2-5-2015 Challenge the future Delft University of Technology Lessons from Private Sector-led Urban Development Projects in the Netherlands & the UK | ERES

18-04-23

Challenge the future

DelftUniversity ofTechnology

Lessons from Private Sector-led Urban Development Projects in the Netherlands & the UK

| ERES Conference | Erwin Heurkens MSc.

2ERES 2012 – #211 – E.W.T.M. Heurkens | 22

Urban Development Projects

Private Sector-led Urban Development Projects

“An urban development project in which private actors take a leading role and public actors adopt a facilitating role to manage the development of an urban area, based on a formal public-private organizational role division.”


The State

The Market

IndividualismSelective Service Access

Inequality

CollectivismCollective Service Access

Equality

societal values

pow

er

Power &ValueShift?

Societal ContextSocietal value & State-Market power shift


Public: Local planning authorities

“Robert Moses time is no more”:

Decreasing financial means

Decreasing land for development

Decreasing labour capacity (& quality)

Private:Real estate developers

“Donald Trump time is no more”:

Economic & financial crisis

Decreasing investment (equity/loans)

More dependent on ‘real’ demand

Economic ContextEconomic crisis/transition


Theoretical Concepts

Planning & Market Concepts• Boelens et al. (2006): ‘Planning without government’

• Nadin et al. (2008): ‘Planning & development processes’

• Adams & Tiesdell (2010): ‘Planners as market actors’

• Van der Krabben (2011): ‘Facilitating government’

• De Zeeuw (2007): ‘Forward integration of market actors’

Organisational & Managerial Concepts• Bult-Spiering & Dewulf (2006): ‘Public-private partnerships’

• Osborne (2000): ‘Lack of management insights in partnerships’

• Klijn (2008): ‘It’s the management stupid’

• Mintzberg (2010): ‘Management is a domain of practitioners’

• Laglas (2011): ‘Collective project leadership’

• De Leeuw (2002): ‘Open systems-thinking’


Project Organization:Organizational arrangements

Financial arrangementsLegal arrangements

Development Process:Project ManagementProcess Management

Management InstrumentsManagement Resources

Project ContextEconomy & PoliticsUrban Governance

Spatial Planning System & Policies

InformationManagement

Measures

Information

Input Effects:

EffectivenessEfficiency

SpatialQuality

Management Measures

Conceptual Integrative Management Model

Urban DevelopmentProjects• Context

• Organization

• Management

• Effects

Objective:• Unravelling

complexity

• Understanding

mechanisms

• Understanding

management

• Not pure causal

relations


Management

Concept‘Management consist of any

type of direct influencing’

Management Activities• Project management

• Process management

Management Instruments• Management Resources

• Management Tools

Project Management Process Management

Management Tools Management Resources

Management Activities

Management Instruments

Initiating

Designing

Planning

Operating

Shaping

Regulating

Stimulating

Capacity Building

Negotiating

Decision-making

Communicating

Land

Capital

Knowledge


MethodologicalFramework

Systems ApproachPhilosophy

Concept Analytical Model based on Systems Approach

Case StudiesMethods Comparative Analysis Lesson-Drawing

Techniques Document reviews

DocumentedInformation

Analysis of project’s variables Context, Organization, Management & Effects

Comprehensive project-oriented understanding of public & private actor interaction

Data CollectionData Analysis &

Comparison

Aim

Aim

Aim Inspiration

Aim

Question 3. How do public & private actors manage private

sector-led urban development projects in:

3a. The Netherlands?3b. England?

4. What are the most important conditions for

managing private sector-led urban development projects

in:4a. The Netherlands?

4b. England?

5. What lessons can be drawn from these projects for the managerial roles of public & private actors in Dutch private sector-led

urban development?

Question 2. What kind model can be used to understand cooperative and managerial mechanisms?

Interviews/Survey Site Observations Mapping

Question

PhysicalUnderstanding

ComparativeAnalysis

Project Effects/Experiences

Question 1. Which philosophy is suitable to study complex urban development projects?

6. What information from professional/academic literature and case documents provide insight into

the project’s characteristics?

