03City centre case studies
The case studies presented in this section provide examples of interventions and policies to improve city centres in cities of all sizes, in the UK and internationally. The case studies examined suggest five key types of intervention that politicians and policymakers should consider for creating strong city centre economies. They intentionally focus on one isolated example of intervention, but it is important to note that in many instances, other factors will have contributed to creating a successful city centre economy.
Types of interventions to help create strong city centre economies:
- Relocating employment to the city centre where possible
- Creating an attractive and functional physical environment
- Providing good transport and infrastructure
- Attracting firms through incentives to stimulate business activity
- Making better use of temporary space
Relocating employment to the city centre
Relocating public services
Local authority offices and services are often located in numerous buildings in and around the city. Relocating public services to the city centre has two beneficial effects: firstly, it concentrates workers in the city centre, who access local shops and services. This is particularly important for cities with weaker centres that have experienced a hollowing out of jobs. Secondly, by concentrating services in fewer buildings, relocating public services can also create efficient savings by reducing running and maintenance costs and avoids the duplication of services.
Case study 1: Bradford and Coventry City Councils
Bradford Metropolitan District Council, through the ‘b-works’ scheme, is in the process of relocating some services from locations across Bradford with the key aim of relocating staff to the city centre, helping to boost retail and encouraging new investment there.5 It also aims to provide better services at a lower cost. All 286 of the council’s office buildings are being reviewed for their suitability and condition, running and energy costs, and backlog of maintenance. Their target was to raise £65 million through the sale of unwanted assets, which would pay for the refurbishment of city centre buildings, enabling the accommodation of more staff in fewer buildings and a greater concentration of public sector employees in the city centre.6 The sale of 44 buildings between 2008 and 2013 raised £21.2 million and saved £64 million in maintenance costs.7 The move saw public sector jobs in the city centre increase by 1,300 between 2008 and 2010, which helped to offset the negative impact of the recession on the city centre, which saw the loss of 3,550 private sector jobs.8
Similarly, Coventry City Council will relocate in late 2016 to the new Friargate development in the city centre, a mixed-use business district adjacent to the railway station. The movement of council staff into the city centre is intended to be a catalyst for the movement of other businesses into Friargate. Other blue-chip tenants are now following the Council’s lead. The consolidation of 27 council buildings into nine at Friargate also allows for savings in maintenance costs and carbon emissions. The total economic impact is as yet unknown but the development as a whole is intended to bring 13,400 new office jobs into Coventry city centre.9
Relocating universities and colleges
A similar logic for relocating public service jobs in city centres applies to universities and colleges: it brings more people into the city centre, increasing footfall and attractiveness to businesses and boosting the vitality of the city centre. This again is particularly relevant for those cities that have experienced a hollowing out of the city centre. It also makes the city centre more attractive to businesses seeking to employ graduates or collaborate with researchers.
Case study 2: University of Wales, Newport
In 2011, the University of Wales opened a new campus in Newport city centre, selling off its Allt-yr-yn campus and using its sale as well as funding from the Welsh Assembly, Newport City Council and Newport Unlimited, an Urban Regeneration Company, to fund the new £35 million campus.10 The new campus is a key part of the city’s strategy of regeneration for the city centre,11 bringing 2,700 new students there, supporting local businesses and shops. The university’s design, media and business incubator also aims to build on the city centre location by establishing links between businesses and research. The university has received a 12.7 per cent rise in UCAS applications, over double the rise seen nationally.12 The influx of students and staff to the city centre has also been accompanied by an increase in city centre trade.13 Despite facing criticism from students, staff and local residents, the university have also decided to close the older, out-of-town campus.
