PowerPoint-Präsentation

PowerPoint-Präsentation

technische universitt dortmund External Benefits of Urban Real Estate Developments ERES Conference 2012 14th June 2012, Edinburgh Michael Nadler, Stefan Thiel TU Dortmund University Faculty of Urban & Regional Planning Chair of Real Estate Development 1 ERES 2012 technische universitt dortmund technische universitt dortmund Agenda Agenda EIBURS programme UDFs in Europe: Opportunities, Structures, Operations EIBURS Rationale Rationale for external benefits evidence based planning, intertemporal allocation of funds, property-led development Goal structure Systemisation Practical Goal structure for external benefits General principles, objectives, indicators Application Systemisation of external benefit indicators

Systemisation, measurable vs. non-measurable, 3 level controlling Conclusion and Outlook Practical application private urban development project: Le Quartier Central, Dsseldorf 2 ERES 2012 Conclusion and outlook technische universitt dortmund EIBURS: UDFs in Europe: Opportunities, Structures, Operations Starting point: Requirements of the JESSICA Initiative Agenda Art. 44 EC 1083/2006: urban development funds, that is, funds investing in public-private partnerships and other projects included in an integrated plan for sustainable urban development. EIBURS Step Rationale Goal structure Systemisation Our approach Method A Analysis of integrated planning instruments Formal (legally binding) versus informal instruments B Objectives of sustainable urban development planning (ex ante)

Systematisation of economic, ecological and social objectives C Indicators for sustainable urban development Supranational, national, regional and project level indicator catalogues D Operationalisation methods for sustainability indicators Direct versus indirect methods, quantitative versus qualitative E Project evaluation (ex ante and ex post) From Cost Benefit Analysis to an Integrated Controlling Methodology Practical Application Conclusion and Outlook 3 ERES 2012 technische universitt dortmund EIBURS: UDFs in Europe: Opportunities, Structures, Operations Agenda Contributions from OPs of SFs EIBURS Rationale Goal structure Systemisation UDF investment Leverage Practical

Application This could include contribution of land and buildings Conclusion and Outlook External/Social benefits Citizens Legend: Capital contributions or provision of guarantees Financial returns 4 ERES 2012 UDF-Projects should generate also an external/economic rate of return! Definition: external benefits = positive impact on welfare of 3rd parties technische universitt dortmund Rationale for external benefits: evidence based planning Agenda EIBURS Rationale Goal structure Systemisation Practical Application - Scientific-empirical foundation of decision-making in politics and planning Conclusion and Outlook - Well-established in EU evaluation policy: indicator based empirical analysis, best-practice, major pre-requisite for funding - evidence ex-post calls for consistent indicator set (comprehensive) - External benefits in this context: > knowledge of effects secures decision-making 5 ERES 2012

technische universitt dortmund Rationale for external benefits: intertemporal allocation of funds Initial case Agenda - private investment project in the context of urban development, e.g. infrastructure or real estate EIBURS - Public interest, expectation of external benefits Rationale Public perspective Goal structure external benefits Systemisation Practical Application Private perspective + - Conclusion and Outlook 6 planning ERES 2012 realisation commercialisation utilisation technische universitt dortmund Rationale for external benefits: intertemporal allocation of funds Initial case Agenda - private investment project in the context of urban development, e.g. infrastructure or real estate

EIBURS - Public interest, expectation of external benefits Rationale Goal structure Systemisation Practical Application Private perspective + - Conclusion and Outlook (Im-)material Public support* > Selection of suitable private investment projects 7 ERES 2012 *consideration of mandatory EU state-aid regulation technische universitt dortmund Agenda Rationale for external benefits: property-led development Property-led development is a concept that combines real estate development with sustainable (economic) urban development EIBURS - Private investment projects, mobilisation of private capital - large-scale brownfield redevelopments (critical size) Rationale - Creation of new markets Goal structure Systemisation - Attraction of solvent households and solid companies > Expectation of external benefits Cooperation with public authorities: Practical Application

- use of scope in land use planning settings, moderator/ promoter, investments in public infrastructure Conclusion and - material and immaterial support of private investors Outlook > Justification towards society > Indicator based transparency, derived from certain objectives 8 ERES 2012 technische universitt dortmund Goal structure for external benefits: General Principles in Urban Planning Relevant general principles Agenda - Sustainable Development (superior concept) EIBURS - Urbanity - Smart-Cities Rationale - European City Goal structure Systemisation Practical Application Conclusion and Outlook 9 ERES 2012 technische universitt dortmund Goal structure for external benefits: General Principles in Urban Planning Agenda The Smart Cities concept focuses on sustainable investments in