7. What are the empirical project

effects/experiences as conceived by the

actors involved?

8. How does the private sector-led

development project look like in physical

terms?

9. How can we compare the data retrieved from the

different case studies?

Research Question

What can we learn

from empirical

private sector-

led urban

development

projects in the

Netherlands &

the UK in terms

of the

collaborative

and managerial

roles of public

and private

actors, and the

effects of their

(inter)actions?


Amsterdam,Park de Meer

Den Haag,Ypenburg Dl.pl.20

Enschede,De Laares

Maassluis,Het Balkon

Middelburg,Mortiere

Naaldwijk,Woerdblok

Rotterdam,Nieuw Crooswijk

Tiburg,Koolhoven

Tilburg,Stappegoor

Tilburg,Wagnerplein

Utrecht,De Woerd

Velsen,Oud-IJmuiden


Management FunctionsManagement Measures

Project Management

Management Tools

Management Resources

Initiating Designing Planning Operating

Negotiating Decision-making Communicating

Shaping Regulating Stimulating

Land Capital Knowledge

Process Management

Capacity Building

PublicPrivate /Both

Private

Both

PrivatePrivate

Private

N/aN/aPublic

Both Both

Public

Both

Empirical Findings PSLUD Projects NLManagement


Organization•Intensive public-private collaboration on designs

•Public actors get financially involved (risks)

•Private actors show dependent attitude

Management•Public actors not ‘letting go’, no private design flexibility

•Public actors hardly use stimulating & capacity building tools

•Private actors rely on ‘hard’ management resources

Effects•Efficiency problematic

•Effectiveness & spatial quality achievable

Conclusions•Complex inner city areas are manageable with PSLUD

•Conditions: scale, duration, flexibility & competencies

Empirical Findings PSLUD Projects NL


Bristol Harbourside

13ERES 2012 – #211 – E.W.T.M. Heurkens | 22Liverpool One



Project Management

Management Tools






Process Management

Capacity building

Private /Public

Private

Private

Both

PrivatePrivate

Private

Public /n/a

Public /n/a

Public

Both Private

Public

Public

Empirical Findings PSLUD Projects UKManagement


Organization•Intense p-p collaboration: designs, (informal) partnerships

•Risk-avoiding public actors

•Long-term private commitment

Management•Public actors influence by variety of management measures

•Emphasis on negotiations & stimulating private actors

•Private actors manage community involvement & use active leadership

Effects•Efficiency problematic

•Effectiveness & quality achievable


•Conditions: scale, duration, flexibility, competencies & favourable market

Empirical Findings PSLUD Projects UK


Conclusions

GeneralComparisonNL-UK

Many similarities

Differences on:

•political influence

•planning policies

•role division

•risk division

•requirements

•public tools

NetherlandsAspect

Context Moderate political influence on project

Organization

Public-private-civic project relations blurry

England

High political influence on project

Public-private-civic project relations clear

Blurred task & responsibility division

Detailed requirements & rules

Strict task & responsibility division

General requirements / detailed rules

Risks & revenues mainly private Risk & revenues always private

Policies stable, certainty for project Changing policies, uncertainty for project

Management

Effects

Project management by both actors

Process management by both actors

Project management by private actors

Process management by both actors

Cooperation generally effective

Process hardly efficient

Public man. tools used unconsciously Public man. tools used consciously

Management resources private actors Management resources private actors

Spatial quality mostly satisfying

Cooperation generally effective

Process hardly efficient

Spatial quality mostly satisfying


Empirical Problems NL & Empirical Recommendations UK

•‘We against them relationship’ instead of a cooperative sphere

> Cooperating in pre-development stage to create public support &

commitment

•Lack of public role consistency during realization stage

> Respecting agreements, identify conditions for cooperation (in realization

stage)

•Thin line between public judgment and control of private plan proposals

> Defining clear process agreements about moments of control & discussion

•Commitment and competencies of public project managers

> Appointing public pm’s that connect the planning & development process

•Communication with and involvement of the local community

> Making a clear communication plan to involve communities & businesses

•Lack of public management in development process

> Searching for public opportunities to influence development without land

& capital

Conclusions (1)