Case study 3: City of Glasgow College
Glasgow has merged and relocated four further and higher education institutions from across Glasgow and created the City of Glasgow College. Led by the Central College for business, Glasgow Metropolitan College (a previous merger of the food and technology and building and printing colleges) and Glasgow College of Nautical Studies all merged in 2010 to form the City of Glasgow College. The momentum came from discussions between the four colleges in 2006, and was managed primarily through the initiatives of the colleges, working in cooperation with the local authority, the Glasgow Chamber of Commerce, and the Glasgow Economic Commission.14 Some of the land was sold, and two buildings on the remaining land were demolished to allow for the building of two new campuses; one in the city centre, and one at the edge of the city centre, as part of the Clyde riverside regeneration project. They are both still under construction due to be opened by 2016.
The vision for the merger states the intention of the colleges is “to create Scotland’s first College super campus and be a positive catalyst for change, in partnership with other civic institutions to regenerate and renew Glasgow city centre and the riverside.”15 The agglomeration of colleges has allowed for economies of scale with regards to skills, teaching and resources, raising the profile of the college regionally and nationally. The two campuses are expected to cost £228 million and are being funded through an adapted version of the private finance initiative, Non-Profit Distribution, which ensures greater returns for the public sector and greater transparency. The European Investment Bank and a consortium of German banks are also financing loans to be repaid in 25 years by the Scottish Funding Council and the college’s financial reserves.16 Through the merger, the college has been able to make £5 million of financial savings, and the Scottish Education Secretary has praised the merger for its support of a strategy for economic growth in Glasgow city centre.17
Business incubators, by offering office space and advice to new businesses, can provide valuable services and support innovation. City centre located business incubators might encourage city centre business growth by supporting fledgling businesses to develop and grow in the city centre. Depending on the exact services on offer, this is relevant to both relatively weak and strong city centres. Financial incentives, such as discounted office space, might attract young businesses unable to afford office rents in relatively stronger city centres, and in weaker city centres, the discounts and support on offer might help attract business that would have located elsewhere.
Case study 4: Queens Square Business Quarter, Leeds
Part of Leeds Beckett University, the Queens Square Business Quarter was set up in 2001 as an incubator for early stage businesses located in Leeds city centre. It intended to enable the creation of businesses directly in the city centre by, supporting them through their first three years, offering office space, advice and training. The proximity of students and graduates with new businesses was designed to enable and foster greater links between them. By 2010, Queens Square had supported 420 start-ups, helping to create 1,100 new jobs and turning over £42 million18 – this coincides with 25 per cent private sector growth seen in Leeds between 1998 and 2008.19
Cities with both relatively strong and less successful city centres need the right amount and quality of office, retail, commercial and residential space to support and meet the demands of businesses, residents and shops. Improving the quality of the public realm, in combination with other interventions, could also help make city centres more attractive places to do business. A high quality public realm has been demonstrated to have a positive effect on levels of investment, land values, tourism, and productivity levels via a healthier and more satisfied workforce.20
Physical interventions are a supply-side measure, and therefore should not be regarded alone. It is also important to provide appropriate space without creating an oversupply. However, providing appropriate higher quality physical environments, such as up to date office stock or housing, can contribute to attracting businesses, residents and visitors to the city centre.
Case study 5: Manchester city centre redevelopment
Manchester in the 1980s responded to its post-industrial decline through measures to create new jobs and modernise the skills base of the city. In 1988, the Central Manchester Development Corporation, a public-private partnership (PPP), redeveloped the southern part of Manchester city centre, improving the public realm and increasing office space.21 This, and other measures, coincided with a period of strong economic growth in Manchester during the 1990s and the city centre came to be held back by its limited amount and quality of office space, as well as insufficient retail and hotel space to support tourism. To ensure future investment in the city centre, the council identified that physical renewal in the city centre was crucial.
The IRA bomb in 1996 which destroyed a large area of the city centre, displacing 672 businesses and causing £250 million of physical damage, also formed part of the drive to carry out the physical renewal that had been planned during the 1990s.
