Carlos Carvalho, who owns 6m square metres of land in Barra, home of the Olympic Park, wants to create a ‘city of the elite, of good taste’

The medal winners of the 2016 Rio de Janeiro Games will not be known for another 12 months, but there is already a clear frontrunner in the race for Olympic gold.

Brazilian property tycoon Carlos Carvalho is not as famous as Usain Bolt, Mo Farah or Serena Williams. In fact, few have heard his name even in his home country, but this sprightly 91-year-old businessman is on course to profit from the mega-event like no other individual in the history of the Games.

With land holdings of at least 6m square metres – equivalent to about 8,000 football pitches – in and around the main Olympic site at Barra da Tijuca, Carvalho has seen his wealth surge since Rio was chosen as the host city in 2009, thanks to what he describes as the “billion-dollar jump” of Games-related, publicly funded development.

This has already propelled him into the higher echelons of the global rich, but he has still more at stake with a near-$1bn (£640m) investment in the athletes’ village and the Olympic Park, parts of which will be sold off after the Games as luxury housing. He also recently built a 3,000-room, five-star hotel on a nearby plot of his land, which is slated for theatres, universities and 100-metre wide boulevards that, he says, “will be the envy of New York”.

With the Brazilian economy now facing its sharpest decline in more than 20 years, continued profits are by no means guaranteed. But Carvalho says that in the long term, he expects his investment not just to pay off lucratively, but to reshape the city.

Facebook Twitter Pinterest Carlos Carvalho with a map of the area around the Olympic Park in Rio. Photograph: Jonathan Watts/The Guardian

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His vision – sketched out in an interview with the Guardian – is for Barra (this is the place name in all International Olympic Committee documents, though the location is actually in the neighbouring district of Jacarepaguá) to become home to a “noble” elite, cleared of poor communities, and ultimately destined as the centre of a “beautiful new Rio de Janeiro”.

This is likely to stir up a heated debate. Brazil is one of the world’s most unequal nations. Poverty and homelessness are serious problems. The use of the Games to create a new home for the privileged is not what the IOC is supposed to be referring to when it talks about a legacy. Questions are already being asked about whether the huge government infrastructure spending for the event is disproportionately benefiting a handful of already very rich landowners and developers such as Carvalho.

Speaking at the headquarters of his company Carvalho Hosken, he said he is prepared for a backlash once the public and the IOC realises just how upscale the Ilha Pura athletes’ village will be compared with previous Games.

Carvalho said: “I have the impression this will be controversial. Since the work isn’t finished, they have the idea that everything is fine just because the buildings are ready. But they haven’t been able to see what will happen from now until the end. The gardens that are planned for the inside will be at a level that only kings have previously had.”

The site is now 70% complete, but glossy brochures and a promotional video show how it will look next year with stunning coastal vistas, swimming pools, an artificial lake and 70,000 square metres of tropical gardens and parks beside the Jacarepaguá lagoon.

Facebook Twitter Pinterest Construction of Olympic venues in Barra. Photograph: Matthew Stockman/Getty Images

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The contrast with the London Olympics is stark. While the 2012 hosts used the Games to rejuvenate the run-down East End and build comparatively modest housing, Rio is taking a brownfield site and developing it for a high-end market.

This is not the entire story. Other Olympic venues are being built or refurbished in the less affluent districts around Deodoro, the Sambadrome and the Maracanã, but the bulk of the new construction is in Barra on land owned or developed by Carvalho Hosken and its partners.

Carvalho insists the quality of the accommodation must match the tone of a valuable, privileged area.

Sitting across from a bust of Napoleon and next to a wall-sized map of Barra, he said: “We think that if the standards were lowered, we would be taking away from what the city – the new city – could represent on the global scene as a city of the elite, of good taste. Ilha Pura could not scratch this destiny that has been given to the region. For this reason, it needed to be noble housing, not housing for the poor.”

Transforming Barra into the centre of a modern, new Rio is at the heart of Carvalho’s long-term strategy.

