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Places for People – A Developer’s Perspective

David Cowans – CEO – Places for People

 

I think the agenda you set yourself today about raising expectations is a good one. The tough bit is actually making it fit with value creation and with cash injection, wherever that might come from. 

 

I was asked to talk from a developer’s perspective, so what I will try to do is give you some thoughts about your approach, and offer advice from my own experience which I hope will be helpful.

 

First off, I would suggest that you adopt some sort of model that represents what you are looking for as a place. This is what we use on all developments, designed to create holistic thinking – something that everybody talks about and very few people do. A good model captures your own thinking about what sort of place you want to create – and what it would be like to live, work and play in that place.

 

We can see that Archway is in a symbiotic relationship with places around it, and competing with places around it - as a place to live, as a place to do business, and as a place to create values. You then have to develop this thinking. For example, what is the relationship between where you are now and where you will be when the Kings Cross development is finally completed? There is a £10 million penthouse being advertised on top of St Pancras Station. The likelihood is that this will create waves of value. How are you going to capture that? But also, how are you going to defend yourself against that?  How are you to ensure that the local people are going to be able to afford to live here?  How are the local businesses going to survive? How are you going to attract new people to live here, to bring vibrancy and to assist the local community?

 

Doing that you have to involve the people you have now, but also the people you want to attract in order to create the sort of mixed income community you want – and you want a mixed community because that is a genuinely stable one. That is a difficult task and a lot of schemes fail because identifying the people you want to attract and balancing their needs with the needs and aspirations of people that already live here, doesn’t happen. 

 

What is my perspective? Places for People is not a traditional developer in many ways so you might get a different view from another developer. Typically what happens in terms of development is a two-stage process. People go through very expensive master planning process for an area – expensive in terms of people’s time and emotion as well as cash.  The effort involved often raises people’s expectations.  Then, as the development process begins and individual sites are given to developers, or an overall developer arrangement is introduced, often the first thing that the developer will tell you is that the master plan cannot be done.  It is highly likely that you would lose a lot of community support if you got to a point where the majority of people supported a plan which then had to be changed because it wasn’t achievable. So some joined-up thinking is crucial between the planning process and the developing process

 

There is one process of planning and delivery that can avoid this and it is one that I am very keen on - choice within a place, and working out what a place where you would want to live would look like.  A good technique I would invite you to use is to write the press release that you are putting out in 10 years about your success.  What would it say? What do you want people to say about the place and why do you want them to come here?  

 

What is it that would make the area attractive to you? Who are the customers of the place and what are their aspirations - both the people who are here now and the people you want to move here? What are their aspirations for it as a place to enjoy leisure; as a place to gain employment; as a place to bring up their children; as a place to grow old?   This approach would provide a good framework with which to plan.

 

I also think that if you look at a place, you cannot just look at the built environment. A major error I think in a lot of regeneration activities is to talk about the people, but as consumers of the built environment. They’re not. They are people who go about their daily life, people who want to learn, people who want to interact with each other. So you need to look not just at the buildings but also the services and products that the people use there, that make the place great. Having mixed communities (a mix of tenures, incomes, some commercial) is crucial. The big issue for me is that a sustainable community has to be economically sustainable as well as environmentally sustainable.  And you need to look at the environmental issues, and at the tensions and trade offs. 

 

The big challenge about rethinking places can be that you have to make the case for change in the community where a lot of people understandably think that the place is great as it is and doesn’t need to be changed.  You need people to think about where they want to be in the future, and exactly what the journey will be. You have to operate with day-to-day thinking and focus on the long term strategy at the same time, and that’s hard to do. But if you don’t do this you’ll lose lots of people’s support because they won’t understand the bigger picture and what it means to them. 

 

There is a huge issue about balancing competing interests and there is no advice I can help you with because there will be lots of them. So you have to work out how you manage the competing interest between and within communities, between commercial usages and residential usages, between green space and development. It is absolutely a fundamental part of the work you have embarked on.   And it will be hard work. There will be some very difficult decisions about the balance between redevelopment and regeneration. Your decisions and focus will derive from your view about the type of place that you want it to be.

