With the help of foreign investment and local ingenuity, Hungary's capital, once known as the Paris of the East, is reinventing itself.
Martina Hoogland

At the epicenter of Budapest, where the subway lines and radial avenues intersect, lies a new park that almost nobody understands. A row of glass pavilions slashes across its lawn. Etched into the panes are vague architectural details—floor plans, cornices, window trim. In between the outlines are endlessly repeating strings of numbers: 1789194719982001.

They're years, and each one represents a new phase of construction on this Erzsébet Square park. Theimages are ghosts of buildings past. The city's centuries of foreign occupation, from the Bronze Ageto the Iron Curtain, have left behind a nearly illegible palimpsest of construction andreconstruction, and this site, with all its layers of rebuilding, is a microcosm of Budapest'scontinual architectural reinvention.

I have visited the city several times a year for nearly a decade; I lived there for four years in the nineties. I've tried to learn the bewildering language, which is related to no other tongue except Finnish and Estonian and some tribal dialects in western Siberia. Every time I think I've plumbed the depths of the place, something changes. And the city is becoming ever more welcoming to foreigners, as it morphs from Communist backwater to player on the world stage. Budapest is on the way to re-establishing itself as the Paris of the East, with only a few bumps in the road.

Before world war ii, Budapest was an essential stop on the Grand Tour. Its cultural buzz—the literary coffeehouses, the music created by Hungarian composers like Franz Liszt and Béla Bartók—was practically unrivaled in Europe. Attracting foreign investors in every sector, from oil to hotels, Budapest was a lively, polyglot city. Then, in 1948, Communism marooned it. Instead of being a magnet for émigrés, Hungary became best known as a starting point for refugees who went on to make careers elsewhere, people like Intel's Andrew S. Grove; Microsoft's former chief programmer, Charles Simonyi; the writers Kati Marton and George Lang; and billionaire investor George Soros.

The Communists, to their credit, didn't damage the cityscape much. Hungary always kept some distance from Moscow, in part due to the language barrier, and developed a relatively loose oppressive system fondly known as goulash Communism. That is, not every shop was forcibly nationalized, not every advertisement was forbidden, and not every dissenting word was censored. The Soviets also let the Hungarians rebuild after the war, the scars of which had left three-quarters of the city uninhabitable. Two landmarks from the 1890's standing on opposite sides ofthe Danube—a Beaux-Arts castle for the Hapsburgs and a Gothic parliament house modeled after London's—were carefully restored. On the avenues and waterfront, only a scant number of new buildings was allowed, though most were wretched concrete office and apartment blocks or garish glass-box hotels. Architects, however, respected the roofline, giving the city a uniformity of a half-dozen stories—justlike in Paris.

But goulash Communism never turned a profit. Since there was no incentive to fix up residential exteriors, century-old buildings, in styles from Art Nouveau to proto-Bauhaus, were neglected. When I lived in Budapest, nearly every street had at least one mournfully empty palace leaking onto thesidewalk, missing petals on its carved ornaments or heads on its cupids, kept from collapse by some timber props. Now my memories of "old" Budapest—that is, from the late nineties—feel less tangible every time I visit.

I lived just outside the Hapsburgs' castle, on a snaggletoothed residential lane of weedy, deserted lots inhabited by affectionate stray cats. I grew to love the prevailing somberness, the traces of pre-war boom times: the faded signs for defunct department stores, the surviving Belle Époque cafés with a few chipped, gilded bentwood chairs. Today, the town's prosperity is palpable everywhere.

In the past decade, foreign investors have pumped billions of dollars into the country for factories and high-tech outfits (with $1.1 billion coming from General Electric alone), taking advantage of cheap real estate and aggressive privatization. Next year, Hungary is slated to join the European Union, a move many Hungarians see as their closest alignment with the West since the Turks isolated the country in 1526. An American air base has been built 110 miles southwest of Budapest, and Hungarians—despite being dismissed by the French as "badly brought up"—supported the United States' plans to invade Iraq. The Hungarian currency, the forint, is strong; a few years ago it was sinking past 300 per dollar and seemed destined for a steady decline, but with countless homegrown entrepreneurs setting up businesses and inflation being held in check, it has since rebounded to the low 200's. Yet it's still hard to spend more than $30 for a memorable dinner, even in the trendy restaurants with psychedelic polka-dot walls or the boîtes with exact replicas of Belle Époque interiors.

