A Perspective on the CBD and Waterfront

Opportunity or Already Missing the Target

 

While I was finishing up the ‘First Concept Manukau Drawings‘ yesterday I saw this on Facebook from (Councillor) Cathy Casey:

In the Sunday Star-Times yesterday, Rod Oram argues that Auckland Council won’t deliver on the city’s economic goals, particularly on the Waterfront because we are not addressing sustainable urban design:

“While an ambitious strategy for Auckland looks good on the surface, it fails miserably in one globally cutting-edge area: sustainable urban design.” (Will post when it goes online)

The Online link being here: ‘Auckland’s waterfront plan will not deliver

Rod Oram’s opinion piece in the Sunday Star Times when I read it through had some unfortunate irony attached to it. Irony in the fact the things Oram mentions I had either mentioned myself or implied in my ‘Looking at Developing a 21st Century Auckland” series (currently being written),  ‘The Auckland Project?‘ post and the ‘Outlining a 21st Century Auckland‘ post.

 

First of all lets look at some key aspects of Rod Oram’s opinion piece:

Auckland’s waterfront plan will not deliver 

ROD ORAM

OPINION: Auckland, given its people and place, has the potential to be one of the world’s great cities. To help achieve that, its council has set a bold economic strategy.

However, some studies for the council show that the initiatives under way won’t deliver on the city’s goals. That’s particularly true on the waterfront, the jewel in the crown.

The council’s economic vision could not be clearer:

  • An average annual increase of regional exports greater than 6 per cent
  • An average annual real gross domestic product increase greater than 5 per cent
  • An average annual productivity growth greater than 2 per cent

If the city achieved these targets, it would rise 20 places in 20 years in the OECD’s ranking of cities by GDP per capita, the council says. This will require “a fundamental change in Auckland’s economy”, the council’s economic strategy document says.

Roughly speaking, the regional economy would have to double its rate of growth, not just in volume terms but also in value creation through high productivity, high-paying jobs; and sustain such progress over decades.

Waterfront Auckland, the council-controlled organisation tasked with redeveloping the city’s best land from Westhaven marina to the Ports of Auckland, is no less ambitious. It will “help drive the sustainable development of the waterfront, to deliver the waterfront as New Zealand’s leading location of sustainable urban transformation and renewal”, it says in its recently published Sustainable Development Framework.

Moreover, it says it will deliver “globally significant” projects. Its current focus is Wynyard Central, area south of North Wharf. In coming months it hopes to complete negotiations with property developers for commercial and residential buildings and a hotel there.

 

All very good and goes pretty much what I outlined (the positive stuff) from what Design Champion Ludo Campbell-Reid was quoted in saying in the ‘Outlining a 21st Century Auckland‘ post recently.

 

However, Oram then goes on and says this just two sentences later:

But the rhetoric of Auckland Council and Waterfront Auckland won’t deliver the goods. This is the blunt analysis of a study by PwC for Waterfront Auckland published in March (Waterfront Auckland’s website).

And it all falls apart from there.

I have read both reports that were linked on Oram’s piece and have placed them at the bottom of the post. Needless to say I can see where Rod Oram is coming from on both the economic side and urban design sustainability side.

 

Continuing on with Oram’s piece – on the economic side

Yes, employment on the waterfront will grow, PwC forecasts for the area between Wynyard Quarter in the west to the Marsden and Cook wharves in the east. This excludes the bulk of the Ports of Auckland employment in the container terminals further east.

Direct and indirect fulltime equivalent jobs will grow 2.7 times from around 14,500 this year to 39,400 by 2040. But the economic activity they generate will grow only 2.8 times to $4.12 billion (in constant dollar terms). So, the non-port waterfront’s contribution to regional GDP will barely shift from around 5.5 per cent currently.

It is obvious why Auckland Council is failing to start the fundamental change in Auckland’s economy. Some 12,600 waterfront jobs in 2040, about one-third of the total, will be in low-value, part-time and seasonal work in the cruise, tourism and hospitality sectors, PwC forecasts. Another 12,500 jobs will be “high productivity”, which PwC doesn’t specify nor give any indication of where they will come from; and a further 14,300 in “other” work.

So, how might Auckland fulfil its ambitions? The goals are right. The region needs to be far more deeply linked with the global economy. Currently only 9 per cent of Auckland’s economy has anything to do with the rest of the world. The vast bulk of activity is generated from serving the needs of its population, and the wider country.

To develop such engagement, Auckland needs to become very good at attracting interest and investment from overseas businesses, while many more Auckland businesses must learn how to earn a living internationally, not just in this tiny domestic market. But Auckland will develop these two powerful economic drivers only if it locks on to the seismic economic and social shifts in the world. The most potent of all is the economic and environmental sustainability of urban areas.

….

 

We see some economic number crunching in the above section from Oram based on PwC’s analysis earlier this year. Yes we are seeing growth in the CBD and the immediate fringe areas as outlined in the ‘Strong Growth in Auckland‘ post. While that is good what Oram and PwC were pointing out that we should have reasons for concern:

  • Direct and indirect fulltime equivalent jobs will grow 2.7 times from around 14,500 this year to 39,400 by 2040
  • But the economic activity they generate will grow only 2.8 times to $4.12 billion (in constant dollar terms). So, the non-port waterfront’s contribution to regional GDP will barely shift from around 5.5 per cent currently.
  • Some 12,600 waterfront jobs in 2040, about one-third of the total, will be in low-value, part-time and seasonal work in the cruise, tourism and hospitality sectors
  • Another 12,500 jobs will be “high productivity”, which PwC doesn’t specify nor give any indication of where they will come from; 
  • and a further 14,300 in “other” work

 

Just quickly in regards to “other work” I wonder if they mean this: “On the Phenomenon of Bullshit Jobs.” While it is a fascinating read and gives some interesting insights it does raise concern if that if those 14,300 “other” jobs come from err BS Jobs then this in truth the Port will be providing the only real and relative boost to the CBD and wider Auckland Economy. Meaning we in real terms stagnate around that 5.5% mark (quoted in bold above) as we have not realises this:  “many more Auckland businesses must learn how to earn a living internationally, not just in this tiny domestic market.”