InspirationalLessons UK>NL

•Not ‘less’ but ‘other’

public management

•Public & private

boundaries blur

•Public & private

attitude need change

•Private commitment

has public benefits

•Leadership happens

on different levels

•Facilitating complex

projects possible

Conclusions (2)

Inspirational Lessons UKEconomics & Politics

Likelihood of Transfer in relation to Dutch Context

GovernanceCulture

Planning System

Yes Yes Yes

Yes Yes Yes

Yes No Yes

No Yes Yes

No Yes Yes

Yes No Yes

Private Development Partner

Informal Public-Private Partnerships

Privately-owned Public Space

Long-term Private Development Investor

Public Funding Alternatives

Public & Private Leadership on Different Levels

Complex Private Inner-city Developments No No Yes

Public Management Toolbox Yes No Yes


SafeguardingPublic Interests

•Determining ‘the’

public interest difficult

(diversified society)

•Combine hierarchical,

market & network

mechanisms

•Use of negotiable &

non-negotiable public

safeguarding tools

•Apply within different

development/planning

process stages

Recommendations (1)

Initiative stage

Design stage

Realization stage

Operation stage

Land-use plan(non-negotiable)

Spatial quality plan(negotiable)

Contractual conditions(negotiable)

Developer contributions(negotiable)

Tender: spatial requirements(negotiable &

non-negotiable)

Planning permission(non-negotiable)

Development incentives(negotiable)

Performance indicators(negotiable)

Financial claims (non-negotiable)

Competitive dialogue (negotiable)

Private/civil ownership (negotiable)


Alternative (Private) Financing Instruments

Recommendations (2)

Investment Source

Investment Strategy

Development Incentive

Temporary Investment Grants

Lottery Funds

DBFM/Concession Light

Crowd Sourcing/Funding

Urban Development Trusts

Private Org. Requirements

Object Conditions/Requirements

Private

CivicPrivate

PublicPrivate

Civic

PublicPlanning policyFinancial reward

Civic functionsReal estate values

Financialcommitment

Shareholder ownership

Shared investmentLong-term operation

‘Problem’ areas

‘Public’ places

Small scale areas

Small scale areas /’Public’ places

Large scale /mixed-use areas

none in specific

Effective management

Public participation

Collaboration with other privates

Incorporating public objectives

Tax Increment Financing (TIF)

PublicFinancial/fiscal incentive

Redevelopment areas

Liability insurance for value decrease

BID Trusts PrivateShared investmentSecuring cash-flow

Retail, office, business areas

Collaboration with other privates


Impact for theory and practice

•It’s the management, stupid!

•It’s the market, stupid!

•Need to rethink State-Market relations

•Need to bridge theory-practice gap

•Need to understand real estate market decisions

•Need to educate planners and developers in skills &

attitude

•Need to apply new perspectives

To conclude


Contact details

Erwin Heurkens MSc.

Delft University of Technology

Faculty of Architecture

Department of Real Estate & Housing

Chair of Urban Area Development

E-mail: [email protected]

Twitter: eheurkens

23ERES 2012 – #211 – E.W.T.M. Heurkens | 22Seattle South Lake Union



Project Management

Management Tools






Process Management

Capacity building

PrivatePrivate

Private

Both

PrivatePrivate

Private

PrivateN/aPublic

Both Private

N/a

Private

Empirical Findings PSLUD Projects USAManagement


Organization•Less p-p Collaboration

•Risk-avoiding & understaffed public actor

•Long-term private commitment & de-risking

Management•Public actor manages by zoning regulations

•Private leadership on different levels/phases: true PSLUD project

Effects•Efficiency, effectiveness & spatial quality achievable


•Conditions: scale, duration, flexibility, competencies, phasing & demand-

driven

Empirical Findings PSLUD Projects USA

Documents

2-5-2015 Challenge the future Delft University of Technology Lessons from Private Sector-led Urban Development Projects in the Netherlands & the UK | ERES