Khaled Kenawi leans out of the window and surveys the battered concrete, the graffiti-daubed walls, the peeling posters and the teenagers lounging on the ripped-up sofas surrounded by beer bottles. 'Shutting down all this would be a huge loss,' he says. 'There is a difference between the art market and art, and we are that difference.'
For Kenawi is not talking about a depressed housing estate in some grim former East German suburb but Tacheles, the squatted artists' centre in Berlin's increasingly chic Mitte district, visited by hundreds of thousands of tourists each year. Tacheles may now be living its last weeks, threatened with closure or, at the very least, radical transformation if the property developer Fundus Group has its way. 'We will fight,' said AR Adler, one of the artists working at Tacheles. 'This is the last place left where you are free to be an artist.'
For nearly 20 years Tacheles - the name is derived from the word for frank speaking in Yiddish - has been one of the key locations for contemporary art and the countercultural scene in Berlin. A home to squatters during the anarchic years after the fall of the Berlin Wall - 'everything was possible back then,' says Kenawi, 49 - it has traced the city's own path through scruffy, lively, post-communist chic through to the tamer Berlin of today. Recently rock musicians such as Peaches have joined the artists in recording studios at the site. Donatella Versace used work by one of the Tacheles artists in a recent collection. 'It's like the New York scene in the Sixties,' said Amy Freed, 19, an American tourist.
Freed may be one of the last few through the poster-plastered doors. A decade ago the Berlin city council sold the land and building to developers who hope to turn it into luxury flats, an exclusive hotel and shops, while keeping some ill-defined 'cultural' role. The plan allowed the artists to pay a token annual rent of 40p to stay on the site, but it will expire at the end of the year.
Thomas Schingnitz, who is overseeing the venture, promised that Tacheles will remain 'a cultural institution', but the artists fear they will suffer the fate of other former squats in Berlin that have ended up as sanitised shopping malls with a few token art galleries. If the plan goes ahead, it is almost certain that they will be evicted. So they have been rallying allies. 'We have 20,000 signatures and support from around the world,' said Linda Cerna, of the co-operative association that runs Tacheles.
But backing has not been forthcoming from the city's left-wing council, which cut off public subsidies to the centre in 2002 on the basis that it was insufficiently 'cutting-edge'. 'If it is shut down, well, that's life,' said a spokesman for the Berlin Municipal Authority's cultural committee. 'Tacheles used to be a very exciting place with major cultural importance, but it isn't any more. Berlin's trademark is that the exciting places come and go. So what if Tacheles is in all the guidebooks? The guidebooks will have to be rewritten.'
Other famous squats in the city have also been under pressure. In the trailer park next to the 'Köpi' squat on Köpenicker Strasse, Kondek and his friends sat drinking. 'It will end one day,' said 29-year-old Kondek, who has lived in a caravan in the squat for five years when he is not travelling in Europe. 'The establishment don't like the way we think.'
Press reports in Germany have focused on the legal battles between the founders, squatters and artists. Few have much to do with the idealistic principles with which the squat was founded and instead largely focus on money. Many pit the co-operative association running Tacheles against the owner of the ground-floor Zapata bar, originally created to fund the artists' work. 'The idea was why bother spending our cash on beer in the bars outside when we could have our own bar and make money to allow us all to create, free from the constraints of the market,' said Kenawi.
But the Zapata bar has not paid rent or water charges to the Tacheles association for years. 'I do not want to support a capitalist dictatorship,' the bar's managing director Ludwig Eben said. 'I stopped paying rent when I understood I wasn't welcome.' There are also a host of property disputes with cafés that have been set up on land around the site which use Tacheles's utilities without paying.
Kenawi denied that the Tacheles association was 'commercialised'. He said: 'We just try to do things as efficiently as possible to save money. We have exhibitions, 30 artists paying minimal rent, a long waiting list for studios, a theatre. Show me where we have sold out.'
The battle for Tacheles's future is coming to a climax. The artists are putting forward their own plan for development, which includes revamping the Zapata, starting a Tacheles foundation, the formation of a limited company and the creation of a sculpture garden on the roof. The developers say they have yet to see the document, although Tacheles insists it has been sent. The artists hope that the developers will run out of money, and say that they are 'optimistic'.
There is a sense, however, that any transformation of Tacheles will reflect the changes in Berlin. Though the city remains one of the most interesting artistic and creative centres in Europe, it is becoming more mainstream every year. Formerly bohemian districts are swiftly becoming gentrified.
All, however, is not yet lost, locals say. 'Berlin is changing fast, but creative people can still find a place,' said Stefan Rother, a well-known photographer who has documented the evolution of the city for 20 years. 'At least for the moment.'