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Will Riga become a moss village? Without A-class offices – yes.

Will Riga become a moss village? Without A-class offices – yes.


It is no secret, that investors always look at the opportunities offered by the small country of Latvia on a Baltic scale. Particularly selective are high value-added creative technology and financial service companies. They are just as attracted by the low costs of the Baltic states and it’s educated, well versed in different languages workforce, at they are deterred by the underdeveloped infrastructure and inadequate office space. We may seem to be in a better position than our neighbors – our language skills are better and more diverse, our understanding of the differences between Western and Eastern cultures is the greatest and our geographical location is the most advantageous. However, let’s ask ourselves, how can Riga compete with Vilnius and Tallinn and ”skim the cream” of technology, finance and telecommunication companies if we only build one A-Class office building every five years?


Who’s to blame?


Riga would be very attractive to Scandinavian hi-tec companies, but the local development of Silicon Valley in the capital is hampered by the lack of suitable A-Class office spaces. Who’s to blame? Is it the indifferent attitude of public authorities and their lack of interest in cutting red tape and stimulating development? Or perhaps the problem lies deeper – in the unfavorable laws and regulations, that make us vulnerable to the competition between the ”sisters” – the Baltic state capitals. One thing is clear – waiting around for luck or miracle, which would turn the tide, will not answer these questions.


“A Class Offices” – What are they and why do we need them?


Several years ago, we were forced to find that our businessmen had virtually no consensus on which offices and buildings deserve an A-Class tag. Company Arco Real Estate rushed to the rescue – it turns out there are 22 criteria to assess whether an office is high class or not – they include the condition of the building , HVAC (heating, ventilation and air conditioning), elevators, power source, security (both video surveillance and access cards) as well as 24-hour security, the structure of the building, a smiling secretary, and within 200 meters, a place to eat and buy what you need everyday. As well as a parking lot and telecommunications.


If only 18 or fewer of the 22 criteria are met, the office building receives a “B” mark and falls out of A-class, and loses the hope of becoming a home to a valuable foreign affiliate in Latvia: “Foreign companies exporting IT, accounting and financial services, are in the need for a highly skilled workforce, and to attract it only a high salary won’t be enough, the potential employes also require a comfortable work environment – it’s important for the employee to be able to access facilities such as a gym and shower, a pleasant climate and visual comfort indoors – these companies won’t look for a refurbished Soviet-era building, or a building without modern HVAC and security solutions”, says Klav Vasks, co-owner of the Mūkusala Business Center (MBC).


Baiba Ziberga, head of the office of the Finnish financial technology company Opus Capita, highly values the location of her workplace – in the Mūkusala Business Center. She emphasizes, for example, that colleagues living outside Riga have easy access to the office and can use a large parking lot in a strategically convenient location between the Stone and The Island bridges. There is also a very good level of communication with the management of the Business Center on management issues – usually even the smallest problem is quickly resolved.


How to catch up to Vilnius and Tallinn?


As soon as a Nordic company becomes interested in the eastern market or in reduction of labor costs, we have the opportunity to act as a bridge across language barriers and cut our share of IT or financial services big pie. But it will only happen if we have enough of the appropriate quality space to offer. K. Vasks comments on the situation: “Vilnius and Tallinn have undergone rapid development cycle in the last three years, placing Riga in third place in the competition for the status of the Baltic Capital of Technology.”


Developers cite the bureaucracy involved in the project approval process as one of the main problems. “There is still no modern, centralized and electronic project tuning system in place – it’s the responsibility of Ministry of Economy. Many utilities of engineer communication network keep ‘living’ separate from one another – we, the developers need to print fifteen project volumes and tackle each one of the networks individually, making the process incomparably longer than, for example, in Lithuania, where effective measures to stimulate business are regularly implemented and the bureaucracy is cut off. Projects submitted in Lithuania are considered approved by default if the receiving authority does not respond within a certain time frame and so on ”- K. Vasks shares his experience and observations in neighboring countries.


The building regulations in Riga are also often regarded as detrimental to the developers. The MBC co-owner believes that the municipality should push for regulations that do not become a stumbling stone to the city’s economic growth.


We must change our way of thinking as well as the system


The building regulations in Riga are also often regarded as detrimental to the developers. The MBC co-owner believes that the municipality should push for regulations that do not become a stumbling stone to the city’s economic growth.


If we want to see elegant and modern A-class office buildings grow at a fast-pace, we need to loosen the existing legislation first. Stagnation and too long sitting in a comfort zone make thoughts and vision short-sighted and barren. Our neighbors have come to realize this, and so they are now sowing seeds that could otherwise yield a rich harvest for us.