Manchester Millennium Ltd (MML), a new PPP between the city council and local businesses was set up. There were four main elements to the development:
- Master planning: The PPP commissioned a consultancy, EDAW, to draw up a master plan, supported by a framework and urban design guidance. As well as creating new office space, a primary aim was to secure investment in leisure and cultural activities, to broaden the attraction of the city centre, through four projects at the Corn Exchange, the Royal Exchange, the Printworks, and the Ramada Block
- Land assembly: The city already owned the freehold on the majority of the site, enabling the city to take a lead on assembly and simplifying negotiations with the five leaseholders.
- Funding: A key task of the MML was to raise public funds for infrastructure. The public investments secured consisted of a £43 million grant from central government, £20 million from the European Regional Development Fund, and £20 million from the Millennium Commission. Some tensions emerged between local and central government following the 1997/8 Local Government Financial Settlement, which made it difficult for Manchester to secure funding to meet the shortfall to begin the project. In response the City Council lobbied government for a ‘fair deal for the city’ to secure the extra funding required. The public investment paid for public realm improvements, transport strategy and infrastructure, deficit funding of projects, the building of the Millennium Centre, and management and promotion costs. By reducing risk and preparing the site for developers, this leveraged £490 million of private funding in physical renewal.
- Take-up: Manchester benefited from existing demand for city centre office and commercial space, as well as the certainty of take-up from previous leaseholders of city centre locations in redeveloped areas.
The redevelopment was mostly complete by 2000, and Manchester city centre now offers the largest office market outside London.22 Interestingly, the number of private sector jobs in Manchester city centre increased by 39 per cent between 1998 and 2008.19 Demand is such that there is now a shortage of office space, with prices higher than regional and national averages.24
Case study 6: Birmingham Highbury Initiative: coming up with strategies for physical renewal
Birmingham’s economy was hit hard by the decline of industry in the 1970s and 1980s. The city sought to improve its city centre in order to attract new private sector investment and create jobs. They did this by convening the 1988 Highbury Initiative, an international symposium of professionals who were invited to explore ideas for Birmingham’s renewal. Their combined input led to an initiative which sought to improve city centre connectivity and accessibility, and particularly highlighted the need to break the ‘concrete collar’, or inner ring road, which prevented economic and physical growth in the city centre. As a result, proposals to reduce through-traffic and pedestrianise the city centre were incorporated into the planning policy in 1990 through the City Centre Design Strategy. The Broad Street area in particular was targeted for redevelopment, and its reincarnation as Brindley Place was intended to act a centre of business tourism. The city council, who held the freehold, took the lead on inviting tenders from developers for the creation of a new convention centre, hotel, and cultural and leisure facilities, and the Design Strategy was developed to maintain good quality urban design principles in accordance with the Highbury Initiative. This strategic approach to renewal in the city centre has coincided with a reversal in city-wide growth trends; while Birmingham as a whole saw a reduction in private sector jobs in 1998-2008, in the city centre there was a 27 per cent increase, 80 per cent of which were in knowledge intensive businesses.
Case study 7: Croydon Opportunity Area Planning Framework: prioritising residential development
A prime business location in the 1960s, Croydon’s economic role in Greater London and the South East has declined in the past 30 years, largely due to a decrease in demand for back of house office space and the emergence of Canary Wharf as an alternative business location. This has resulted in an increase in vacant office space and related fall in the numbers of people working and travelling into central Croydon.
Croydon was identified as one of 33 opportunity areas by the Mayor of London, Boris Johnson. To tackle the hollowing out of Croydon’s centre, the opportunity area planning framework (OAPF) – which acts as supplementary guidance to the London plan – promotes residential development as the top priority intervention for revitalising the city centre. It brings together previous Croydon master plans and sets out a program for the development of 7,300 new homes across the OAPF, providing housing for existing and new residents across tenures, capitalising on excellent rail and transport links to the wider London and the wider South East.
Transport and infrastructure
Good transport is vital in all cities, and good links between the city centre and the wider area is vital for the economies of cities with both weak and strong city centres. Good transport links means ensuring people can access jobs by linking homes and businesses, and ensuring people can access and make use of city centre amenities. Digital infrastructure is also vital in cities for businesses and residents. Reliable and fast broadband connections are a requirement for the majority of, if not all, businesses today and residents expect to be able to access high speed connections at home.
