Local/Regional Economic Development in South ... - Value Chains

3. Commercial Land Management – the Example of Munich
Regina Kallmayer
Background
The changes in production, sourcing and sales conditions
that have arisen as a result of the liberalization of international
trade and the ensuing globalization of markets, have
provided companies with an increased range of operating
locations. The consequences of these on municipalities,
cities and regions is that there is steadily increasing competition
in all areas for business premises, to maintain and
create jobs, to offer subsidies and on tax revenues.
In Germany, in the construction industry sales levels for
industrial and commercial real estate almost match sales
for housing construction. In the interest of socially acceptable
and ecologically sustainable tapping of economic
and culturally specific potentials, German municipalities
face the challenge of planning and managing commercial
land development in a long-term, sustainable manner. So
far commercial land management has not been a priority
for either local or regional development within South-
Eastern Europe. Until now, with the goal of integration
into the European Union, the South-Eastern European
municipalities, cities and regions were faced with the task
of re-orienting their economic structures and achieving a
sufficient level of competitiveness in their intra-community
market.
The example of Munich, capital of Bavaria
The City of Munich has the third largest population in
Germany, however it is a small and compact city, covering
a relatively small area. Munich’s long established strategies
for urban development and implementation-oriented
land management have made it one of the cities in Europe
with the largest range of experiences.
Since 1994 the administration has successfully included all
stakeholders in strategic commercial land development.
The goal is to create demand-oriented offers to meet the
various needs of production, manufacturing and trade, as
well as the so-called “future sectors” such as the high-tech
industry, information, communications and financial services.
The concept of “Perspective Munich” was created,
which has become the symbol for the economic stimulation
of the city, social equity and greater justice in the development
of new areas. For these cases the city developed
guidelines and model projects that included economic and
social aspects in spatial development planning. From the
outset these new concepts were taken into account for
developing neighborhoods, city-friendly public transport
and for networking with the surrounding municipalities,
to develop an economic area that could be globally competitive.
Important action areas include: creating building rights,
programs for commercial land development and providing
the right of continuance for already existing buildings.
Economic structural change and rising land prices have
resulted in a decrease in commercial and industrial sites
within the urban area, by approximately 27 % in the past
15 years. However the continual need for commercial land
means that the City of Munich has had to respond with
adequate programs. The newly developed urban district
“Messestadt Riem” demonstrates how developing a compatible
mixture of commercial sites together with housing
and parks, can produce lively, self-sufficient urban neighborhoods.
Currently similar plans are being developed for
33 other locations, which will double the areas available
within the city for office and administrative purposes.
Urban development planning entails substantial financial
burdens for municipalities. The development of new residential
and commercial areas requires the provision of
economic infrastructure (roads, water and sewage, electric
power etc), social infrastructure (kindergartens, schools,
health care etc), as well as parks, or green areas. As a result
of a steadily worsening financial situation in the early
1990s, the City of Munich was faced with the question
of how it could continue to finance its future-oriented
urban development program. The new laws regarding investment
relief and land for housing then entitled the municipalities
to draw on the planning beneficiaries concerning
the co-financing of the promotion and securing of
urban development goals.
For example, in 1994 the City of Munich developed the
instrument “Socially equitable land use” (SoBon), which
involved all planning beneficiaries sharing in the expenses,
at an appropriate level.
“The procedure … is being used for urban development
measures in the framework of urban land use planning
that gives rise to expenses for the City of Munich and
which lead to a substantial increase in the value of land.”
www.muenchen.de/print?depl=prod&oid=87925
After initial resistance by the residents and businesses, the
detailed urban plans were passed, and new construction
rights created, despite the city’s financial situation. This
in turn, opened up new opportunities for the use of and
profit from the increased value of the development sites
for the planning beneficiaries, which justified their co-financing
expenses.
The Lord Mayor, Christian Ude stated at a press conference:
“The program Socially Equitable Land Use was a
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