Rebuilding Stalled in Lisbon’s Charred Historic Quarter : Portugal: It’s been more than 2 years since fire swept the city’s soul. Disputes linger over how to proceed.

The fire began in a third-floor storeroom before dawn on a hot summer’s day. It burned for 10 hours through the center of Lisbon, claiming two lives, wiping out 2,000 jobs, destroying shops of old wood and fine silk, consuming memories of poets and empire, charring the city’s soul.

“Some values are irreplaceable. For Lisbon, the Chiado is one of them,” said Gonzalo Ribeiro Talles, an architect and former city councilman.

The historic hillside Chiado district burned on Aug. 25, 1988, Lisbon’s worst disaster since a 1755 earthquake devastated the Portuguese capital.

Deja vu.

Like their 18th-Century ancestors, Lisbon’s city fathers must rebuild the heart of one of Europe’s most singular capitals, a city whose colonial-tinged Old World flavor makes it as distinctive in its way as Paris or Rome.

While a temporary metal walkway leads visitors two stories high past the devastation of the $350-million fire, plans for the Chiado’s reconstruction proceed in a disconcerting blend of decisiveness and foot-shuffling. There is agreement on what should be done but, two years later, no spade has been turned to erase the fire’s scars.

After the earthquake, 235 years ago, the Marquis de Pombal supervised a planned reconstruction of the riverside downtown area. The old aristocrat’s long, oblong buildings with austere facades, precisely ranked like soldiers on parade, fill the so-called Baixa Pombalina, now Lisbon’s principal commercial center.

Adjoining the Baixa on a hill rising toward a lively neighborhood called the Bairro Alto is the Chiado, where 18 buildings in three square blocks were lost in the fire, among them two of the city’s biggest department stores.

The destroyed buildings, some dating to the 17th Century, were not always architecturally interesting, but they ranked nevertheless among the most famous and beloved in Portugal. Today they are simply surreal: old wrought-iron balconies and hand-carved stone window lintels with a roofless emptiness behind them.

“A city’s soul is the memories of its people. The last of the 19th and the early part of this century were the golden age for the Chiado,” said Fernando Costa, a municipal architect coordinating so far stillborn reconstruction plans.

In the days when Portugal presided over a giant overseas empire, what was murmured at the Chiado echoed across vast stretches of Africa and isolated bits of Portuguese Asia. The Chiado was the intellectual heart of Portugal, the meeting, drinking, eating and talking place of intellectuals, writers, poets, politicians; of men of affairs--business, national and imperial.

Named for 16th-Century resident Antonio Ribeiro Chiado, a modest poet but consummate man-about-town, the district gradually matured into a shoppers-and-strollers mecca housing some of Lisbon’s most old-fashioned but high-tone shops, boutiques, bookstores and cafes.

Like most big city downtowns, the Chiado suffered, though, from the outward growth of the city and the birth of shopping malls. Some buildings fell into disrepair. Others became helter-skelter storage areas. Nobody thought much about fire protection. By night, people hurried through it on their way from offices in the Baixa to bars and restaurants in the Bairro Alto. Hardly anybody lived there any more.

“The Chiado was a memory area. Some of the stores were not well-managed; there was a lot of decay. Still, there was a special ambience. The Chiado may not have been the best place to buy the cheapest or most modern things, but it remained a special center of the city,” said Carlos Castanheira, an associate of architect Alvaro Siza Vieira, who was chosen by Lisbon officials to design the reconstruction.

Siza Vieira is Portugal’s best-known architect, a designer of impeccable international credentials. His selection for the job short-circuited debate over the Chiado’s future between property owners, merchants, planners and city officials--traditionalists versus modernists--that was as much about politics and economics as aesthetics and urban planning.

Siza Vieira’s designs, approved by city and national governments, call for regenerating Lisbon’s historic heart with modern, fire-safe buildings rising behind the original facades, along streets with more public areas and open spaces. To lure residents back and assure safe street life at night, he proposes that the top one-third of buildings be reserved for apartments. Combined, the two old department stores would become a 150-room hotel linked to a shopping and cultural center.

Construction was to have started in October, but it now looks as though nothing will happen until early next year--if then. Cost is one problem. It is up to property owners to pay rebuilding costs. Cheap loans are available, but municipal architect Costa estimates that because of the nature of the restoration, building costs will be about three times the going rate in Portugal. There are difficulties getting disparate owners to agree on what should be done and when it should begin. A few want to build now, others to sell.

“It is very complicated; there is a lot of real estate speculation, and some laziness, too. People were anxious to get started and then somehow momentum was lost,” Castanheira said.

Talles, who thinks the Chiado reconstruction will work only if it is part of a larger redevelopment scheme also involving the Baixa, notes that the Siza Vieira proposal has not yet been formally promulgated by the government. Behind the surface, “quiet pressures” against the plan are enormous, he says.

“Many people don’t like the idea of housing: Shops and offices make more money. Some want to rebuild the old buildings higher than they were. Others want an open door to develop as they see fit. As long as the law is not published, there is always a chance for changes, so nothing is done,” Talles said. “I’d say that if the decree is not published by early next year, it’ll take another fire to get things moving again.”