From Zollikon to Meilen: The Gold Coast Report (Balance Sheet) 2011*

Balance sheet article as PDF

Once a year it comes to a showdown. Every June, around 120 school football teams from Küsnacht, Erlenbach and Zumikon meet at the Heslibach sports ground to test their strength. The school games on Zurich’s Gold Coast – the “Schüeli” – are only superficially a football tournament. It is a battle between the middle class and multimillionaires. Will the rich pupils from the Küsnacht private school Lakeside win all the trophies again? Will their cheerleaders once again shine with their sophisticated choreography? Who has the best jersey? Who will drive up in the best SUV?

After kick-off, the battle rages, especially on the touchline: distinguished private bankers become furious when their junior doesn’t find the direct route to goal, high-blonde wives bicker at each other when the little ones crash into each other on the pitch, and the referee is loudly accused of bribery when he doesn’t whistle his own son to victory. “There are ugly scenes every time,” says someone who has been involved for years.

The “Schüeli” is one of the few occasions in the year when two worlds meet: the middle class from left and right of the train tracks – and the Gold Coast moneyed gentry from up on the hill. Paris has Neuilly-sur-Seine, Berlin has Dahlem, London has the Stockbroker Belt, Zurich has the Gold Coast – a luxury retreat just outside the city gates where the high earners enjoy life. Even if, from St. Gallen’s perspective, the Gold Coast extends to the upper end of the lake to Rapperswil: according to the strict definition, only the five municipalities of Zollikon, Küsnacht, Erlenbach, Herrliberg and Meilen are entitled to the title of “particularly valuable”. “The music plays right up to the ferry,” says Roger Bataillard, publisher of the Lake Zurich magazine “Seesicht”.

Four to five thousand francs per square meter of building land

The lake view is what makes this strip of land so attractive, as is the village character, the proximity to the city, the airport and nature. And of course the microclimate: meteorologically so mild that hemp palms and figs grow, fiscally so mild that accounts and vehicle fleets grow. Nevertheless, there is still enough left in the state coffers: tax revenue per person in the canton is 3730 francs – between Zollikon and Herrliberg it is over 10,000 francs. Canton-wide, one in fourteen taxpayers is a millionaire – on the Gold Coast it is one in five.

And more and more wealthy people want to settle in this privileged corner of the world: In the last decade, the population has risen by ten percent to just under 50,000. Among them are such prominent names as CS boss Brady Dougan, Adecco president Rolf Dörig, Migros grandee Dieter Berninghaus and Roche president Franz Humer. Since the zoning regulations were relaxed in 1995, there has been no stopping them: since then, the sunny slopes have been paved over, large plots of land have been divided up and flat houses have been built on top, old industrial villas have had to make way for modern terraced apartments made of concrete and glass. Property prices have exploded: Four to five thousand francs for a square meter of building land are common with a view of the lake, and for collector’s plots it can sometimes go up to double that. But: “This is nowhere near the price level of London, Moscow or Paris,” says Claude Ginesta, whose company has been brokering better and best locations on the Gold Coast since the Second World War.

Even the financial crisis has not changed the boom. Rolf Senti, CEO of interior design company Bagno Sasso, even noted a positive impact on his business. “The bathrooms have become even bigger since then.” After all, wealthy people, especially bankers, have wanted to be seen in public even less since the crisis and prefer to set up a top wellness oasis at home.

The result of this wet room cocooning: “We are planning bathrooms that are 30 to 40 percent larger than before the financial crisis.” 30 square meters for the master bathroom with sauna and steam bath are normal, next to it a ladies’ bathroom with bathtub and large dressing table, preferably 20 square meters and larger. Together with an appropriate number of guest toilets, the conventional solution costs from CHF 1,300,000. However, Senti’s customers prefer the “platinum standard” from CHF 250,000: “Then we only use the finest materials throughout, install the Rainsky shower head for CHF 40,000 and the wooden Ocean Shell bath shell for CHF 50,000”. One top customer equipped his Gold Coast villa with 13 wet rooms – “so that every child had their own bathroom”.

Young rich professionals flock to the Gold Coast

No sign of a crisis. The local retail trade, which relies heavily on the spending mood of the haute volée, has not reported any noticeable slump either. “The people who come to us are looking for something special, and it can’t be too cheap,” says Antonio Moreira from Moreira Gourmet House in Küsnacht. If 100 grams of meat costs less than seven francs, the Goldküstler become skeptical. Even in the depths of the crisis, sales have risen, says Moreira, and in 2010 they were even in double figures again. People are happy to treat themselves to a salmon cordon bleu filled with mozzarella and vegetables for 15 francs a piece or a bottle of Massetto from Tuscany, vintage 2006, for 650 francs. Migros and Coop have also adapted to their clientele: Nowhere else on their shelves is the density of “Selection” and “FineFood” products as high as here. Even truffles and foie gras are on offer.

