URBAN AGE

CITY TRANSFORMATIONS CONFERENCE

October 2013

Jürgen Bruns-Berentelg
HafenCity Hamburg GmbH

The economics of good planning:

integrating Hamburg

All rights are reserved by the presenter

www.lsecities.net
The Economics of Good Planning
Integrating Hamburg and HafenCity

Jürgen Bruns-Berentelg
CEO HafenCity Hamburg GmbH

Urban Age City Transformations Conference, Rio de Janeiro

24 October 2013
HAFENCITY: STRONG SEMI-STATE ROLE
NEW FORMATION OF INTERESTS AND MARKETS

City State of Hamburg Private / Public Sector Private Sector

HafenCity Hamburg GmbH (Quango)

a) Setting the political agenda Financing Private and institutional

b) State Commission - Acts as land owner of developers and investors
approvals special asset “city and port” - development of
- development plans - Finances its activities individual sites
from land sales process
- land sales (exception
c) Prepares and grants: Überseequartier:
Developing central retail area,
- development plans
- urban design (guidelines) - acts as master developer 16 buildings)
- building permits - development planning
d) Finances and builds, partly - plans and builds infrastructure
as public-private joint venture: (streets, bridges, quay walls)
- schools - public spaces
(promenades, parks)
- university
- sets new frameworks for quality
- concert hall
enhancement and innovations
- science centre
- acquires investors,
- subway sells properties
- organizes communication,
marketing
OUTLINE

• The Hamburg Background

• HafenCity: Basic Features of Urban Ambition
• The Public and Private Value Generation Process
Vortrag
Datum
THE ECONOMIC TRANSFORMATION OF HAMBURG
HAMBURG‘S OPPORTUNITIES OF THE NINETIES

Economic Transformation:
Hamburg‘s New Opportunities in the Nineties

• Regaining a central position in the

European port economy (the Iron Curtain
between socialist Eastern Europe and
capitalist Western Europe 50 km away
from Hamburg restricted it‘s hinterland)

• High growth potential of the

BRIC states could be absorbed
due to strong established
trade connections

• The economic and political restructuring

of the 70‘s, 80‘s and early 90‘s
made available major areas
for urban redevelopment,
specifically in the inner city
THE ECONOMIC TRANSFORMATION OF HAMBURG
POSITION IN THE POLYCENTRIC URBAN STRUCTURE OF GERMANY

Hamburg‘s Position in the Polycentric Urban Structure of Germany

(Berlin, Hamburg, Munich, Frankfurt, Stuttgart …)

• second most populous city in Germany

1,8 Mio inhabitants (city), 4,9 Mio inhabitants (metropolitan area)

• second most important sea port in Europe (but 105 km away from the North Sea,
thus position of port as economic driver fraught with risk)

• strong global integration with broad mixed use economy but weak technology sector
(in comparison to Munich and Stuttgart) except aircraft manufacturing

• one of the wealthiest city regions in Europe

GDP per capital in purchasing power no. 4 in EU 27

• governance structure: municipality and state (identical bounderies)

HAMBURG‘S GROWTH STRATEGY

“Metropole Hamburg – Growing City” (2002)

The vision “Growing city” is conceived as a long-term development strategy, aimed to position Hamburg in
the international competition of metropolitan regions and to lay the base for growth, both in terms of
demographic and economic development.

The program is oriented along four goals: Strategic themes

• upgrade port facitlities
1. “to develop Hamburg
• support growth of
into an international, dynamic,
SME-based economy
innovative and culturally
diversified metropolitan city
Economic instruments
2. to promote above-average • cluster strategies
sustainable economic and • state funded and state based
demographic growth and agencies and a new development
environmental quality bank
3. to support Hamburg's
talents and Hamburg's Added strategic foci within the last years
attractiveness for talents • primary education and pre school
education
4. to advance Hamburg as a • strong increase in new built housing
fair-minded city worth living in.” volume, including affordable housing
OUTLINE

• The Hamburg Background

• HafenCity: Basic Features of Urban Ambition
• The Public and Private Value Generation Process
HAFENCITY HAMBURG: KEY FEATURES

HafenCity
• decision to establish HafenCity: 1997
• masterplan: 2000
• area: 157 ha
• waterfront: 10.5 kilometers
• central city area enlargement by 40%
• 45.000 jobs
• 6.000 homes for 12.000 residents
• total investment volume approx. 10.4 bn €
• time frame: 2000 – 2025

city area
HafenCity
HAFENCITY HAMBURG
THE ECONOMIC AND POLITICAL DEVELOPMENT LOGIC

• low productivity land use in the core of the city

(lost comparitive advantage as harbour space)