Capitalists have made an obvious contribution to the city, though both foreign and domestic investors have nonetheless made aesthetic missteps. The city imposes height limits on new buildings but doesn't do much to control design or materials, which has resulted in block after block of cement-curtain walls. I cringe whenever I walk past a reflective-glass branch of the German-owned Astron Hotel chain, rising behind a wedding-cake-like 1896 theater near Parliament.

But then I remember what Budapest's hotels looked like just five years ago. When I lived there, I could safely recommend two kinds to visiting friends: either run-down older buildings on side streets, upholstered in nubby brown Communist-era fabrics, or circa-1975 cubes on the waterfront.(Multinational chains like Marriott and Hyatt took over many lots where the city's grandest hotels, built a hundred years ago, had once stood—all of them destroyed during the bombing raids of World War II.)

The latest hotels are largely foreign-owned, and housed mostly in vintage buildings, where a five-star room can still cost as little as $200. France's Novotel chain has claimed a 1911 Art Nouveau spire, whimsically striped in blue-gray ceramic curlicues, on heavily trafficked Rákóczi Út. The Japanese-owned Le Méridien Budapest occupies a balustrade-topped 1918 building beside Erzsébet Square park. The white stone shaft, originally the offices of an Italian insurance firm, was meant to evoke an Adriatic coastal cliff. Under Communism, it was gutted and turned into a police station. Now the interior is splashed with gilt on metal-filigree spiral staircases and sphinx-legged furniture. The German-owned Art'otel boutique, on Bem Rakpart, was fashioned from four 18th-century Baroque fishermen's cottages near the Hapsburgs' castle, and reimagined in 2000 by American artist Donald Sultan. Paintings depict butterflies and buttons; domino and sewing-thread patterns course through the carpets; metal blackbirds sit high on the walls as if ready to break out in song.

It seems as though every major investor-nation is setting up a Budapest hotel. Even Libya: its Corinthia chain just reopened the Grand Hotel Royal, on a ring road near Andrássy Út, an avenue often compared to the Champs-Élysées. The building's block-long 1896 mansard was shattered during World War II, and again by a fire in 1956. It's now an extravaganza of Art Nouveau Revival, with butterfly-pattern reliefs (based on Hungarian folk traditions) around the lobby columns and gilded nymphs on the stair rails. Soon it will have an Italian neighbor, a Boscolo New York Palace, and, this summer, a Canadian one, when a Four Seasons opens in an Art Nouveau jewel on the Danube, originally a branch of an English insurance company when it was built in 1904. Its sinuous towers are banded in gold mosaic, and its staircases are illuminated by stained-glass portraits of 19th-century Hungarian heroes. Many of the riverfront rooms will be furnished with Central European antiques and have views across thesmooth, six-story skyline.

Budapest's new restaurants, like its hotels, have brought high-style design to shabby older structures, and are adopting international dishes. What a fossil I am, to remember when the city's menus consisted of chicken paprikás and cheese sauces. The wine lists had few selections, fromvineyards just brushing off state ownership, and the chairs were impossible-to-move simulations of medieval wooden thrones.

The foreign-owned restaurants are some of the most adventurous in the city. A Chinese dive near Andrássy Út has become Ópium, co-owned by American expat Jennifer Webster, who also runs a film production company in town. The walls are covered in Thai silks, and the menu is rich in Southeast Asian choices: lime-marinated minced beef, seared tuna tataki, sesame-fried bananas. David Seboek and Leora Levy-Seboek (he's a Hungarian-American from Rockland County, New York; she's Israeli) transformed a formerly dumpy student hangout just off Rákóczi Út into Baraka. Shirred white netting hangs from the ceiling, and the dishes blend Hungarian, French, and Asian touches: five-spice carrot-cream soup, seared goose liver with quince and crisp wontons, coconut-baked poached pears.

