Solidere, the company that rebuilt Beirut, seeks another generation

More than three decades after Solidere was handed extraordinary powers to rebuild the ruins of Beirut's civil war, Lebanon's government is preparing to decide whether the company that transformed the capital's historic centre should remain in control for another generation.

The cabinet is expected to consider on Friday a request by the Lebanese Company for the Development and Reconstruction of Beirut Central District, better known as Solidere, to amend its mandate to 75 years from its final incorporation in the 90s, effectively extending its lifespan until 2069. The proposal has reignited one of Lebanon's oldest post-war disputes, pitting promises of investment and unfinished reconstruction against accusations that the company had outlived its original purpose while continuing to benefit from exceptional privileges.

Solidere's current mandate, itself extended by the government in 2019, does not expire until 2029. Yet ministers are now being asked to revisit that decision three years before the company reaches its existing deadline.

According to the cabinet agenda, ministers will consider a request to reconsider a 2005 cabinet decision and ratify an extraordinary general assembly resolution approving the change to the company's duration. The proposal follows a request submitted to Prime Minister Nawaf Salam in January, before Solidere presented a "long-term vision" for completing and developing downtown Beirut, including new real estate projects, unfinished infrastructure and the management of its remaining assets.

The request reflects the reality that large parts of Beirut's central district remain unfinished after decades of political crises, economic collapse, and repeated wars. However, it also raises a more fundamental question of whether the private company created to rebuild downtown Beirut has become a permanent fixture of Lebanon's urban landscape rather than the temporary reconstruction vehicle originally envisaged.

When Solidere was established in 1994, Lebanon was emerging from a 15-year civil war that had left the historic heart of Beirut in ruins. The company was granted exceptional legal powers to consolidate thousands of fragmented properties into a single real estate company, compensate former owners with shares and oversee the reconstruction of the city centre.

Its original mandate envisaged liquidation after 25 years, with planning powers eventually returning to public authorities. That deadline was later extended to 2029.

Three decades later, urban planners argue that the conditions that justified those extraordinary powers no longer exist.

Possible paths for downtown Beirut

In a recent policy paper, researchers at Beirut Urban Lab noted that although Solidere had largely completed its role as reconstruction coordinator, it still controls around 1.35 million square metres of undeveloped land, allowing it to wait for more favourable market conditions while large sections of downtown remain inactive.

Beirut Urban Lab research director Mona Fawaz told The New Arab the latest request was unsurprising, noting that Solidere had also sought an early renewal before its current mandate was due to expire.

"Solidere approached the government with a request for a 40-year renewal. This is in line with the earlier extension that was granted a few years early, allowing the company to plan accordingly," she told The New Arab.

Fawaz said granting another four decades would signal that Lebanon intended to preserve the same economic model that had dominated since the civil war.

"Solidere embodies in many ways the rentier model of the post-civil war economy," she said. "The city's historic core, once Beirut's beating heart generating work, income and social mixity, became the property of a private company accountable to maximising shareholder profit rather than the common good of city dwellers."

She argued that despite receiving exceptional legal powers, tax exemptions and public concessions intended to stimulate productive investment, the company instead focused on speculative high-end real estate.

"It quickly limited its activities to speculative property investments in high-end housing, effectively building empty homes that serve as safety deposit boxes for rich investors," she said.

According to Fawaz, extending that model would run counter to Prime Minister Salam's stated economic reform agenda.

"The current government has declared repeatedly that it wants to shift the national economy outside of this rentier model. Any extension that prolongs the same business-as-usual will indicate that we will project the same failed practices of the past into the future," she said.

Rather than approving another 40-year mandate or dissolving the company outright, Fawaz said the government should pursue a gradual extension tied to measurable public obligations.

"A conditional and gradual extension that starts with a two-year extension during which the company demonstrates its goodwill by planting the parks it never completed, commissioning public parking and delivering other long-promised projects would be a good first step," she said. "The government can then consider further extensions gradually with a fixed timetable, but not 40 years."