• high value for waterfront and city center uses and

thus high self financing capacity of transformation;
potential for mixed used downtown expansion;
growth in the city centre

• assumed cross financing capacity for harbour

expansion, paying for new major container terminal
infrastructure (already restricted city state budget for
infrastructure development in the nineties) due to
“ownership dividend” of port land, owned by the
city / state of Hamburg

• the assumed “land ownership dividend” to be used

for port expansion allowed for a fast seperation from
port related to city related governance structure.
HAFENCITY: THE RADICAL TRANSFORMATION OF HARBOUR
SPACE INTO URBAN SPACE
HAFENCITY: THE BASIC URBANITY CONCEPT

public spaces culture/

entertainment
10.5 km promenades, facilities
urban and water places, social
green (parks) institutions and 2.5 mio. visitors p.a.
27 ha networks

knowledge milieu
(HafenCity University,
places of Kühne Logistics
residential and office
consumption University)
mixed use
retail/food services/trades 12,000 residents,
200.000 m² more than 45,000 jobs
Überseequartier (as core area)
approx. 14 mio visitors p.a.

approx. 2,3 Mio. sqm GFA

 HAFENCITY: THE DRIVERS OF URBANITY

residential 12,000 inhabitants matrix mix of use office 45,000 employees

peripheral central peripheral

urban driver urban driver urban driver

tourism tourism
science, consumer space science,
education, Überseequartier education,

Spillover effects

Spillover effects
social retail/ social
peripheral peripheral infrastructure
infrastructure gastronomy
retail / retail /
65,000 m² GFA
local supply & local supply &
gastronomy gastronomy
approx.
40,000 – 50,000
leisure visitors per day leisure

culture culture

Retail and gastronomy highly productive retail with national and Retail and gastronomy
average productive retail intern‘l orientation (including local supply) average productive retail
GENERATING THE STRUCTURE OF A NEW DOWNTOWN
DIFFERENTIATION OF CONCEPTS AND USES (SECOND FLOOR)
GENERATING THE STRUCTURE OF A NEW DOWNTOWN
DIFFERENTIATION OF CONCEPTS AND USES (GROUND FLOOR)
GENERATING THE STRUCTURE OF A NEW DOWNTOWN DENSITY
AND PUBLIC SPACE (380 jobs and 95 inhabitants per ha)
HAFENCITY 2012 / 2013: URBANITY OF A NEW DOWNTOWN
HAFENCITY 2013: GENERATING A NEW MARITIME IDENTIY
OUTLINE

• The Hamburg Background

• HafenCity: Basic Features of Urban Ambition
• The Public and Private Value Generation Process
PUBLIC AND PRIVATE VALUE GENERATION PROCESS
COMMUNICATIVE CAPITAL FORMATION

Communicative Capital Formation

Generating the encounter capacity of people, institutions and places

• High public information density
• for economic decision making
• for social decision making
• Expansion of social roles of institutions
• Opening up public spaces for social and cultural tension
• Privileging voluntary cooperation and networks
THE PUBLIC AND PRIVATE VALUE GENERATION

Economic Capital Formation

a) increasing competitiveness, decreasing market risks, increasing

the number of agents

b) shifting from land price maximisation to quality generation

• in general 70% concept / 30% price based allocation in public tenders

• strong differentiation of prices to support spatial innovation, public ground
floor uses and cultural uses and to generate a diverse population structure

c) transforming spatial proximity into organisational / social proximity for

economic cooperation and spillovers

d) re-forming contractual (land) transfer processes into cooperation and

learning processes and new incentives

e) cultural capital formation

f) the economics of green capital formation

 ECONOMIC CAPITAL FORMATION: INCREASING COMPETITIVENESS,
DECREASING MARKET RISKS

level of competition among private-

sector investors

high

type 1:
residential and small scale
office developments

type 2:
major office developments
medium I
II type 3a:
development of a
shopping center
III a
centre in
competition-/risk space type 3:
large-scale mixed
low III use development

low medium high state of Hamburg’s

risk exposure
 ECONOMIC CAPITAL FORMATION: INCREASING
COMPETITIVENESS, DECREASING MARKET RISKS

level of competition among private-

type 1:
sector investors
competitive spatial segmentation

high I

type 3:
competitive negotiation
(Überseequartier)

medium I III
II

II
low type 2:
III
non-competitive allocation

low medium high State of Hamburg’s

risk exposure
ECONOMIC CAPITAL FORMATION: SHIFTING FROM PRICE MAXIMISATION
TO QUALITY GENERATION / DIVERSIFIED URBAN ENVIRONMENT