EIBURS - Human and social capital - Transport Rationale - Communication (ICT) Goal structure Systemisation - Low-carbon energy supply Main objectives: Practical - High quality of life Application - Intelligent management of natural resources Conclusion and Outlook - Participatory governance - Environment for innovations - Attraction of solvent households and solid companies 10 ERES 2012 technische universitt dortmund Goal structure for external benefits: General Principles in Urban Planning Agenda Leipzig Charta 2007: Sustainable development of the European City EIBURS - Human and social capital - Unique Cultural and architectural qualities Rationale - Strong forces of social inclusion

Goal structure - Exceptional possibilities for economic development BUT Systemisation - Demographic problems - Social inequality and exclusion Practical Application - Lack of affordable and suitable housing - Environmental deficits Conclusion and Main objectives: Outlook > Economic prosperity > Social balance > Healthy environment Instrument for implementation: 11 ERES 2012 integrated urban development concepts + projects technische universitt dortmund Goal structure for external benefits: General Principles in Urban Planning Deduction of goal structure according to general principles, Agenda 3 examples Urbanity, Smart City, European City EIBURS European City Superior level Economy

Ecology Society Rationale Objective Strengthening the economical base of municipalities Increase of environmental quality Creation of equal chances Goal structure Subordinated Objective Higher revenues from taxes Improvement of soil quality Strengthening of education Indicator Municipal share of income-, businessand real-estate taxes No. of decontaminated sites m of exchanged contaminated soil > real estate value No. of welfare recipients Municipal expenditures for social welfare Application Who? Municipalities

Citizens Land owners Citizens Municipality Conclusion and Where? Municipality Site Site periphery Urban district Municipality When? During investment Time-delayed after investment Directly after investment Time-delayed Time-delayed Systemisation Practical Outlook 12 ERES 2012 OBJECTIVE SUBORDINATED OBJECTIVE technische universitt dortmund Economy economical land management Agenda strengthening the economical base of municipalities EIBURS

improvement of the general conditions for companies INDICATOR Application mixture of living and working percentage of new soil sealing of the whole demand on sealed areas position of the location in the settlement structure use of Brownfields municipal investments in and conesequential costs infrastructure municipal costs for the modernisation of an area for a reuse municipal allotment of income-, business- and real estate-taxes sales revenue and increase in standard land values use of the potential for innovative businesses (demographic development) impact of the use on the location-security of neighboured companies number of new jobs General Principles Ecology maintenance of nature and environment Integrated Urban improvement of the municipal energy balance Planning increase of enviromental quality Practical Application Conclusion and Society Outlook resource-friendly control of mobility high-quality living environment and neighbourhood strengthening of urban design and maintenance culture 13 ERES 2012 removal of enviromental pollution by new use maintenance, cross-linking and creation of habitats maintenance, cross-linking and creation of green spaces maintenance and creation of private gardens use of solar energy (on rooftops and free spaces) use of geothermal energy and biomass connection to a district heating network connection to a local heating network strengthening of ecomobility low soil sealing prohibition of the drag-in of pollutants

exchange of contiminated soils maintenance of worth protecting soils impact of the use on (eco-)toxic immissions impact of the use on sound- and electromagnetic immissions impact of the use on emissions from freight transport maintenance or improvement of areas of fresh/cold air development/aisles agglomeration of building development connection to the municipal street network connection to the local public infrastructure connection of the bicylce network impact of the use on local supply impact of the use on local leisure areas protection of townscape's defining landmarks (including monument protection) impact of the on landscape impact of the use on image, quality and functionality of neighboured areas quality of urban development concepts as landmarks maintenance and improvement of town scape orientation on existent axes for important urban views consideration of topgraphy connection with existent neighbourhood by new ways quality of planned landscape adaptation on neighboured building development orientation on bulidling lines urbanistic quality technische universitt dortmund Systemisation of external benefits indicators Target setting Planning and rating Funding decision Ex-post analysis Agenda EIBURS District City Region State Rationale Fields of application Goal structure Place is s y

l a n A t i f ne INDICATOR e B t ) Cos (CBA Systemisation Practical Application Stakeholder Time Conclusion and Outlook 14 ERES 2012 Investors Citizens Municipality Politics StakeholderOrganisations Before During After technische universitt dortmund Systemisation of external benefits indicators: quantification Measurable vs. not measurable indicators Agenda Objective EIBURS Rationale Goal structure

Application Conclusion and Outlook not measurable monetary not monetary direct Systemisation Practical measurable Tax revenues (e.g. business-tax) Market prices (e.g. CO2 emissions) opportunity costs (e.g. reduced transport costs) hedonic prices (influence of independent variables on pivat price of goods, e.g. noise) 15 ERES 2012 qualitative indirect Quality of life Perception of environment technische universitt dortmund Systemisation of external benefits indicators: 3 level controlling Controlling is a method to assure logical reasoning in management decision through identification, reduction and elimination of deficits in skills or motivation of managers (Juergen Weber). > From our perspective CBA needs to be enlarged to an integrated three-stepcontrolling approach.