She also argued that the state should begin transferring some of Solidere's powers back to Beirut Municipality, require a percentage of profits from future land sales to be reinvested into the city, and establish a timetable for disposing of the company's remaining 1.35 million square metres of land while preventing ownership from becoming even more concentrated.

Does the cabinet have authority to approve an extension?

But even before ministers weigh those competing visions for downtown Beirut, some lawyers argue the government may not have the legal authority to approve such an extension.

Kamal Safa, founder of Safa Law Firm, said the request had reached cabinet because there was insufficient political consensus in parliament to pass legislation extending Solidere's mandate.

"Unfortunately, the Solidere issue cannot really be approached purely from a legal perspective. It is purely a political decision," Safa told The New Arab. "When it becomes difficult to pass a law in parliament because there isn't sufficient consensus, they instead turn to the government and issue it through the cabinet by means of a decree."

Safa argued that, had there been sufficient parliamentary support, the measure would have been adopted through legislation rather than executive action, which he said was a "legal violation".

Others have also questioned whether the cabinet has the authority to approve such an extension, pointing to previous legal opinions and unsuccessful court challenges over the company's lifespan.

Saint Georges Hotel owner Fadi Khoury, an outspoken critic who famously refused to exchange his family's landmark seafront property for Solidere shares during Beirut's post-war reconstruction, has spent years challenging the company's mandate before Lebanon's State Shura Council.

"The shareholders have the right to vote on extending the company, but the Council of Ministers does not have that authority," Khoury told Al Jadeed TV on Wednesday. "That authority belongs to the law, and the law is issued by parliament."

Khoury also pointed to earlier legal opinions which argued that Solidere's original mandate should have expired in 2019, despite subsequent government decisions extending the company's lifespan.

The debate has also exposed long-standing tensions between Solidere and Beirut Municipality, despite the municipality being one of the company's shareholders.

Municipal officials say they were not consulted on the latest proposal and that they have been largely excluded from the company's governance for years. They say the municipality has not received annual financial statements, has not been invited to shareholder meetings, has no representative on the company's board and has repeatedly failed to obtain answers regarding the value of its shareholding, dividend payments or the status of projects promised to the city.

Safa said the lack of oversight extended beyond the municipality, arguing that effective control ultimately rests with a small bloc of shareholders.

"Once they own more than 51% of the shares, they determine the company's policies and its overall direction," he said, adding that "there are absolutely no safeguards. There are no guarantees, either for the public or for shareholders, when it comes to determining the company's policies."

The extension debate has also unfolded against an internal struggle for influence within the company. According to Lebanese media reports, disgraced banker Antoun Sehnaoui, one of Solidere's largest shareholders, has sought greater influence over the company, although the size of his holding remains disputed.

The renewed scrutiny comes just days after Lebanese authorities issued a search and investigation notice for Sehnaoui after hosting Israeli Prime Minister Benjamin Netanyahu at a private dinner in Washington, fuelling outrage in Lebanon as Israel continues its military campaign and occupation of parts of southern Lebanon

Property rights groups have also accused Solidere of seeking to prolong exceptional powers that were intended to be temporary and have vowed to challenge any extension through legal action and public mobilisation.

The Association of Rights Holders in Beirut Central District, which represents former property owners affected by the reconstruction, said it would oppose any renewal through "all legal means and public action", arguing that extending the company's mandate would further undermine the rights of original property owners.

Friday's cabinet meeting should ultimately determine whether Solidere has fulfilled the mission for which it was originally created.

"When Solidere was established, the main justification was the recovery of Beirut's role as a financial centre in the region," Fawaz told The New Arab. "Massive wealth was transferred from the hands of city dwellers into a single real estate company."

While Solidere had transformed parts of downtown Beirut, Fawaz notes that it had failed to deliver the broader public benefits that were used to justify those extraordinary powers.

"The reform needs to establish a new framework in which profit is recovered for the benefit of the city at large, not a few well-connected men," she said.