Context
Aðalstræti is one of Reykjavík's oldest streets. Relics had turned up on neighbouring plots between 1971 and 1975, so any new building there had to wait for the archaeologists. In the summer of 2000 the City of Reykjavík contracted with Minjavernd for a hotel on the Aðalstræti 14, 16 and 18 plots.
January 2001. The excavation began. Under the site lay a Viking Age longhouse, lived in from around 930 to 1000, and a wall fragment older than the 871 ±2 tephra layer left by an eruption in the Torfajökull area. It was the oldest known evidence of people living in Reykjavík.
The sighting
The ghost story comes from one voice. Jónas Þorsteinsson, a guide with Icelandic Haunted Sightseeing Walks, told it to the journalist Sindri Eldon, who wrote up the tour for The Reykjavík Grapevine on 16 June 2006.
According to the guide, the ghost "was set free during the construction of the hotel, which was around 2001". Someone "working on the construction of the Reykjavík Centrum Hotel" met it. The guide spoke of "pissed off Viking apparitions" and of the ghost "scaring the hell out of a bulldozer operator". The operator was never named. No one recorded what the figure looked like, how long it stayed, or what happened next.
The children of the hotel
The guide had a second claim. In the article's words, "the spectres of many children are said to haunt the hotel". No witnesses. No dates. Only a rule for knowing them when you see them. "A ghost will always crawl on just one elbow and one knee."
Aftermath
11 February 2003. The Reykjavík City Council approved the hotel and longhouse at Aðalstræti by 4 votes to none. Councillor Ólafur F. Magnússon objected that it was inappropriate to place Reykjavík's settlement farm in the basement of a privately owned hotel. In 2006 the Settlement Exhibition opened in that basement, run by the Reykjavík City Museum. Hotel Reykjavík Centrum stands above it, in a renovated building whose oldest part dates from 1764, with new buildings on either side in the likeness of Fjalakötturinn and Uppsalir.
No police, clergy, scientists or mediums ever looked into the ghost. No Icelandic press covered it in 2001. The archaeological record mentions nothing unusual on site, and the hotel has made no statement.
Explanations
Construction disturbing a buried presence is a staple of Icelandic folklore. The same tour told of a bulldozer moving an elf rock in a downtown playground so a house could be built without upsetting the elves. The guide also gave the tale a punchline. The released ghost, in this telling, woke a "Viking" spirit in Icelanders, who "have been going abroad a lot and buying foreign companies". Read that way, the story is satire of the business boom of the 2000s. Sindri Eldon called the whole tour "very weird".
Legacy
Today Wikipedia's list of reportedly haunted locations carries the story, firming the guide's "around 2001" into a plain 2001. One source. One witness. Five years between the event and the page. Yet the ground beneath the legend is real. The longhouse is still there, under the hotel, where the oldest traces of life in Reykjavík were found.
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