PLAZA

PLAZA

PROMENADE

Mixture of Development Actors and Residential Concepts

Investor / property developer Building Joint Ventures (owner occupier communities)
(freehold, upmarket or luxury) (freehold)

Investor / property developer Living concept for seniors

(freehold, medium price level) (freehold / rental, upmarket)

Investor / property developer Residential building cooperatives

(rental / freehold, medium price level) (rental)
Public amenities
Office at ground floor / wharf levels
(e.g. shops, restaurants, cafes, galeries)
ECONOMIC CAPITAL FORMATION: SHIFTING FROM PRICE MAXIMISATION
TO QUALITY GENERATION / DIVERSIFIED URBAN ENVIRONMENT
THE PUBLIC AND PRIVATE VALUE GENERATION

Economic Capital Formation

a) increasing competitiveness, decreasing market risks, increasing

the number of agents

b) shifting from land price maximisation to quality generation

• in general 70% concept / 30% price based allocation in public tenders

• strong differentiation of prices to support spatial innovation, public ground
floor uses and cultural uses and to generate a diverse population structure

c) transforming spatial proximity into organisational / social proximity for

economic cooperation and spillovers

d) re-forming contractual (land) transfer processes into cooperation and

learning processes and new incentives

e) cultural capital formation

f) the economics of green capital formation

TRANSFORMING SPATIAL PROXIMITY INTO ORGANISATIONAL /
SOCIAL PROXIMITY FOR ECONOMIC COOPERATION AND SPILLOVER

designxport
exhibition, library
iF design

arcades
public
space

Greenpeace
exhibition

cultural
exhibition
space
2000 sqm
galleries,
office space
TRANSFORMING SPATIAL PROXIMITY INTO ORGANISATIONAL /
SOCIAL PROXIMITY: UNILEVER HEADQUARTER
THE PUBLIC AND PRIVATE VALUE GENERATION

Economic Capital Formation

a) increasing competitiveness, decreasing market risks, increasing

the number of agents

b) shifting from land price maximisation to quality generation

• in general 70% concept / 30% price based allocation in public tenders

• strong differentiation of prices to support spatial innovation, public ground
floor uses and cultural uses and to generate a diverse population structure

c) transforming spatial proximity into organisational / social proximity for

economic cooperation and spillovers

d) re-forming contractual (land) transfer processes into cooperation and

learning processes and new incentives

e) cultural capital formation

f) the economics of green capital formation

ECONOMICS OF CAPITAL FORMATION:
RE-FORMING CONTRACTS AS COOPERATION PROCESSES

Exclusive option granted to private developer for a limited period

Features:
• exclusive option granted by HafenCity GmbH to investor based on a
fixed price (€ per m² GFS) and according to process rules
• maximum option period 1.5 years
• sale of the site after architectural competition and building permit
granted
• payment of sales price 4 weeks after signing sales contract
• construction starts 4 weeks after signing sales contract
Advantages:
• quality enhancement (architecture + urban design); public access
• stronger timewise coordination of developments
→ avoids free rider strategies
• risk and cost reduction for developers
• increase in investment value
THE PUBLIC AND PRIVATE VALUE GENERATION

Economic Capital Formation

a) increasing competitiveness, decreasing market risks, increasing

the number of agents

b) shifting from land price maximisation to quality generation

• in general 70% concept / 30% price based allocation in public tenders

• strong differentiation of prices to support spatial innovation, public ground
floor uses and cultural uses and to generate a diverse population structure

c) transforming spatial proximity into organisational / social proximity for

economic cooperation and spillovers

d) re-forming contractual (land) transfer processes into cooperation and

learning processes and new incentives

e) cultural capital formation

f) the economics of green capital formation

 “PLANNING” CULTURAL SPACES IN HAFENCITY

Iconic Mixed use Public Temporary Cultural

Spaces Spaces Spaces Spaces Quarter
(newly built, (newly built) (newly built)
historical)

• Elbphilharmonie • ground floor • regular and • former harbour • Oberhafen

Concert Hall temporary spaces (limited Quarter
• often publicly uses, wide short term use)
• Int. Maritime related • 20000 sqm
range of • Strandkai
Museum former logistics
• medium size activities
• Baakenhöft space,
• Science Center spaces • e. g. Magellan (partially
(10 years)
(not persued) (1000-3000 sqm); Terraces, waterfront)
ships,
spatially Marco Polo 8000 sqm
dispersed Terraces logistics space,
open space,
• Lohsepark (waterfront)
THE PUBLIC AND PRIVATE VALUE GENERATION

Economic Capital Formation

a) increasing competitiveness, decreasing market risks, increasing

the number of agents

b) shifting from land price maximisation to quality generation

• in general 70% concept / 30% price based allocation in public tenders

• strong differentiation of prices to support spatial innovation, public ground
floor uses and cultural uses and to generate a diverse population structure

c) transforming spatial proximity into organisational / social proximity for

economic cooperation and spillovers

d) re-forming contractual (land) transfer processes into cooperation and

learning processes and new incentives

e) cultural capital formation

f) the economics of green capital formation

CONCLUDING COMMENTS
THANK YOU FOR YOUR ATTENTION!