Case study 8: Manchester Metroshuttle
The Manchester Metroshuttle service was launched in 2002 as a flagship zero-fare transport offer for Manchester city centre.25 The initial momentum came from CityCo Manchester, a group representing the interests of Manchester’s city centre, who recognised the lack of accessibility to businesses and shops in the city centre as limiting to growth – the scheme would build on the existing Centreline service which linked the two main train stations.14 The city also wanted to reduce traffic congestion.27 The main impetus for making the service free at point of use was scepticism on behalf of funding partners that the revenue generated from charging fares would outweigh the operational costs of ticketing and enforcement. It also meant the service was universally accessible, allowing all people to get to work and to shops and services.28
The first two Metroshuttle lines were introduced in 2002, with a third route introduced in 2005. Zero-fare buses link rail stations, tram stops, shopping areas and businesses across the city. The service is funded by a partnership between CityCo, Manchester City Council, Transport for Greater Manchester, National Car Parks, and Allied London, a major local landowner. Running costs, which are also partly funded by advertising, are £1.2 million per year. The hybrid vehicles that were introduced in 2010 were funded through subsidies from the Department for Transport. The stakeholders in the PPP also decide on the routes, which were designed to link up key transport nodes and businesses. In 2013, there were 2.8 million passengers on the Metroshuttle, an increase of 32 per cent since 2006.29
The Heart of Manchester Business Improvement District regarded the service as a valuable part of the city’s infrastructure which supports the retail development of the city. 39 per cent of Metroshuttle users are in the city centre for leisure and recreation, and 36 per cent use the service to commute, demonstrating its value both for retail and city centre jobs.
Case study 9: TAM Tramway, Montpellier, France
Montpellier has experienced some of the fastest population and economic growth of any French city in the past 25 years, demanding new infrastructure and housing to meet its growing needs. A tram system was introduced in 2000 to ensure reliable and sustainable connections into the city centre.
A major barrier to its delivery had been co-operation with the surrounding authorities under the existing joint authority, which only joined 15 communes (an administrative unit similar to a parish) in the city region. The formation of the Montpellier Agglomération in 2001, which incorporated 31 communes, formalised the necessary cooperation to be able to deliver the tramway.
The first line of the tram serviced two new urban extensions to the city; since then, three more lines have been completed, connecting suburbs to the city centre. The tramway is managed by TAM, a public-led PPP between the Montpellier Agglomération, Transdev (the operator), banks and other institutions,30 which allows the city to maintain control over the service and its development. Seeking to minimise private commuting in Montpellier, TAM also established a corporate mobility plan agreement, signed by local authorities and businesses. Businesses saw the lower cost travel, decreased stress and fatigue, and lower pollution levels as attractive to them and their employees, making the tram a viable alternative to commuting by car.31 As a result, Montpellier now has one of the highest usage rates of public transport in France.
Case study 10: BRT, Eugene, Oregon
The city of Eugene is a mid-sized city with a strong economy.32 Population growth during the 1990s led the city to introduce a Bus Rapid Transit system that could achieve three aims: the containment of urban sprawl, the encouragement of new businesses in the city centre and along the BRT route, and the reduction of private automobile traffic, particularly from commuters. The service began in 2007, and cost $25 million to design and build, most of which came from federal subsidies.33 The majority of the operating costs, however, are funded through local payroll taxes, which has been regarded as contributing to strong connections between Eugene’s business community and the BRT.34 A study showed that between 2004 and 2010, there was a 10 per cent average increase in jobs within 0.25 miles of a BRT station,35 and local realtors noted an increase in interest in properties proximate to a BRT line.33
Case study 11: Metrolink extension, Oldham, Greater Manchester
Oldham city centre was identified as one of the key priorities for renewal by the city in its Invest in Oldham prospectus, with over 50 per cent of investment (circa £56 million) outlined for the city centre. Central to this investment is the extension of the Greater Manchester city region-wide Metrolink tram system to Oldham town centre, which opened on 27th January, 2014. The tram is considered to be a large asset to the city centre and assist in linking the outlying parts of the town to the centre. It will also mean that Oldham town centre is 15 minutes away from Manchester City Centre.
