Tuesday, 30 November 2010

Another Twenty-Seventh City

With Aberdeen City Council taking the steps necessary to establish a special delivery vehicle (wassat?) to manage and develop publicly-owned assets in Aberdeen worth hundreds of millions of pounds, it is unsurprising that the town's thriving ecosystem of independent journalists, bloggers and activists are restive.

Earlier in the month, Aberdeen City Council published this report (PDF) which you might want to read. Though it's pretty tough going, full of pencilneck lingo bingo type rubbish like this:
Within this backdrop, the City Development Company would seek to remediate pockets of ‘market failure’ within the City region, and to not only contribute to the sustainable ‘macro’ economic future of the area, but to facilitate with partners the capturing of value for targeted beneficiaries within a charitable / regeneration role.
Articles and opinion expressing reservations about and opposition to the setting up of what will be Scotland's first city development company have been published in citizen journalist organ "Aberdeen Voice" and political blog Lenathehyena.Facebook groups such as Friends of Union Terrace Gardens and ACSEF Must Go are, as ever, alive with dissent. Opposition politicians murmur their dark misgivings into the twittersphere. Not wanting to be left out, we thought that Other Aberdeen had better chip in. So here goes...

This new development company (to be called "One Aberdeen") is to be a public-private partnership, with the aims of attracting investment, increasing the value of taxpayer-owned land and creating jobs.

Right. Firstly, the whole philosophy of transferring real-estate assets out of council control raises existential questions about the legal entity status of this development company. We are told that the organisation is to be a not-for-profit charitable foundation. We are nonplussed by this - we would have thought that the sole justification for transferring assets out of council control would have been to set loose the unfettered zeal of the entrepreneurial profit-motive. Thus freed from the dead hand of the state local authority, liberated capital in the hands of unrestrained capitalists is operated in an uninhibited fashion to generate profit for the capitalist and in the process provide value for the consumer. So, if all profits are to remain within the development company for re-investment, where is the incentive for the capitalist to operate the assets to the peak of their potential? How will the capitalist add to his capital under this charitable arrangement?

The "One Aberdeen" charitable trust will be set up as a holding company for a "Property Company" which will be its wholly owned subsidiary. A majority (3 from 5) of the members of the Property Company's executive board will be drawn from the private sector, and it would be reasonable to assume that these individuals will be professionals from within the real-estate sector in the local area - anyone else would not be competent to hold the post from lack of contextual experience and expertise.

Since time immemorial, real estate deals have been characterised by now-you-see-it-now-you-don't misdirection and sleight of hand. Bad things are made to look good and good things are made to look bad. We at Other Aberdeen pretend to no expertise in these matters, but in order for capitalists to become interested in operating within the One Aberdeen framework, one can be sure that there will be arrangements which we cannot at first see which will enable the capitalist to add to his capital or add to the value of his capital. For instance, one way to increase the sale price of an item is to reduce the supply of that item which is available to reach the market. In the context of publicly-owned real estate operated by a board member with links to a private-sector real-estate company (which operates its own private land-bank) it would be in the interest of that private-sector company to frustrate any attempts to bring the publicly-owned land to market. As it is likely that those drawn from the private sector to operate the "Property Company" subsidiary of One Aberdeen will be professionals who currently operate within the private real estate sector in the area, it is, therefore, easy to see how conflicts of interest will arise. Should those board members not be drawn from the private real estate sector in the area, then they will be incompetent holders of their posts. This is, of course, Catch 22. If board members are competent, then they will be subject to conflict of interest. If they are not subject to conflict of interest, then they are incompetent.

Perhaps this move to shuffle non-performing assets off to another body is simply an admission of inefficiency and incompetence on behalf of our council's current Enterprise Planning and Infrastructure (EP&I) committee; they are unable to generate value from certain assets, so they're just letting someone else have a go. Fair enough, perhaps we should admire the straightforward self-critical candour implicit in the creation of One Aberdeen as an executive replacement for the major part of the business of the EP&I committee. If we look at the move from this angle, it is merely a management change, and one which will change not much. If the council are guilty of anything, they are guilty of management by vogue. A fairly outmoded vogue at that; by their own admission, this move has been under consideration by the EP&I committee for at least a decade, and this type of public private partnership has been attempted before elsewhere, with varying results. For instance: the private-sector's attempted putsch on the civic sphere in Leeds failed spectacularly in 2009; Wolverhampton Development Company was culled in the summer; Hull's development company, Hull Forward, failed at the end of September; and Plymouth City Development Company closed its doors at round about the same time.

Others have rightly drawn a portentous comparison between John Aberdein's splendid satire on civic Aberdeen "Strip the Willow" in which private enterprise has its rapacious untrammeled way with an initially supine yet increasingly insurgent polity and populace in Aberdeen. The novel seems astonishingly prescient and is a damn fine read, so we recommend it. Along similar lines, though less obviously satirical is Jonathen Franzen's "The Twenty-Seventh City" which is set in St Louis, Missouri during a period of economic decline in the mid 1980's. The novel is a fictionalised account of a real-estate speculation led attempt to revitalise the city.

St Louis had, at one time, been the fourth-largest and richest city in the USA. Highly wealthy, it sat in the centre of the continent at the confluence of the Missouri and Mississippi rivers at a strategic location linking north with south and east with west. Transportation hub and engineering powerhouse, a centre of both high technology and buchaneering risk-taking capitalism, St Louis hosted the 1904 Olympic Games and World's Fair. However, the Atlanticism of the second half of the 20th Century (along with other social and economic factors) didn't serve St Louis well, and by the 1980's, the city had declined from its eminent position to being only the "Twenty-Seventh" city of the title of Franzen's novel.

As the novel unfolds, we learn that the private-sector real-estate speculation-led attempt to revitalise the city is a great success. Through their own city development company - "Municipal Growth", business owners, land-bankers and construction industry interests gain political influence which allows them to sucessfully lobby for (among other measures) the relaxation of zoning (planning) constraints, the abolition of rent controls and the transfer of civic land-banks to private control. All of which has the desired effect: the inner city is gentrified, property values and rent receipts rise, inward investment increases, urban renewal. All spruced up and tickety-boo! Fantastic! Just like that.

However - and this is what should concern us in Aberdeen - this real-estate led renewal threw the baby out with the bathwater. Something had been lost, the ineffable St Louis-ness of St Louis was gone. The marginal, the marginalised the already disenfrancised had no place in the re-developed St Louis. The element of the city which lent the city it's color and vibrance, the creative, bohemian jazzy edgy of musicians and artists, poets and writers are squeezed out of the edges which they had occupied in the city before the arrival of "Municipal Growth". While the city is now sanitised for white-collar white-people to admire each other's choice of consumer goods, this is against a sterile background lacking in cultural context - it is a rat-race money-go-round only. Without meaning, without direction and without hope.

We should worry that here in Aberdeen, the proposed supremacy of private sector real estate interests will create a city suitable only for self-similar white-collar people - a homogenising swarm of cookie-cutter cubicle clones, an army of pre-indebted consumer/producer drones. So we must make sure to work to keep these private sector interests honest, we must be sure to scrutinise what they do and how they do it. There are plenty handbooks out there.

Like the fictional ones above and this real-life one below:

Leeds Plan B

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