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Germany’s central bank is considering abandoning its landmark brutalist headquarters in Frankfurt amid regulatory criticism of a multibillion euro redevelopment of the asbestos-stricken site, where half of the country’s gold reserves are stored.
Germany’s public spending watchdog this week published a report lambasting a project to refurbish the Bundesbank’s ageing main office building and the surrounding campus to host its 5,400 Frankfurt-based staff.
The controversy has echoes of the $2.5bn refurbishment of the US Federal Reserve’s headquarters, which provoked the ire of US President Donald Trump.
Bundesbank staff vacated the site in 2021 and temporarily moved into a 1970s high-rise in Frankfurt’s downtown banking district as the original headquarters building needed to be stripped of asbestos and other potentially harmful building materials.
The most recent plans envisage staff returning to the old headquarters by 2032. But Bundesbank president Joachim Nagel, who inherited the redevelopment scheme when he took office in 2022, is now considering whether to abandon the planned move back to the old venue, according to people familiar with the discussions.
It might be more economical to sell the old premises, which could be turned into a prime residential development in a growing city where housing is scarce, according to the people. The Bundesbank could then either rent modern office space in downtown Frankfurt or look for a site to build a new headquarters.
The central bank said in a statement that “we are currently carrying out a cost-benefit analysis of the current planning status” of the project, and that it was examining financial criteria as well as “security-related aspects”.
It added that it would address the findings of the economic feasibility study “in due course”.
Currently, 1,700 tonnes of gold bullion with a market value of more than €155bn are kept in an underground vault at the site. Should a return to the old headquarters be abandoned, the gold would need to be relocated to other safe locations at a time when the central bank is facing calls to repatriate its gold reserves stored in New York.
The redevelopment saga dates back to 2016, when the Bundesbank decided to refurbish its main office building rather than demolish it. It also started planning to add the new campus, which was to include four new office blocks, a sports centre, a restaurant complex and a nursery at an estimated cost of €3.6bn. Due to surging inflation after the pandemic, this estimated price tag rose to as much as €4.6bn.
After the pandemic and the rise of working from home, the central bank realised that the plans were outdated as they assumed more than 90 per cent office attendance.
Nagel has subsequently started to scale back the plans he inherited from his predecessor Jens Weidmann. But despite these revisions, the project remains under heavy scrutiny. The latest publicly available cost estimate, from 2024, estimated the price tag at €3.3bn, although costs are thought to have come down further.
This week, the Federal Audit Office released a scathing two-part review dating from April 2024, after German financial newsletter Platow Brief reported on the previously unpublished findings.
“Without clear justification, the Bundesbank planned for 5,400 square metres more office space than permitted under [government] benchmarks,” the Audit Office’s report said, adding that this decision increased the buildings’ lifetime costs by “nearly €1.7bn”.
Per employee, the Bundesbank was planning for more than 10 per cent more office space than official rules stipulate. It relied on using 50-year-old guidelines from a time when staff still worked with paper files. The budgeted costs for a place in the on-site children’s nursery would have been five times higher than usual.
Due to its independence, the central bank is not required to respect government standards. “However, the very high costs cannot be explained solely by the Bundesbank’s special characteristics,” the Audit Office concluded, also rebuking it for “slow and insufficient” sharing of information, which “significantly complicated” its review.
Built from 1967 to 1972, the main 13-storey office building was designed by Frankfurt architect Otto Apel in a brutalist style that Peter Cachola Schmal, director of the German Architecture Museum, in 2018 described as “modest, sober and elegant”. It included an artful top-floor conference room — consisting of 582 coloured plastic and aluminium discs — designed in the early 1970s by Victor and Yvaral Vasarely.
During the golden age of the Bundesbank before the start of the euro in 1999, when hawkish central bankers including Karl Otto Pöhl, Helmut Schlesinger and Hans Tietmeyer dominated European monetary policy, the towering grey office bloc became a symbol of the Bundesbank’s tight-fisted “stability culture”.
The president’s office right at the centre of the 12th floor boasted one of the best views of the city’s skyline. Its last occupant, Weidmann, like Schlesinger, each morning walked the stairs to his office rather than using the elevator.
However, the building received mixed reviews from staff as it lacked air conditioning in all but its two top floors, which were used by the board. It is based in a remote area of Frankfurt with few if any shops and restaurants nearby. It was listed as a historic landmark in 2022.