No wonder, since 25 of the 70 richest residents of the canton reside on the Gold Coast. The recent abolition of flat-rate taxation has done little to change this: Just a handful of billionaires have turned their backs on the area – the foreign super-rich have always preferred to live on Lake Geneva. “The market has easily absorbed these properties,” says real estate agent Gerhard Walde from Walde & Partner. In addition, the noise of the southern approaches has made the neighboring communities of Zumikon, Zollikerberg, Gockhausen and Maur less attractive and further fueled the demand for Gold Coast properties. Once you have arrived here, you usually don’t move away again. At most for tax reasons to the even cheaper Diamond Coast in Wollerau, Freienbach or Feusisberg far up on the other side of the lake, like CS banker Marco Illi recently or Sulzer President Jürgen Dormann some time ago.

On the other hand, all the more young rich professionals, primarily from Germany, are flocking to the Gold Coast. Especially in the best locations. These include the Goldbach quarter in Küsnacht, where banker Martin Bisang and publisher Michael Ringier live. In Zumikon, it’s Goldhaldenstrasse or Schlossbergstrasse, home to banker Raymond Bär and financier Rumen Hranov. In Erlenbach, it’s the area around Pflugsteinstrasse and Hanggässli, home to Lindt boss Ernst Tanner and former CS boss Lukas Mühlemann. In Herrliberg, it is Wängirain and Aussichtsstrasse, where Christoph Blocher and travel king Hans Imholz reside. And of course, across all five municipalities, there are the properties on Seestrasse with even house numbers, such as those owned by retail king Beat Curti or fashionista Trudi Götz. Such lakeside properties come on the market no more than once or twice a year.

The Porsche Cayenne is frowned upon again

The most beautiful places are only available under the table, as the elite like to keep to themselves: DKSH boss Jürg Wolle took over his property in the best location in Erlenbach from ex-ABB boss Fred Kindle, for example. The Küsnacht villa of former Swiss Re boss Jacques Aigrain went to a member of the Brenninkmeijer clan (C&A) after he moved away. Marc Walder, head of Ringier Switzerland, found his new home in the north-east of Küsnacht with a CEO colleague from the Club zum Rennweg. Who is moving where is a popular gossip topic among the top 50,000 on the Gold Coast. Divorce stimulates business.

This applies all the more to divorces and separations: Urs Rohner, designated CS Chairman, lives with his new partner, Zurich Film Festival boss Nadja Schildknecht, in the Küsnacht villa of Lonnie Howell, CEO of Bank EFG. The liaison between Ronald Sauser, CEO of Sal. Oppenheim Switzerland, and ex-Miss Switzerland Silvia Affolter, Managing Director of Cityguide TV, is just as much a topic as the latest move by entrepreneur Philippe Gaydoul, who moved into his new Küsnacht villa in a prime forest location on his own, while his wife now lives in Zurich’s old town. For some, such stories are a scandal – for others, a blessing. “Divorces boost business,” says wet room specialist Rolf Senti: “First a couple builds the house, then when they separate, the husband moves out first, then the wife too. When the house is sold, the new owners always want to change everything straight away. In one case, we completely remodeled a house three times within ten years.”

People know each other, people observe each other – the social pressure is correspondingly high. A Range Rover or a Bentley is welcome as a gold coast tank, whereas the Porsche Cayenne is frowned upon again, and the BMW X5 is on the verge of being too ubiquitous. If you want to belong, you have to earn a reputation as a splendid host – publisher Jürg Marquard, Lukas Mühlemann and Falcon Bank boss Eduardo Leemann have always been well in the running, while the Jacobs’ glamor has faded a little since the death of family head Klaus J. Jacobs. They don’t usually do the cooking themselves, but the right catering van has to be on the doorstep when the guests arrive: Gamma is a bit out at the moment, but Gerard Franzoni is very popular, as is Maria Zehnder.

The kitchen team at the Club zum Rennweg also likes to be involved at home, as a good proportion of the membership, from IWC boss Georges Kern to ex-and-again-new banker Thomas Matter, live on the Gold Coast. And if not at home, then they meet up at one of the many Gold Coast hotspots or in Zurich – for example at Club Haute, the Opera or Bellevue-Globus.

“Kids of alpha animals are also alpha animals”

Learning and applying the code can be a real gauntlet for newcomers – and sometimes even annoys long-time Gold Coast shoppers: “I don’t want to shop at Migros Erlenbach anymore, I always have to put my make-up on first,” moans a Desperate Housewife who wishes to remain nameless. You don’t see the men anyway: they’re either earning money or on vacation. Their status is shown by their absence. Those who couldn’t afford the usual winter luxury getaway to Klosters, St. Moritz or Gstaad in the dark days of the crisis had to resort to drastic measures to avoid jeopardizing their reputation. “Seesicht” publisher Bataillard: “I know of families who literally barricaded themselves at home during the sports vacations. Anyone who stays at home during this time is considered a loser.”