The rationale for the Metrolink expansion was to improve connectivity across the Greater Manchester city region, including connecting businesses to their customers in different city centres, as well as to wider hinterlands and labour markets, improving business confidence and turnover, and stimulating further investment. As part of plans to develop and extend the offer in the town centre to make it more attractive to those who currently use it, and encourage them to stay longer, the city is aiming to create the right environment for growth and private investment in the future, with particular emphasis on being ‘ready’ for the new extension. This included investment in public realm to help to connect passengers using the Metrolink tram service to town centre shops, restaurants, cafes and more.
The extension was funded by TfGM, partly through additional revenue from fare increases.
Case study 12: Luxembourg: municipal WiFi
The city of Luxembourg’s HotCity scheme was launched in July 2007 by Mayor Paul Helminger with the primary intention of providing a platform for public services that would integrate workers and residents.37 By 2012, it covered 75 per cent of the city.37 It was initially free, but two payment tiers were later introduced. Access to the open internet requires a paid subscription and any services regarded as having public utility, such as bus schedules, finding parking spaces, weather, municipal bike rentals, hotels and shopping are provided free through an application, contributing to greater usage and efficiency of public services which saves money for the city. It provides an advertising service for local businesses and also makes it easier for users to find local businesses.39
Financial tools and business infrastructure
Tax incentives and city investment
As seen in the Enterprise Zones, tax incentives can be a way of drawing investment into the city centre, making it more economically viable for a business to locate centrally than elsewhere. This is likely to be most relevant in cities with relatively weak city centres, that are not attracting businesses to locate there. The following case studies offer examples of tax incentives and financing to deliver infrastructure that has made city centres more viable for development and for businesses to relocate: PPPs to leverage private investment whilst retaining the city’s strategic control; tax increment financing to forward-fund infrastructure and make development more viable; and voting on increases in local taxes to put into specific infrastructure projects. Although the UK does not use sales taxes, and UK cities do not have the same powers to raise taxes as elsewhere, they are able to lift council taxes by 2 per cent, or more if approved by a referendum.
Case study 13: Dallas, Texas
The 1980s downturn badly affected Dallas, and the city centre saw office towers empty out and retailers relocate to suburban malls.40 Over the last 30 years, the city has sought to regenerate the city centre through projects that use up front spending to leverage private investment. The city set up PPPs with the private sector, offered tax incentives and provided cheap land to leverage private sector investment in the city centre. These mechanisms have supported a broad range of projects to boost the city centre,41 including the creation of a new arts district, the State Fair Park, the creation of a new station for the Dallas Area Rapid Transport, and the encouragement of large supermarkets into the city.42 The city government has also established 14 TIF districts in or close to the city centre.43 In these areas, property taxes are retained and used for public realm improvements, site assembly and demolition, and other infrastructure improvements.44 They are funded on a pay-as-you-go basis straight from the TIF fund, or for up front investment from private investors who are paid back from the fund.45 The renovation of the former Statler Hilton Hotel and Dallas Central Library received $46.5 million of city funds, borrowed against expected future property tax receipts, with a further $128.5 million of funding coming from private investors.46 The investment in Dallas city centre has seen significant economic growth at the city-wide level. Since 1996, $2.89 billion has been invested in downtown Dallas, the population almost tripled between 2000 and 2010,47 and in 2012 median household income stood at $73,920, almost double that of the Dallas region.47
Case study 14: MAPs in Oklahoma City, USA
