable and, so, to reclaim its ownership of the site, for a touristic purpose. Indeed, notwithstanding the crisis, tourism kept expanding in Reykjavík, following the strong growth of tourist influx converging on Iceland[4]. In a few years, Reykjavík has become a destination in its own right, promoted by new offers like city-breaks or stop-over on the way between North America and Europe, which entailed the need for new tourism accommodation and thus the opening of new hotels in downtown[5] often taking place of former establishments such as the building of the newspaper Morgunblaðið in 2011 or the Nasa club in 2012.

Over the autumn of 2012, the City Hall of Reykjavík published a new planning document for this area. It allows, in accordance with the Master Plan 2010-2030 for the entire capital area which promotes densification, the construction of new buildings in the inner part of the lot (see Fig.6), thus threatening the continuation of the participative management, of the site. At the same time, the Laugavegsreitir heralded the impending launching of a mixed-use property program on the Hljómalind lot whose cornerstone is a new 7000 m² Hilton hotel, meaning the return of financial priorities and the end of the participative initiatives in the management of this site. Indeed the local stakeholders involved in the upkeep of the site did not really have a say in these decisions and were offered instead to repeat this experience in another neighborhood of the city (as a matter of fact at Breiðholt, a deprived neighborhood far from the tourism influx and where the land is far less profitable), despite claims to the contrary.

Figure4 Figure 4. “[Mon]ey killing art and culture”, September 2013
Source: Wolfgand Sterneck (License Creative Commons BY-NC-SA)
(près de thingholtstraeti)Figure 5. “No place for kids to play, luxury apartment in the way”
Source: Mermet, 2015

The project has become reality in September 2013 (in the meantime, the lot had been bought by Þingvangur, another real estate company close to the Landsbankinn) when a fence was put around the square[6], bringing an end to the Hjartagarðurinn experience. Several buildings which were not protected by the heritage law, including the very popular concert hall Faktóry, have been destroyed, which gave rise to much discontent.

Was the participative moment just fleeting? Towards a balanced appraisal

For all that, should one conclude that the Hjartagarðurinn experience had no impact at all on the trajectory of this lot? The comparison of the blueprint drawn before the crisis and of the one published in 2012 leads to a more balanced appraisal.
Fig6_ENFigure 6. The blueprints of the lot, 2004-2012
Source: Blueprints, Reykjavíkurborg, 2012

The 2004 blueprint indeed allowed the urbanization of the entire lot, including its inner part – which was supposed to shelter a mall at that time. Conversely, the post-crisis plan clearly integrates the idea of, if not a public space, at least a pedestrian path and an access to the inner part of the lot and the owner company has brought up the idea of a place open to the organization of events such as concerts. Nevertheless, this place will remain highly controlled, closed at night and tightly bound to the new Hilton hotel, far from the fleeting participative utopia embodied by the Hjartagarðurinn experience.

To sum up, while this experience led to the opening of the lot, the pre-crisis rationales of production and management of urban space seem to have indeed persisted. This case study calls into question Mathiesen, Forget and Zaccariotto’s appealing theory. On the contrary, it suggests that this participative experience can happen only in a context of capital disinvestment of the urban space, which has only been very temporary here. The fact that the key stakeholders of the Hjartagarðurinn experience have been offered to repeat the project in a deprived part of the city tends to confirm it. The strong growth of tourism in Reykjavík played a crucial role by maintaining the potential value of this central location, despite the crisis and the decline of inhabitants’ purchasing power, the hotel option having henceforth been seen as the best way to make the land profitable. Beyond these urban issues, this example also leads to reconsider the widespread idea according to which Iceland is a crisis exit model and an example of a hypothetical reform of the neoliberal economy.

NB: a complementary portfolio displaying pictures of the site from 2010 to 2015 can be seen on this page:


Andres L. (2006), « Temps de veille de la friche urbaine et diversité des processus d’appropriation : la Belle de Mai (Marseille) et le Flon (Lausanne) », Géocarrefour, vol. Vol. 81, n°2, pp. 159‑166.
Andres L. et Grésillon B. (2011), « Les figures de la friche dans les villes culturelles et créatives », L’Espace géographique, vol. 40, n°1, pp. 15‑30.
Benediktsson K. et Karlsdóttir A. (2011), « Iceland crisis and regional development – Thanks for all the fish? », European Urban and Regional Studies, vol. 18, n°2, pp. 228‑235.
Bergmann E. (2014), Iceland and the International Financial Crisis: Boom, Bust and Recovery, Houndsmills, Basingstoke, Palgrave Macmillan, 232 p.
Mathiesen A., Forget T. et Zaccariotto G. (2014), Scarcity in Excess: The Built Environment and the Economic Crisis in Iceland, New York, ActarD Inc., 250 p.
Orduña-Giró P. et Jacquot S. (2014), « La production participative d’espaces publics temporaires en temps de crise », Métropolitiques,


Websites accessed (Last access to all websites: August 2015)
Flickr Photo album from which Figures 4 and 5 have been taken, entitled “Killing art and culture”, and taken by two German photographers on the eve of the closing of Hjartagarðurinn. It shows the street art frescos and the different facilities created by the community.
Page from the blog of a writer from the Huffington Post (which has published a paper on the site) and which displays numerous pictures promoting the appropriation and the success of Hjartagarðurinn.
The Reykjavík Grapevine is an English-speaking cultural semimonthly. This succession of papers published between 2011 and 2013 relates the history of the site as well as the debates raised by the closing of Hjartagarðurinn.


[1] Source: Report from the Central Bank of Iceland, 2014.
[2] Several alternative options were sketched out: leaving the gaping hole as a mark of the consequences of a completely deregulated neoliberalism; destroying what was already built, etc. The resumption of the building has eventually been decided.
[3] Source: Reykjavík Grapevine, 8/10/2012.
[4] 502 000 tourists in 2008, 997 000 in 2014 according to the Icelandic Tourist Board, 2015.
[5] The three most significant projects are all in downtown: Harpa Conference Hall (250 rooms), Hofdatorg tower hotel (343 rooms) and the new Hilton hotel (115 rooms).
[6] It is worth noting that the company chose to enclose the lot with blank board fence, temporarily allowing graffiti artists to transfer their creativity there


Anne-Cécile Mermet
École Normale Supérieure de Lyon


Translation French > English :
Anne-Cécile Mermet