Facebook Twitter Pinterest Luxury flats overlooking the Rio Olympic Arena. Photograph: Sowersby/REX Shutterstock

With an impressive display of foresight, he bought a 10m square metre tract of land in 1973 on the western edge of Barra overlapping Jacarepaguá, which was then a sparsely populated swamp, forest and abandoned coffee plantation. He was inspired by the urban planner Lúcio Costa, who drew up a masterplan for Rio that correctly envisaged the city spreading west along the coast and predicted that Barra would one day be its hub.

In the 42 years that followed, the growth of Barra has been spectacularly profitable. Carvalho said: “It has been exponential. Like owning an oil well right on the surface.”

He was one of three major landholders to benefit, alongside Tjong Hiong Oei, a Singaporean (now deceased) who built the shopping malls and tower blocks along the district’s central thoroughfare – the Avenida das Americas – and Pasquale Mauro, an 88-year-old Italian.

The development of the western zone is far from universally popular. Traditionalists view Barra as a tacky eyesore. While most of the tourist images of Rio de Janeiro focus on the beauty of the natural landscape, antique mosaic pavements, teeming favelas and European colonial architecture, Barra has wide straight roads, giant shopping malls and gated condominium blocks that echo Miami or Los Angeles rather than Lisbon or Porto.

But supporters say this is the future; that Rio needs to attract more wealth in order to generate more jobs. The Olympics has helped them. The IOC initially rejected Rio’s bid for the 2012 Games, that would have been held in the more run-down areas of the Ilha do Governador. However, in 2009 it approved a revised bid for 2016 with Barra at its heart.



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That allowed the mayor, Eduardo Paes, who cut his political teeth in Barra, to direct tens of billions of reais in public funds for infrastructure investment to the western zone. Barra has since benefited from the extension of metro line four, upgraded highways and new rapid bus services (the TransOlímpica, TransOeste and TransCarioca), as well as more power lines, water pipes and sewage treatment facilities.



Carvalho said this accelerated Barra’s growth by 30 years: “The most difficult part of the development plan was the service infrastructure and the Olympics has brought that. It’s a billion-dollar jump.”

That may be a modest estimate. Laudimiro Cavalcanti, the director of the regional council of realtors, said property prices have risen higher in Barra than anywhere else in Brazil in recent years. Before the Olympics were awarded to Rio in 2009, the average value of a square metre of land was 3,000 reais, he said. Today, it is triple that amount, having increased twice as fast as other neighbourhoods in Rio (and about five times faster than London in the same period).



Carvalho Hosken is now valued at 15bn reais (£2.8bn), according to an article on the company’s website. This makes its founder one of the wealthiest men in the world. “There’s one stockholder and that’s me. To do something crazy, you have to do it alone,” he said. His children, who have a minority share, have also benefited.



Both Carvalho and Mauro are involved in Olympic projects. Carvalho Hosken is a 50-50 partner with Odebrecht in the billion reais Ilha Pura development. They plan to profit through the sale of the 3,604 apartments for up to 1.5m reais each.

The company has also invested about 330m reais in the private-public partnership at the Olympic Park, which it hopes to recoup later by building more luxury condominiums on the site, a former racetrack.

Facebook Twitter Pinterest Residents of Vila Autódromo, a favela next to the Olympic Park, hang banners in protest at the demolition of homes. Photograph: Yasuyoshi Chiba/AFP/Getty Images

Part of this area is occupied by the Vila Autódromo community, a shanty town of fishermen and construction workers. Although the poor residents have legal ownership of their land, they are being pushed aside in the name of the Olympics.

Carvalho said: “They are going to housing at their standard. They have to go.” He argues that the lower social classes already have space to live on the periphery of the city, while the elite belong in the centre.



The process of relocation is being carried out by the municipal and state government authorities. The majority of residents have accepted compensation or been moved to alternative housing about 1km away. Those who tried to stay have fared less well. At least six Vila Autódromo residents have been wounded in demolition operations backed by police using batons, teargas and rubber bullets.



The order to drive them from their homes was issued earlier this year by the mayor. Carvalho said Paes has helped him. The support has been reciprocated.



