Real Estate Strategies In A Large-Scale Urban Development Project: Generating A High-Quality Public Good By Developing Competitive And Transparent Market-Driven Approaches And Processes. The Hafencity Hamburg Project

Academic literature tends to view large-scale urban development projects as a manifestation of a neoliberal model of urban development, an expression of an increasing integration of regions into global developments, and associates them with a trend towards privatisation of cities that is coupled with a loss of public control. This view overlooks the fact that large-scale development projects in particular open up a vast number of additional structuring opportunities for inner city areas. By effectively combining regional and global as well as public and private interests they can create new forms of urban quality. However, this requires an active commitment on the part of public decision makers to market-driven development processes by shaping the market-related context of large-scale projects. Good urban development provides the operational interface between market-driven real estate development and the public good, the city. Using the HafenCity Hamburg project as a case study, this presentation aims to demonstrate how public and private interests can be reconciled in major, largely private-sector funded real estate developments by adopting a rational choice model of urban development. Situated on 155 hectares of land directly adjoining the Elbe River and as the future home to around 12,000 residents and 40,000 service-sector employees and location of outstanding cultural facilities and public spaces, HafenCity Hamburg is one of Europeís most significant central city real estate developments. About 5 billion euros of private-sector investment matched by 1.2 billion euros in public financing create the basis for a sophisticated multiple-use concept, featuring also high-quality public spaces, social, academic and cultural facilities. With a public ownership share in the land of over 90 percent, a management-oriented institutionalised realisation structure and a measurable realisation progress, HafenCity Hamburg is a benchmark project for similar developments in other metropolitan centers. Using the project goals as a basis, this presentation will focus on how the HafenCityís real estate project development reflects Hamburgís approach towards generating market contexts that improve the quality of urban development. It will highlight the shift from pricing policy based market decision making (e.g. maximising land sales prices) towards one based on product and process quality (e. g. synchronised and expedited realisation, adherence to standards, etc.). These factors are not primarily regulated by intelligently applying planning laws but in the first place via competitive and subsequently cooperative processes. In relation to the level of competition generated for development areas within the HafenCity, one of three investor acquisition mechanisms applies: Variant 1 is based on competitive segmentation, Variant 2 is based on competitive negotiation and Variant 3 on non-competitive allocation. Although different in each case, the market entry conditions upon which these mechanisms rely can be designed as decision making contexts by the cityís urban development company HafenCity Hamburg GmbH. All mechanisms harbour different risks for the public sphere and all have different urban development outcomes. The development results show that, in a global context, specific market-driven approaches do not necessarily entail a loss in the quality of urban environments or urban development. By making urban development planning transparent, opening it up to an organised market competition and by employing cooperation strategies in later phases, large-scale projects such as the HafenCity development are an excellent means of harmonising commercial real estate and public development objectives. Global metropolitan development approaches such as those used for the HafenCity project represent new strategies for cities to take on a decisive role in the creation of ësound urban planning outcomesí without, however, relinquishing control of the process or the quality of the outcome.