Oklahoma City’s economy, which had been reliant on oil and gas industries, went into economic crisis after the global oil collapse during the 1980s. Seeking strategies for regeneration, the city’s attempt in the 1990s to convince United Airlines to relocate to Oklahoma and create a new industrial focus for the city failed. This led the city to adopt a new strategy that sought to bring a broader range of businesses to the city, rather than a single company that could support it. Seeking to achieve this through physical improvements that would draw in business and in 1993 the city government established Metropolitan Area Projects, or MAPS. Specific projects for new infrastructure and facilities were decided upon by the city and a citizen’s oversight body, and funded through a 1 per cent increase in city sales tax that was voted on by residents. The funds raised were placed into accounts for specific projects rather than a general fund, and spending was on a pay-as-you-go basis rather than through borrowing. MAPs ran for over five years until 1999, and the revenue generated was ploughed into physical improvements and new capital projects in the city centre to encourage more private sector investment and attract new businesses. The city collected $309 million through the increase in the sales tax, earning an additional $54 million in interest alone,49 and its subsequent investment in a conference centre, canal system, public realm improvements and renewal of a derelict hotel resulted in $2.4 billion of private investment.50 A range of further MAPs programmes took place after 1999, bringing the total public and private investment in Oklahoma City to nearly $5 billion by 2013.51
Vacant properties are a feature of both weaker city centres that have experienced a hollowing out of jobs and businesses, and of relatively strong city centre economies. One way of utilising the vacant space, while stimulating business activity in the city centre, is to encourage businesses to locate in these vacant properties. Temporary usage of vacant properties can be a way of tackling urban blight, as well as providing spaces for new businesses to try out ideas, start up enterprises, and explore different types of industry previously unfamiliar to the area.
Case study 15: Christchurch, New Zealand
The 2011 earthquake in Christchurch, New Zealand, destroyed most of the city centre, causing around NZ$40 billion of damage leaving a very high number of damaged buildings and vacant space. The Mayor recognised the need to support the economy while development and refurbishment of the city centre went ahead. It was important to retain students and workers from established technology and engineering industries, but he also saw an opportunity to attract a new young, creative population and industries into the city. The judicious use of vacant space through temporary and meanwhile uses was seen as a way of incentivising young people to stay in Christchurch, as a means of testing out new industries, and supporting the economy through the redevelopment of the city centre.
The installation of temporary uses was led by non-profit organisations such as Gap Filler, a regeneration initiative that links community groups, designers, artists and others with ideas for making use of vacant spaces. These organisations offered advice and sometimes took on the management of projects themselves to encourage people to come forward with innovative uses. License to Occupy agreements and public liability insurance designed to protect them from risk were offered to landowners, to incentivise them to volunteer their vacant properties for temporary usage.52 Funding and strategic support was provided to the non-profit organisations leading the temporary uses through the city council’s Transitional City Work Programme and Projects Fund.53 The impacts on the city centre economy are difficult to gauge in such a short time period, but reducing the amount of vacant space is a positive outcome in any city, and Gap Filler alone have organised 45 temporary use projects in Christchurch since late 2010.54
Case study 16: Masan, Changwon, South Korea
Masan in South Korea is a medium-sized city centre within the city region of Changwon, which suffered from the collapse of the textile industry in the 1980s. The city’s strategy for securing long-term growth in Masan was to build upon its artistic heritage and create an art village in Masan city centre with the intention of bringing in residents and visitors, and encourage business growth.
As a way of incentivising Korean artists to move to Changdong Art Village, the city spent $2.2 million on renting 50 vacant city centre properties at 60 per cent of market rate,55 on the basis that the lease was guaranteed and the property owners would benefit from increased property prices in the long-term as the market responded to increased economic activity. The city also invested in repaving streets, burying electrical cables and provided new exhibition spaces, before inviting artists to live in Masan rent-free.56 50 artists moved to the artists’ village in May 2012. At this early stage, the effect on the recovery of Masan city centre remains unclear, but it is promising. There has been international interest in the project from UNESCO and art dealers, and the city is looking to extend the project for a further eight years with discounted rents, while new shops and restaurants are opening around Masan.57