Agenda EIBURS Rationale number of projects Goal structure Systemisation learningeffect Practical Application Conclusion and Outlook screening Scoring (ranking) 1. Planning & rating projects by (non-monetary) sustainability indicators 16 ERES 2012 analysis of cash-flows and risks financialengineering asset-allocation (UDF-portfolios) 2. Ex ante monetary analysis for funding decision support (internal & external monetary effects) Monitoring / reporting 3. Ex post deviation analysis technische universitt dortmund Agenda Practical application: Le Quartier Central

Private investment project: Le Quartier Central, aurelis Real Estate GmbH und Co. KG EIBURS CBA (ex-ante) elaborated by BDO during project development Rationale Goal structure Systemisation > good database in regards to overall project costs > contract fixed the municipal cost share for the project development Focus on infrastructure follow-up costs and long-term fiscal benefits for the city of Dsseldorf Practical Application Economic analysis was a pilot within a certification process DGNB certification of sustainable urban development Conclusion and Outlook 17 ERES 2012 technische universitt dortmund 1. Structure of research approach 2. Analyses on Level 1 (macroeconomic) 3. Analyses on Level 2 (microeconomic) Rationale for external benefits Transformation in

a theoretical base Pre-Condition for further analysis Goal structure for external benefits Systemising external benefit indicators Applying external benefit indicators Consequences for Project Evaluation 4. Outlook on Further Research 18 ERES 2012 Transformation in a theoretical base: Theory of property-led development technische universitt dortmund 1. Structure of research approach 2. Analyses on Level 1 (macroeconomic) 3. Analyses on Level 2 (microeconomic) Rationale for external benefits Transformation in a theoretical base Pre-Condition for further analysis Goal structure for external benefits Systemising external benefit indicators Applying external benefit indicators Consequences for Project Evaluation 4. Outlook on Further Research 19 ERES 2012

Transformation in a theoretical base: Theory of property-led development technische universitt dortmund Agenda EIBURS Rationale Goal structure Systemisation Practical Application Conclusion and Outlook 20 Practical application: Le Quartier Central ERES 2012 Results from the municipal perspective > during project development > after project development technische universitt dortmund Practical application: Le Quartier Central Agenda EIBURS Results from the municipal perspective > fixed municipal expenses during project development > cash-flow shows break-even in 2017 Rationale Le

LeQuartier QuartierCentral Central Goal structure Systemisation discounted cumulated fiscal effects for the city of Dsseldorf discounted cumulated fiscal effects for the city of Dsseldorf 20.000.000 20.000.000 15.000.000 15.000.000 Practical Application Conclusion and Outlook 10.000.000 10.000.000 5.000.000 5.000.000 0 -5.000.000 -5.000.000 -10.000.000 -10.000.000 21 ERES 2012 2027 2027 2026 2026 2025 2025 2024 2024 2023 2023 2022 2022 2021 2021 2020 2020 2019 2019 2018 2018 2017

2017 2016 2016 2015 2015 2014 2014 2013 2013 2012 2012 2011 2011 2010 2010 2009 2009 2008 2008 2007 2007 2006 2006 2005 2005 2004 2004 2003 2003 0 technische universitt dortmund Agenda EIBURS Rationale Goal structure Conclusion and Outlook Project is a perfect case-study for the enhancement of the CBA method Ex-ante assumptions will be checked Indicator set will be enlarged (Ecology, Society)

Concentration on broad and integrated approach > quantification of benefit indicators > analysis of interactions > I-CBA Systemisation Thank you very much for your attention ! Practical Application Conclusion and Outlook Univ.-Prof. Dr. Michael Nadler Chair of Real Estate Development TU Dortmund University August-Schmidt-Strasse 6 D-44227 Dortmund Phone +49/231/7557906 Fax +49/231/7552415 [email protected] www.immo.tu-dortmund.de 22 ERES 2012 technische universitt dortmund

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