Dubai making a splash in desert

By Jim Krane
Associated Press

DUBAI, United Arab Emirates — In a city already synonymous with flashy developments, a multibillion-dollar project may set a new precedent for construction projects around the globe.

A model of the planned Jebel Ali Palm Island development, on display at the Nakheel sales center in Dubai, shows the scope of the project that's just one part of the tiny emirate's huge plans. Kamran Jebreili • Associated Press

The Dubai Waterfront is expected to house 400,000 people and transform the last stretch of Dubai's undeveloped seashore. Foreign investors are being offered a minority stake in this, one of the emirate's signature mega-projects. And American companies, including hotel operators, plan to be part of the deal.

The development, expected to cost in the tens of billions of U.S. dollars, is aimed at capitalizing on Dubai's tourism and real estate boom.

Nakheel says it has audacious designs for the site, split between land and sea. The company plans a new city center that will include one of the world's tallest skyscrapers, as well as a 45-mile canal cleaving the desert and a sweeping arc of man-made islands spilling far into the Gulf. The first phase — including the skyscraper and artificial islands — might be completed in around five years.

Nakheel's chief executive, Sultan bin Sulayem, told Dow Jones News Service he could not yet reveal the names of investors who had approached the company or give the estimated cost of the development until investment partners have been named.

Dubai, one of the seven constituents of the United Arab Emirates, has turned into a magnet for the wealthy as oil money has flowed in. In 2002, its shimmering developments helped further stimulate an already hot real estate market as Crown Prince Sheik Mohammed bin Rashid Al Maktoum issued a decree allowing foreigners to buy homes and apartments.

Since then the crown prince has called for further developments in a city already awash in building cranes and construction.

The projects include a $5 billion theme park, Dubailand, that will be the Middle East's largest tourism and entertainment complex, including shops, restaurants, rides and sports facilities. The attractions, somewhat reminiscent of the big U.S. theme parks, are to include Pharaoh's World, Dinosaur World and a futuristic Space Hotel.

With the Dubai Waterfront, Sheik Mohammed announced that the emirate will drop further restrictions on outside investment by allowing foreign developers a stake in the project. Nakheel will hold a majority share of 51 percent and offer 49 percent of the project to investors.

"For the first time, investors can partner with Nakheel and realize gains from land sales," said bin Sulayem, as quoted by Dow Jones.

Dubai, a backwater pearl-diving village until the late 1950s, has already been busy extending its 40-mile coastline by building a man-made archipelago covered in luxury homes, hotels and resorts.

Nakheel's four ongoing man-made island projects, costing a combined $14 billion, are the world's largest land reclamation efforts.

If the waterfront is built according to plans, it will consist of 170 square miles of water and land developments, an area 2 1/2 times the size of Washington, D.C.

The Palm Jumeirah, the first coastline project, set to be completed next year, is a palm-tree-shaped island group whose reclaimed land and sprawling concrete villas can already be seen rising above the water offshore.

A U.S. developer, Kerzner International, has announced plans to build a $1.1 billion, 2,000-room hotel complex on the Palm Jumeirah. The complex has been dubbed Atlantis, The Palm, and is expected to be similar to Kerzner's Atlantis, Paradise Island hotel complex in the Bahamas.

Another of Dubai's artificial archipelagos, the Palm Jebel Ali, will nearly be surrounded by the new islands from the Waterfront. The islands are expected to extend a few miles into the sea.