Jürgen Bruns-Berentelg
CEO
HafenCity Hamburg GmbH
Five Innovation Paths of HafenCity: Development
45.000 jobs, 6.000 residential units: Is there more to it?

Urban Identity Social Cultural / Ecologiocal

Structure Structure and Science Sustainability
Cohesion Spaces
Basic • Fine grained horizontal • Waterfront and public Not defined at Not defined at Not defined at masterplan
and vertical mixture of space generation masterplan level masterplan level level though to be provided.
Features uses • Horizontal integration Favoural urban structure, and
(at Masterplan • High importance of of Old and New City flood protection concept
level, open network of public • Red brick as important integrating flood protection,
Masterplan) spaces with diverse building material and car parking into a new
features urban topography

Evolution of Acquisition Processes Identity Generation of Residential Maritime Museum Heating energy supply
of Developers / Users HC as public space Development also by (2009) 2003 / 2009 public tender
Concepts, • Spatial segmentation to • Everyday uses (CO2 benchmark 2009,
Housing Cooperations New Concert Hall
Strategies create diversity and wide • Cultural activities
and Community Elbphilharmonie
92 % renewable)
and spread of market uses • Concerts
• Special emphasis on • Maritime activities Housing (2003/4) (2016) Generating Physical and
Projects ground floor uses (public Legal Compatability of
• Differentiation uses land price reduced) 33% Affordable Cultural quarter
Cruse Ship Terminal Housing Integration Oberhafen Harbour and Residential
• Priority access for major
of Activities Uses in 2003
(office) users (reduction of and price capped • Cultural programs
and Actors speculative development) • Cultural cooperation
• Creation of Historical Maritime Housing 2010/11
• In residential development and network structure Building certification
Heritage • New program for disabled
New (Spatial) tender based either on (2010 ff.)
• Traditional harbour and aged people (2013) system 2007
fixed prices with concept
Concepts • Maritime museum (70 % gold standard in Central,
priority or with concept Urban Social
• Historic quay walls 100% in Eastern HafenCity)
priority (70% concept; 30
% price)
Infrastructure HafenCity University
Concert Hall on Top
(e.g. schools, kindergarten,
(2013) Urban transport:
neighbour-hood meeting • Hydrogen fuel station 2012
Strategic Generation of of a Storage Building houses) Kühne Logistics • New subway U4 2012
Diversity of Uses / Public Access Social Networks and University (2010), • Rental Bike system
(2016) Neighbourhood Medical School and • Electro Car sharing →
Open mixed-use Place for major Generation. several smaller higher
educational branch Reduction of car use from an
shopping area (reset companies and living (e.g. Netzwerk e.V.) average of 47% of traffic
institutions
program) „alike“ movements in Hamburg to 20-25
% in HafenCity

Land use efficiency and
maritime culture • Social mix and
Cultural and
interaction density
Global and local encounter capacity knowledge milieu Multidimensional

Walkability representation; „lively (avoiding exclusion)
place“ Sustainability
U r b a n i t y
The Urban Design Culture of HafenCity
Scalar Levels

I HafenCity Masterplan 2000 Masterplan Revision 2010 Eastern HafenCity

(Community Level) (flexible & open)
• Winner Masterplan Competition: • Masterplanner:
K. Christiaanse (today ETH Zurich / KCAP / HafenCity Hamburg GmbH / Ministry of Urban Development and Environment
KCAP), Draft and Final Version:
HafenCity Hamburg GmbH / Ministry of
Urban Development and Environment

II Intermediate Functional Plan for each Urban Design Landscape Competitions

(Ten City Quarters) City Quarter Competitions (1 to 3 quarters; approx. 30
(before the start of the development of participants for each competition)
an area; 10-12 participants) Winners:
• EMBT, Barcelona
• BBGG, Barcelona
• Vogt, Zurich
• Loidl, Berlin

Private competitions on site:

• Diverse landscape architects

III Mikro Individual Buildings Architectural Competitions Infrastructure (Bridges)

(Site Level) (100 to 150 buildings) (joint architectural / engineering
competitions)
private buildings: 4 to 12 participants
depending on the size of the building

public buildings: up to 100 participants

No competition: for very few buildings

(e.g. Elbphilharmonie)

Public Competitions Private Competitions