The 20 wine regions outside the city have also undergone a revival since I lived here, particularly the Tokaj region, near the Slovakian border. French, British, Spanish, German, and American investors there are helping to produce honey-cinnamon dessert wines based on 17th-century traditions largely forgotten under Communism. My favorite late-nineties restaurants, meanwhile, continue to thrive; thecity's freshest salads are still served by friendly waiters at Café Kör, on Sas Utca, near the Méridien. The bistro is painted a soothing ocher and furnished in bentwood—the interior is so beloved that regulars protested a few years ago when the owners installed air-conditioning vents.

When I moved to town, the red Soviet stars on the bridges and public buildings had just been taken down. With elections every four years since the last Soviet tanks rolled out more than a decade ago, the country's leadership has seesawed between left and right. Prime Minister Péter Medgyessy, an alleged ex-informant, now leads the Hungarian Socialist Party, which is partly made up of former Communists; the right's Young Democrats, headed up by Viktor Orbán, tend to be isolationist, jingoistic, borderline anti-Semitic. Each administration has tried to outshine its immediate predecessor by commissioning ever larger buildings or renovations, with mostly positive results.

The 1896 Venetian-Moorish theater on Rákóczi Út has become the state-owned Uránia cinema, with gilded archways. On my last visit, I almost forgot that this building used to be derelict, looming over pedestrians like a haunted fun house. A few blocks away, the Szabó Ervin Library, built in the 1880's as an aristocrat's rococo palace, was black with grime from Soviet-era car exhaust. Inside its salons, photocopying machines were jammed up against delicate boiserie. Now the façade gleams white, and the salons have been regilded and furnished in velvety armchairs. I used to feel sorry for the place, but these days I linger happily there, reading through piles of International Herald Tribunes.

Other public centers are undergoing restorations, such as the National Museum—a colonnaded temple with brightly frescoed galleries—and the Liszt Ferenc Academy of Music, whose iridescent Art Nouveau tiles are being patched and polished. The government has adapted the polluted grounds of an 1890's machine factory, on Fény Utca, into Millenáris Park: its theaters, fountains, and airy exhibition halls arenow busy almost 24/7.

The Young Democrats' Victor Orbán commissioned the successful park in 2000. (Though it is still clouded by controversy: a few million dollars of its budget apparently went missing when he left office last year.) He also orchestrated the creation of a new National Theater, along the Danube at the southern edge of town. Critics are savaging the building for its poor sight lines and campy design; it's a disorienting mass of classical statuary, curving metalwork, and opalescent chandeliers.

Equally contentious is an Orbán-era museum called the House of Terror. An exposé of Communism's evils, it has been set within an 1880's neo-Renaissance town house on Andrássy Út. In the forties and fifties, the Communist secret police used the building as offices and interrogation rooms; now the House of Terror's four floors of galleries contain re-created torture chambers and walls hung with copies of coerced confessions. Video screens play raucous propaganda footage and interviews with survivors. Spotlights shine on luxury goods the police thugs enjoyed: shiny black cars, pressed uniforms, custom porcelain dinnerware. One corridor toward the end of this draining exhibition is lined with portraits of "victimizers," former officers or informants who, unlike the victims they accused of anti-government activity, are mostly still alive. Another room is devoted to filmed praise for Orbán himself.

The museum has been lauded as essential historical testimony, and dismissed as an act of political swagger. Medgyessy's government has cut the museum's budget; there was a rumor the place would be shut down altogether. There are already plans afoot to shrink the façade's billboard-sized sign: it reads TERROR in stencils, casting a pall on the elegant avenue.

But just when civic architecture seems hopelessly stalled in politics, Budapest changes again. Before the right-wingers left office, construction began alongside the vilified National Theater on a sleek glass-walled cultural complex with two performance halls and a contemporary art museum. Although the Young Democrats started the project, the Hungarian Socialist Party will finish it, in a rare act of collaboration. And maybe a stonecutter will come along someday and etch the walls, like those in Erzsébet Square, with dates of every phase of its evolution so far.

