REYKJAVIK, Iceland \u2014 Set against a vista of sea and mountains, the city\u2019s modern concert hall and convention center, with its kaleidoscopic facade of multicolored glass, averages more than 140,000 visitors each month.<\/p>\n
The thriving complex, which hosts fans of Bj\u00f6rk and enthusiasts of yo-yoing, is a symbol of how the country has recovered from the economic crisis, aided by tourists, whose appreciation for Iceland<\/a> and whose influx of cash are further helping to spur development.<\/p>\n Outside the center, construction vehicles hum, working on a project that will join the event space downtown with the heart of this capital city\u2019s center, where restaurants and shopping abound. It is one of several projects in a nearly 680,000-square-foot mixed-use development known as the Harpa plot, or Austurhofn, meaning East Harbor. This vast area has been decades in the making and is an attempt to transform the neighborhood into a live-work-play area.<\/p>\n <\/p>\n \u201cThis has been a big black hole since 2008,\u201d said the Icelandic architect Asgeir Asgeirsson. \u201cBut now we are helping bring new life to downtown.\u201d<\/p>\n Construction of the Harpa concert hall and convention center in Reykjavik<\/a>began in 2007, but screeched to a halt as Iceland\u2019s economy faltered during the global financial crisis. In 2011, the complex finally opened. A regular comedy routine performed there teaches \u201cHow to Become Icelandic in 60 Minutes<\/a>.\u201d And next summer, the International Yo-Yo Federation will host its annual competition<\/a> at the site.<\/p>\n Mr. Asgeirsson, with his architectural firm T.ar<\/a>k, is now helping to better link Harpa with Reykjavik\u2019s historic downtown, less than half a mile southeast, where places like Caf\u00e9 Loki draw visitors for Icelandic delicacies, including dried fish and sheep\u2019s head jelly. Long lines form at the city\u2019s many hot dog stands, which sell the beloved lamb-based Icelandic dog topped with sauces and fried onions. Clothing stores sell a range of gear to handle the island\u2019s quick-changing weather, like traditional Nordic sweaters made from local wool.<\/p>\n The new project, which T.ark and Mr. Asgeirsson are helping design, will include more than 355,000 square feet of retail and apartments, and a hotel. The upscale Edition hotel is owned and developed by the Boston-based Carpenter & Company, with the design partner Ian Schrager, and will be managed by Marriott.<\/p>\n Riding on Iceland\u2019s recovery, the development of the rest of East Harbor is finally moving ahead. The turnaround is a relief for the country, whose three major banks went under in quick succession and whose currency, the krona, tumbled in the global downturn. Shortly after, the government issued capital controls to prevent money from leaving Iceland and further devaluation of the krona.<\/p>\n A big driver of this project and the larger construction boom in Iceland has been the deluge of tourists, who have helped Iceland bounce back<\/a> much more quickly than some of its European neighbors like Greece<\/a> and Italy<\/a>. In 2009, Iceland, then a country of about 320,000, had 494,000 visitors, according to the Icelandic Tourist Board. In 2015, nearly 1.3 million people visited, and more than 1.6 million visitors are expected by the end of this year, according to Islandsbanki Research.<\/p>\n Promotions by Icelandair offering free layovers in Reykjavik on the way to Europe<\/a>; the popularity of the television series \u201cGame of Thrones,\u201d which has filmed in Iceland; and the eruption of a major volcano in 2010<\/a>, which brought spectacular photos into the mainstream and counterintuitively drew positive attention from travelers, have played a part in putting the country on the map for tourists. They come to explore the landscape, venture into volcanoes, clamber atop glaciers and dip into steaming geothermal<\/a> lagoons.<\/p>\n Reykjavik draws tourists, said the mayor, Dagur B. Eggertsson, because of its \u201cpeople, culture, free-spirited atmosphere and for being one of the safest cities in the world.\u201d<\/p>\n Commercial real estate construction has raced to keep up with demand. The number of hotel and guesthouse rooms in Iceland increased 42 percent between 2010 and 2015, according to Statistics Iceland. But that has not been enough to accommodate the crowds. Many locals have leapt into the tourism business to fill the gap. Between December 2014 and November 2015, the number of Airbnb accommodations in Reykjavik jumped 126 percent, according to a report from Islandsbanki Research.<\/p>\n Icelandic pension funds have recently played a role in stoking commercial real estate. Unable to invest abroad since 2008 because of the capital controls, pension plans are now the largest investors in Iceland, and they are among the biggest shareholders in the commercial real estate companies that are listed on the stock exchange.<\/p>\n