So where will the real growth come from is the CBD looks to be stagnating at 5.5% contribution without port help. Our exporting sector that earns and attracts currency and investment overseas. That catch is though you will not find the bulk of the exporting sector (apart from Port of Auckland) in the CBD regardless of an innovation precinct being there (or not).

 

You will find our exporting sector and even our start-ups (unless subsidised beyond the hilt to be in the CBD/Wynyard Quarter) here: ” The export jobs won’t be found down here. Look south instead to Manukau and surrounds.” That came from a Waitemata Local Board member on Facebook.

And it is true, you will find your exporters and most likely start-ups in actual established industrial areas near good commercial and transit links. Manukau and Wiri are two places that tick those boxes although they are not the only ones in Auckland. Of course this will lead to another post on why Innovation Precincts done or subsidised by Local and/or Central Government(s) are a waste of time and that exporters and start-up often search out established areas.

 

 

Ironically given time if enough exporters or start-ups flourish and mature through time, they both regeneration the urban area they are in. As an example we have the exporters and “innovator” start-ups cluster around Wiri and Manukau – two very established areas that over decades flourish and mature. .

In those decades of maturing the surrounding urban area and fabric change and urban renewal kicks off. While a Council might get involved with say civic and physical infrastructure, the free market and the established exporters and mature start-ups guide and dictate the regeneration for their needs. This in-turn causes critical mass and are able to self-attract more like-minded exporters or innovative start-ups. The economic and social benefits flow through and the surrounding population is lifted up – all without Council sinking $1 billion over ten years (into Wynyard Quarter) that looking at PwC and Rod Oram’s assessment could not deliver the outcomes nor return in investment for the amount of our ratepayer money sunk in…

Questions Council need to ask and to ask of ATEED and Waterfront Auckland

 

Sustainable Urban Design

From SST (still same opinion piece)

How people build and run cities is changing fast. Today, most building owners and occupiers think only of trying to save a bit of energy or water or recycling. But the real leaders are already designing and building radically different structures with vastly superior environmental performance. One example is the Living Building Challenge.

There is a big economic upside to this, as shown by the latest annual World Green Building Trends report by McGraw Hill.

Respondents to its global survey rated the benefit of such buildings as important or very important: lower operating costs, 91 per cent; higher occupancy rates, 86 per cent; higher rental rates, 85 per cent; increased tenant productivity, 83 per cent; higher building value, 81 per cent; future proofing of assets, 79 per cent; and building quality assurance, 76 per cent.

If Auckland wants to become a great city, it has to be truly a leader in urban design, construction and performance. Waterfront Auckland says it is at the forefront of this thinking, and is pushing the principles with Wynyard Central.

Ludo Campbell-Reid has outlined his vision for a 21st Century Auckland CBD and Waterfront, with Waterfront Auckland meant to be picking up the ball and running with the 21st Century concept – sustainable urban design.

But uh-oh again we run into problems:

From SST:

Yes, it hopes to achieve one Living Building in Wynyard Central, and all the office buildings will earn a five Green Star rating and all the residences a seven on the Green Homestar rating. It says it is pushing its prospective development partners to aspire to more.

Waterfront Auckland’s Sustainable Development Framework ticks many of the right boxes. But a chart on page 8 tells a different story. Over the next five years, its goals will deliver only modest improvements in building performance. It sees the truly transformative projects as more than 25 years away. Moreover, Auckland Council’s own organisations are failing to work effectively together. For example, Waterfront Auckland’s attempts to get an innovation precinct into Wynyard Central have progressed no further than a vague memorandum of understanding with ATEED, the council’s economic development agency.

Likewise, it is struggling to get any traction with Auckland Transport on planning for much more public transport in the area. The whole Wynyard Quarter is in danger of being swamped by cars, contrary to Waterfront Auckland’s ambitions for a world-class, 21st century urban environment.

25 years away is the magical fairy land with pixies running around the garden. Especially when best sustainable urban design practice is already here, current and economically viable. As for Waterfront Auckland, ATEED and Auckland Transport not working together, had to laugh as we know those three CCO still think in nuclear silos to the point they could even have contempt against the parent organisation – the main Council.

Finally

The fundamental problem with Waterfront Auckland and its parent council is that they are failing to live up to their own goals. For example, Waterfront Auckland gave sustainability only four mentions in its 78-page annual reportfor 2013; it does not even do any sustainability reporting of its own organisation; and sustainability was a one-slide afterthought in a major presentation that John Dalzell, its chief executive, gave this week.

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Lip service, nuclear silo thinking, airy-fairy goals way down the line, mass pouring in of money into an area that does not truly lift the GDP performance of the CBD (5.5% without Port of Auckland included) and an area the market that earns us hard currency (exporters and innovative start-ups that make it) could utterly reject for “better” areas like Manukau or even Henderson (given the right indicators).

Not the particular way Council would want to see things go especially with the amount of money to be sunk into the CBD over the decade – with the real possibility of nothing to show in return…

 

Rethink time

 

The PwC report into Waterfont Auckland and planned developments

 

Waterfront Auckland’s Sustainability Framework