With its fast-changing cityscape of crumbling landmarks and constant renovations, Budapest can be difficult to navigate. Consider hiring a tour guide; one of the best in town is Kristin Faurest (36-209/582-545; www.firsteuropeanshipping.com), a longtime American expat.

Andrássy Hotel The 1937 façade is streamlined Bauhaus, and the 70 rooms are whimsically furnished with wrought-iron bedsteads and jewel-toned fabrics. Doubles from $225. 111 Andrássy Út; 800/525-4800 or 36-1/462-2100; www.andrassyhotel.com

Art'otel Budapest Doubles from $239. 16-19 Bem Rakpart; 36-1/487-9487; www.artotels.de

Four Seasons Hotel Gresham Palace Budapest Opens December 2003, 5-7 Roosevelt Tér; 800/332-3442 or 36-1/411-9000; www.fourseasons.com

Le Méridien Budapest Doubles from $258. 9-10 Erzsébet Tér; 800/543-4300 or 36-1/429-5500; www.lemeridien-budapest.com

Novotel Budapest Centrum Doubles from $142. 43-45 Rákóczi Út; 36-1/477-5300; www.novotel-bud-centrum.hu

Baraka Dinner for two $45. 12-14 Magyar Utca; 36-1/483-1355

Café Kör Dinner for two $66. 17 Sas Utca; 36-1/311-0053

Carlo's The plush crimson-and-purple boîte was formerly a Soviet-era coffeehouse; now it's an Italian-style bistro. Dinner for two $70. 30 Bem Rakpart; 36-1/488-0115

Hauer An eclectic pastry shop where display cases are cluttered with vintage ads, menus, and sweets. Dessert for two $6. 47-49 Rákóczi Út; 36-1/323-1476

M. This tiny hangout is popular with the intellectual crowd. Dinner for two $20. 48 Kertész Utca; 36-1/342-8991

Ópium Asian Bistro Dinner for two $40. 34 Király Utca; 36-1/413-2949

Tom-George The chicest spot in town has Op Art, shag carpets, and an eclectic menu of soups, sandwiches, and sushi. Dinner for two $65. 8 Október 6 Utca; 36-1/266-3525

Buena Vista Selections from Hungary’s recently revitalized wine regions are served in the rustic stone-walled wine bar. 4-5 Liszt Ferenc Tér; 36-1/344-6303; www.buena-vista.hu

Café 57 The country’s most sought-after DJ’s spin nightly. 57 Pusztaszeri Út; 36-1/325-6078

Municipal Zoo The newly restored circa-1866 animal habitats include a multidomed elephant house and a glass-enclosed palm house engineered by Gustave Eiffel’s firm. 6-12 Állatkerti Körút; 36-1/363-3710; www.zoobudapest.com

Mai Manó Hungarian House of Photography Galleries display images by Hungarian pioneers of modern photography: Kertész, Brassaï, and the Capa brothers. 20 Nagymezö UTCA; 36-1/473-2666; www.maimano.hu

Hungarian National Museum 14-16 Múzeum Körút; 36-1/338-2122; origo.hnm.hu

Szabó Ervin Library 1 Szabó Ervin Tér; 36-1/411-5000; www.fszek.hu

House of Terror 60 Andrássy Út; 36-1/374-2600; www.houseofterror.com

Uránia cinema 21 Rákóczi Út; 36-1/486-3400; www.urania-nf.hu

MEO Contemporary Art Collection A former tannery turned gallery showing Hungarian and foreign contemporary art. 4-6 József Attila Utca (újpest); 36-1/272-0876; www.meo.org.hu

Millenáris Park 20-22 Fény Utca; 36-1/438-5335; www.millenaris.hu

Liszt Ferenc Academy of Music 8 Liszt Ferenc tér; 36-1/462-4600; www.musicacademy.hu

Ópium Asian Bistro

M. Restaurant

This French-influenced bistro, located not far from the Academy of Music, is purposely nondescript. With just a table or two visible on its charming main floor — more seating lies upstairs — M Restaurant is unassuming to the extreme. (The restaurant goes undetected by most tourists, attracting a locals crowd heavy on students.) Plain brown paper adorns the tables and walls, while colorful sketches and water carafes on the tables contributing to the little eatery's artsy feel. The menu changes daily, favoring hearty Hungarian fare with French overtones.


