Euro crisis: Cash-strapped Italy sells off iconic lighthouses

They command stunning coastal views of one of the Mediterranean’s least spoiled islands, but now, as Italy’s new government attempts to chip away at the country’s €1.9 trillion ($2.5 trillion) debt, a clutch of abandoned but picturesque lighthouses on the island of Sardinia will be sold off.

The sale is part of the Italian government's efforts to balance the books by capitalizing on a valuable portfolio of state-owned property, from disused Army barracks to castles, former convents, and even islands. The lighthouses, which overlook the powder-white beaches and turquoise bays that have made Sardinia such a tourist magnet, are to be leased to private businesses and converted into unusual hotels, galleries, and museums. 

They are being offered for sale by the island’s autonomous government. Squeezed by the drastic cuts announced by Prime Minister Mario Monti, the sober technocrat appointed in November, the island's government can no longer afford the cost of maintaining the lighthouses, much less restoring them.

The buildings, most of them built in the 19th century, command views of some of Sardinia’s loveliest stretches of coastline, from the famed Maddalena archipelago, off the northeastern tip of the island, to the nearby Emerald Coast, where former premier Silvio Berlusconi has a luxury villa. They are no longer in use because they have been replaced by more modern automated lights.

“They have been inaccessible to the public for ages because they were owned and run by the Coast Guard or the Navy,” says Alessio Satta, the executive director of Sardinia’s Agency for Coastal Conservation, which is managing the sell-off.

“Some are in good condition and need just a little investment, while others are in a really bad state and would need a couple of million euros of refurbishment.”

The model for the sell-off is the Capo Spartivento lighthouse in southern Sardinia, which has been converted into a five-star luxury retreat. It is Italy’s first – and so far only – lighthouse hotel. 

The structure, 30 miles from the regional capital of Cagliari, sits on an isolated promontory overlooking deserted beaches and sandy bays and is accessible only by a private dirt road. Built in 1856 by the Italian Navy, it is now one of the country’s most exclusive resorts – in the summer, a suite with an ocean view costs €1,000 ($1,325) a night. Its six suites filled with Murano glass chandeliers and huge circular double beds.  

It took businessman Alessio Raggio seven years to negotiate the lease, restore the building, and convert it into a hotel. The conversion of the historic building cost €3 million ($4 million). Mr. Raggio has a 38-year lease on the property and pays €3,000 a month in rent to the regional government. 

“Rebuilding a lighthouse is not easy – especially one like this,” he says. “Fortunately it was strongly built, with stones from the local area, and the main building was in good condition. You have to be a little bit crazy to take on a job like this, but it was worth it – we are fully booked this summer,” he says.

The lighthouses on the for-lease list offer a similarly challenging prospect for developers. The lighthouse at Capo d’Orso (Bear Cape), near the town of Palau, is a typical case. Located on the very tip of the cape, it is accessible only by boat, or via a tough scramble up steep slopes overgrown with coastal scrub.

On the western side of the island, a lighthouse at Capo Mannu overlooks a good surfing beach, but the tower is in poor condition and will need a lot of structural work. Private developers would be granted leases of at least 30 years in return for restoring the buildings.

The tender process will start in the next few months, with suggestions that some of the lighthouses could be used as writers’ retreats, museums, or oceanography research centers. While all the lighthouses will include accommodation of one sort or another, the idea is to make them more affordable than the Capo Spartivento, with a nightly rate of between €100 and €150.

“We want to create places that can be visited by everybody,” says Mr. Satta. “We don’t want to create fortresses for the rich.”