 

Another thing I would say about developers is that they have to be here for the long term. Most of the development industry builds, sells and goes. Even in regeneration the big mistake a lot of people make is not thinking about what happens the day after it’s all done. There are many examples in the UK of exciting built environment regeneration projects where two years later nobody’s managing the properties properly, the built environment is starting to fade, and no one is looking after the landscaping because the whole place was planned without focusing on its long term future.

 

I don’t think that that’s sustainable any more, especially in places as complex as this. Our approach would be to look at the development / community as a whole, and we would build everything. We’d generate all the shops and all the houses, and we’d manage the whole lot.  

 

The link between sustainable communities and long-term commitment is crucial. And that reinforces my earlier point about taking a holistic approach. So at the beginning you have to think about where you want to get to in every aspect - the built environment, the economics of the area, and who is going to manage it. There’s nothing that concentrates the mind more than knowing that if you are involved in the planning you have to do it and make it pay - it produces a completely different mindset.  And if you can get to a point where you have a master plan and development and management contract, this creates a contractual framework where the long-term issues have to be dealt with.  So I think you should be looking for contracts that include master planning, delivery, and management, and you should be looking for them over 20 years.

 

But the fundamental issue for me is value. Value is everything, and without it nothing will happen. Value, and I don’t just mean commercial value, is crucial to all things.  What is it that people from every walk of life want in terms of adding value to the place they live? And in commercial terms, people won’t invest in something if there’s no return. So there has to be a blend between private and public sector resources. Knowing what people believe will add value to their area is a good way to try and understand how to manage the inevitable trade offs. If you can do this you will be in an incredibly strong position and you’ll probably avoid something like 80% of the grief I’ve seen elsewhere.

 

I don’t know how you intend to do this but firstly I want to consider consultation. Consultation and responding to needs doesn’t achieve enough. The best language I can think of is the language of engagement, the language of a viable market.  What you need is a group of people who are prepared to go and tell everybody what a great place this is and why that is. If you start off from that proposition you can unite the people around a vision of the place as it could be, and start to create much stronger views about the future of the place than if you start off with how awful it is and what needs to change.

 

There’s a huge issue for me about investment, and what I would encourage you to do is to create something like an area business plan. Imagine you were taking this area to a bank and you wanted the bank to lend you some money to improve it. You can work out what public sector cash is coming in, and what investment you need. There will probably be some sort of gap between the two and you can figure out how you might go about getting the extra funding. 

 

If you are able to get developers who can cross-subsidise between their activities and other activities you’ll find that they will probably create more value to the area rather than simply squeezing cash out of the planning system.  And if you involve them early on, the chances of getting better value are higher. 

 

I’d also encourage you to think about the sort of financial products you’ll need.  If you make a good place great to live in, values will rise, so what sort of financial products might you want to see in place along the way to make sure in perpetuity that local people might have a change of living here?  There are lots of things you can do.  Last year we started up our own mortgage product because we could see that there was a real problem with people gaining finance from the traditional housing mortgage markets.

 

Another strand to this is, how do you help to start businesses here? You may well have embryonic Bill Gates’s about. How are you going to keep that entrepreneurial spirit here, doing business here?  How are you going to give people their start here?  There are lots of answers to that sort of question.  That’s all part of the question of how are you going to market the place as a pleasant place to live and do business.

 

Transport and access are all crucial issues, but what about shopping.  What sort of shopping do you want here?  Do you position yourself as the organic produce centre of London? What will differentiate Archway to create an attractive marketing position, a good place to do business and a place for people to want to visit? It’s a good challenge.

 

What would make people want to come?  A classic example is a school.  Everybody knows a great school generates better property values and boosts the community. What can you do to sort a school out and generate higher values?  One of your business plan aims could be what’s the education like, what can we do to improve it, and do we create and capture value off the back of it, both in terms of people wanting to live there and in terms of creating some cash for the area?  What sort of infrastructure, shopping infrastructure and community infrastructure do you need?

 

So these are some of my thoughts, and a good place to start is to decide what makes it a great place? What makes you feel good about when you arrive here?  What makes you feel good when you get back from holiday? Do you miss it? Why do you miss it? This is something which you have already started to do. What would make it better, in every sense? And what would an area business plan look like? What would it look like if you had to make a pitch to somebody else for cash? And then the big question is, what would it take to deliver it?

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