Cafe Kor

Initially a tiny bar, this stylish bistro that's popular with locals now occupies an expansive space in Budapest's hopping 5th District. Attracting students, ex-pats, and upscale natives, Cafe Kor feels pleasantly Mediterranean in its orange hues and bentwood furnishings. (The interior decor inspires such devotion there was formal protest when the proprietors recently installed AC vents.) The menu favors fare lighter than is typical in Central Europe: the carpaccio, steamed leg of veal, and grilled ewe-cheese salad receive consistently high marks from the natives.


Ground zero for Budapest's in-crowd, this hip eatery in the city's vibrant downtown melds sophisticated cuisine with a hopping bar scene. Recently reimagined as an Italian restaurant, Tom-George has an open fireplace, and a killer city view. The menu includes pastas and pizzas, which are prepared in view of patrons, along with fusion dishes influenced by a variety of cultures. Kobe beef, sushi, Hungarian goulash, and even Indian curries can all be found on the menu.

Baraka, Budapest

A unique take on fine dining, this glamorous eatery in Hotel Andrássy was opened by Hungarian chef Viktor Segal and his Israeli partner, Baraka and was among the first restaurants to offer Western-style haute cuisine in Budapest. Low lights, black tables, and crystal chandeliers converge in a dining area. Asian-influenced dishes dominate the menu, but there are also creative regional selections that are heavy on seasonal ingredients (like poached Atlantic cod and caramelized Belgian endive with peaches). The restaurant's outside terrace provides views of Andrássy út and Heroes Square.

Four Seasons Hotel Gresham Palace

Landmarked 179-room Art Nouveau masterpiece (gold mosaic towers; 19th-century stained-glass portraits; winter gardens) at the base of the Chain Bridge and a short walk from Vaci Street.

Le Méridien Budapest

Just a five-minute stroll from the Danube, this five-star boutique hotel occupying the 1918 Adria Palace is within shouting distance of Budapest's most iconic sights: the Hungarian Parliament, Buda Castle, and Chain Bridge are all nearby. Tough to beat for ambiance, this hotel named one of the world's 500 best (Travel + Leisure) has an entrance hall and atrium befitting the former castle it occupies. Doric columns, marble flooring, and stained glass reign in Le Meridien's magnificent common areas housing a French restaurant and a ritzy bar. The 218 guest rooms meld Art Deco décor with five-star amenities.

Novotel Budapest Centrum

Once home to the Palace Hotel, this restored landmark property occupies a 1911 Art Nouveau building not far from the Hungarian Opera House. Fully renovated and reopened in 2002, the Novatel Centrrum pays homage to its early-20th-century roots in preserved architectural flourishes like the Palace Hotel stenciling on the building's facade and the sumptuously restored Art Nouveau lobby (not to mention the historic on-site eatery, Cafe Palace). The hotel's 227 guest rooms are well-appointed, but only the lobby, cafe, and Klimt Bar are all done in period decor.

Mamaison Hotel Andrássy

At home on the city's most prestigious avenue, this five-star boutique hotel dating to 1937 was constructed in an eye-catching Bauhaus style. Renovated a decade ago and refreshed in 2007, the Mamaison combines luxury and a central location — Heroes Square, the Museum of Fine Arts, and the government district are all nearby — with a period look and feel. The hotel's 70 guest rooms, lobby, and award-winning restaurant (Baraka) embody the best of the Art Deco style. Etched glass, mirrors, and wrought iron are incorporated in a design by celebrated architect and Olympic gold medalist, Alfred Hajos.