Of course, the social pressure is strongest when it comes to the biggest status symbol of all: children. It starts at birth: “You have babies at the Hirslanden Clinic,” says one woman who recently had one. Later, they have to go to the right school – bilingual and private, of course, at a cost of 15,000 to 34,000 francs a year: “Many parents think that if you’ve made it to the Gold Coast, you have to make it to Lakeside School,” says a father of several children. Difficult when the institute on Seestrasse only has one class of 18 pupils per year and the waiting time is three to four years. At least there is an alternative with Terra Nova.

Things get difficult for those foreign managers who have to keep their kids on track for the international Baccalauréat. Then the only option on this side of the lake is the ICS a little further up the hill in Zumikon. With generous sponsorship, the Zurich financial groups ensure that the children of their expats are given preferential admission there – and that the others are left behind.

The pressure to perform is passed on from an early age: “The kids of alpha animals are also alpha animals,” says one of them, who belongs to this species himself. This is evident at the little ones’ birthday party: Who has the more elaborate party, the bigger cake, the funnier clown? The giveaway at the end is also important. Silver jewelry from Thomas Sabo is currently doing the job as a “gift” quite reliably. Very important: the parents have to throw the party themselves. Using an event agency is considered uncool.

The SVP is gaining strength in the traditional FDP stronghold

Otherwise, however, delegation takes place wherever possible. An army of cleaners, gardeners and nannies pours out of the Gold Coast’s suburban train and bus stations every day, taking care of the property, land and children. Room cosmetics in particular are a big issue: “It’s easier to find a CEO for a major bank on the Gold Coast than a good cleaning lady,” says Robert Ferfecki, head of Sotheby’s real estate in German-speaking Switzerland.

The all-round carefree industry also includes security guards, butlers, personal trainers and farmers who make their fields available as helipads. And, of course, animal keepers. Caroline Freytag, for example, has been working successfully as a full-time animal sitter in the area between Zollikon and Erlenbach since summer 2008. A demanding job: “You have to have a handle on alarm systems, appear serious and earn the trust of customers.” Freytag sees a huge gap in the market on the Gold Coast: “A high-quality, luxurious dog hotel would be a goldmine. But the dog really would have to be king there.”

The fact that the new upper class on the Gold Coast is being so aggressive with its wealth is causing irritation – and isolation – among the old-established, discreet Zwinglians. “The traditional families, the Bodmers, Hirzels and Guts, have retreated to their villas,” says one person who has been following developments for decades.

The political mood is also changing: “The Gold Coast is changing just like the rest of the canton,” says Gold Coast and FDP veteran Ulrich Bremi. In other words: The SVP is gaining strength in the traditional FDP stronghold. However, FDP people still officially hold the highest offices, acting as presidents in three of the five municipalities. It is the old families with their large landholdings, the farmers and craftsmen who pull the political strings. The newcomers hardly get involved – or at most when it comes to tax or school issues. They are seldom seen in the village, at most at the second obligatory social event after the “Schüeli”, the autumn Chilbi-Fescht in Zollikon, Küsnacht and Erlenbach.

The social corrective still works

In the past, say middle-class locals, the rich would have given something back to the village. Car importer Walter Frey, for example, opened his private coffers when the Küsnacht artificial ice rink needed a roof. Today the gold shines through absence. Despite many big names in the municipality, the Rotary Club of Küsnacht consists almost exclusively of local tradespeople.

Meanwhile, the middle class is thinning out more and more due to high property prices. In order to halt the trend towards a ghetto for the richest, various municipalities have now launched subsidized housing projects. At least the social corrective is still working: Russian oligarch Vasily Anisimov, for example, recently made himself unpopular in Küsnacht when he had a new magnificent villa built there (16 rooms, under-iridian wellness landscape, orangery) that did not fit in with the village’s image at all. The fact that he used large sums of money and pressure to persuade the neighbors to give him even more than the 5,000 square metres of land he had already acquired made matters even worse.

Too much. What is too much is too much, as real estate entrepreneur Adrian Bratschi had to realize. In the Küsnachter district of Itschnach, star architect Zaha Hadid designed a futuristic double villa with a total of 2,000 square meters of living space for him. Despite media hype about Brad Pitt’s alleged interest, the project (estimated sale price: 30 to 40 million) has not found a buyer for three and a half years. “If the building permit expires in 2012, we’ll leave it alone,” says Bratschi.

The Avalon project on Bergstrasse Küsnacht, an ultra-luxurious concrete and glass cube with 700 square meters of living space and an estimated market price of over 20 million, has died completely. The Gold Coast is not yet ready for such extravagances.

* This article is a transcript of the report published in BILANZ magazine.