As the drivers of national economies, cities are arguably the most complex and influential locations in the world. Their densities, complicated and over-lapping land-uses, and diverse ownership patterns make them not only hubs of activity and innovation, but also management and investment challenges.
Although private investors may naturally be attracted to cities because of their inherent attributes, they can also be discouraged by preservation and conservation regulations, changes in leadership, confusion over public-private partnership structures, perceived national and city bureaucracy, and a lack of accessibility and accountability from the public sector. City centres can, therefore, either be a competitive asset, or, if they are not well managed, a liability. Consequently, cities must work to create an attractive environment for investors.
The question cities must answer however, if they are to successfully attract private investment is: what do investors want from cities?
1. Investors are looking to agree upon a common vision with the public sector as an essential means of building trust and mutual long term cooperation which defends against political change and competition.
Strong commitment is needed from both the public and private sectors if city centre development is going to be successful. Adherence to this strategy was one of the core principals which finally facilitated Corio NV’s refurbishment of 67,000 m2 of gross lettable land in the redevelopment of the Hoog Catharijne shopping centre, Utrecht. After several failed attempts at redevelopment, owing to a variety of issues which made long term planning impossible, the establishment of a formal partnership arrangement promoted cooperation amongst all stakeholders. The shopping centre has subsequently had a dramatic economic impact on the city, attracting over 26 million visitors each year, as well as creating a genuinely environmentally sound, cultural location.
2. Excellent infrastructure is essential in attracting private investment.
The Paris Metropolitan region, for example, already home to 679,000 companies, and at the heart of a market of 500 million consumers, has hampered its ability to compete with the world’s leading cities due to a poor transport network. Consequently, as part of the Grand Paris urban renewal plan, the City of Paris, the Regional Authority of the Île de France and the Île de France Mayoral Association are concerned with ensuring that the economic centres which make up the 8 counties within the Paris region are connected. The Paris region’s fifteen year transport strategy, with a budget of €32.4 billion, is intended to ensure that the region is in a far better position to attract investment, with a special focus on building on its incumbent status as Europe’s premier real estate investment location.
3. The private sector is more willing to invest in projects through levies if they can see the tangible value of their investments.
This can take a variety of forms, but in the case of Barcelona, companies are more likely to invest in the 22@ District in the future because they can see that the money which they must pay in levies and land transfers is being used to redevelop streets, create open spaces and install high speed internet.
Further credence is given to this argument by the case of the New West End Company (Business Improvement District), London. The Company is dedicated to the promotion of the district, delivering street management services, and funding public realm projects. With a budget of £34 million secured until 2013, the Company is supported and run by major retailers and property owners in the area. Again, the private sector is seeing a tangible return for payment of a BID levy.
The redevelopment of Amsterdam provides us with an excellent example of how livability can play an important role in attracting private investment. In a knowledge worker age, companies must ensure that the cities in which they invest are attractive to their future workforce. The city, for example, is currently redesigning Wibautstraat, one of the city centres’ major roads, and transforming it into a mixed-use development with a focus on the public realm, as well as creating 1,100 new homes, building a community school and re-housing the Hermitage Amsterdam Museum in the old Amstelhof care facility for the elderly; a “cultural hotspot” which has also helped to bring in further private investment.
Image: Flickr-Herve “Setaou” BRY