During his re-election campaign in 2012, Paes and his party – the Brazilian Democratic Movement (PMDB) – declared at least 1.14m reais in campaign donations from Carvalho and Cyrela, another Barra developer that is linked to Mauro and has luxury apartments on the perimeter of the Olympic golf course.

Within three months of winning a second term, the mayor changed building codes in the Olympic Park area, raising the maximum height of tower blocks from 12 to 18 floors. In return, Carvalho Hosken agreed to donate some of its land and to shoulder the cost with its partners of the $480m Games media and broadcasting centres.

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In one sense this was ingenious deal-making. By attracting private investment, the city is getting an Olympic Games at less than half price. In contrast to the billions of government funds squandered on World Cup facilities, only 43% of the 38bn reais cost of the Olympics is being paid for with taxpayers’ money.

But critics say the ties between politicians and businessmen are too cosy and the benefits excessive. Paulo Ramos, a member of the opposition Socialism and Liberty party (PSOL), has no doubt who will profit most from the Olympics: “The contractors – Carvalho Hosken and Odebrecht. He said he believed “Barra is a scandal.”

The wider context – involving matters unrelated to the Olympic park development – helps explain why some are suspicious. In the past year, there has been a tsunami of revelations of alleged widespread and illegal collusion between politicians and businessmen, casting a shadow on all major projects. Carvalho Hosken has not been implicated, but its two partners in the Olympic Park developments – the construction firms Odebrecht and Andrade Gutierrez – are separately under investigation in the biggest bribery and kickback scandal in Brazil’s history, operation Lava Jato, which is looking into accusations of wrongdoing at the oil company Petrobras.

Following complaints by environmental campaigners, the Rio public prosecutor’s office has launched an investigation into possible excessive profits from the Olympic golf course, in which Mauro is a major investor.

In a document outlining the investigation, the prosecutor’s office said that it was looking into claims that “there is a glaring disproportion between the earnings of the owner and the amount the municipal government is losing or failing to earn.”

Facebook Twitter Pinterest High-rise buildings in the Marapendi area of Rio, which will be home to a golf area for the Games. Photograph: Carlos Cazalis/Corbis

After winning re-election, Paes allowed the golf course to encroach upon a 58,500 square metre area of the Marapendi municipal natural park. The city said it would offset the lost parkland by creating an even bigger natural area nearby.

Conservationists claim this is an environmental crime and that the developers will benefit excessively because the course will only cost 60m reais, but the potential profit from the change in building height limits in that area could be as much as 1bn reais.



The developers and the Rio city government argue that they are working to put in place the infrastructure required for the Olympics at the most cost-effective way for taxpayers.

Paes told the Guardian: “By Brazilian law, it is legal for a candidate and political party to receive donations from private corporations. This fact has nothing to do with the work of the developers at the Olympic Park. Rio created public-private partnerships to run many Olympic projects, with the purpose of saving public resources. These kind of actions allow Rio to have an Olympic Games with more than half the projects funded by private money. This way, public money can be strongly invested in local projects, such as schools and clinics.”

He has also issued a 330-page rebuttal to criticism of the golf course expansion, saying it was the best option once the IOC decided that the sport should be reintroduced to the Games.

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Carvalho – who is not involved in the golf course – sees his activities in a noble light: contributing to the Olympics, helping the city modernise and realising an old dream to make Barra the heart of Rio. Although he has profited enormously so far, he also bears considerable risk. For the first time in seven years, Rio’s property prices fell in June.

So far, less than 10% of the Ilha Pura units have found buyers. Most of the rest have been taken off the market until demand recovers.



The developer says that, financially, he can afford to wait: “The biggest advantage I have is the certainty that it’ll be lucrative. The biggest challenge is getting the tone right.”

But when it comes to fully realising his grander ambitions, Carvalho is realistic: “I won’t see the climax, but I’m very happy that I am already seeing a great city within Barra da Tijuca.”

Like the IOC, he is clearly already thinking of his legacy. The next year or so will determine whether he is primarily remembered as the bold pioneer of a modern new Rio, the victim of a Brazilian economic meltdown, or the biggest beneficiary in history of an Olympic bonanza.

Additional research by Shanna Hanbury