Urban Management Studies in the Urban Regeneration Context

Contents

Introduction

Chapter One
Macro-Level Theory: Global Restructuring and the Urban Space
Macro-level Theory: The Politics of Urban Regeneration
The Literature’s Evolution over Time
The Politics of Urban Regeneration
The Politics of Urban Regeneration: Diverse Settings, Diverse Actors

Chapter Two
Urban Regeneration in the Advanced Industrialized Countries
Public-private Partnerships and Flagship Projects
The Local and the Global In the Conceptualization of Urban Governance

Chapter Three
Urban Change in Post-Socialist Cities
The Socialist Legacy of Urban Development in Eastern Europe
Socio-Economic Transformations in the Baltic States

Chapter Four
Tourism and the Postwar American City
Urban Decline and the Search for Solutions in Baltimore, Cincinnati, Pittsburgh, and St. Louis After 1945

Chapter Five
Istanbul in Historical Context
Diverse Settings, Diverse Actors: The Turkish Context
Public Sector Actors and Entrepreneurial Activity
Private Sector Actors and Urban Entrepreneurialism
Community Involvement in Urban Land Development: Prospects of Democratic Participation

Chapter Six
Globalisation and Regeneration Management
Mapping The Territory
Scale and Context—Their Relationship to Place and History
Local Management and Local Administration: Challenge and Conflict
Local Regeneration Management and Local Governance: the Drive for Partnership and Collaboration
Regeneration, Globalisation and the idea of the Failed Neighborhood.

Chapter Seven
The Golden Horn in Transition: from a Space of Industrial Production to a Space of Cultural Consumption?

Chapter Eight
The Halic Area: an Analytical Evaluation
Different Projects, Different Dynamics of Power
Public Sector Initiatives: Community Involvement Through District Municipalities
Public Sector Initiatives: The Metropolitan Municipality of Istanbul Between the Local and the Global
Private Sector Initiatives along the Golden Horn
The General Picture
Other Projects in the Haliç Area
General Conclusions and Comparisons

Conclusion

References

Introduction

Urban waterfront regeneration started in the 1960s in the US, spread widely during the 1970s and 1980s throughout North America; in the following decades, it became a key factor in inner city redevelopment in Europe (Jauhiainen 1995: 3). It reflects efforts in various cities around the world to transform the de-industrialized, derelict urban spaces of late-twentieth-century capitalism in such a way that these respond to the newly rising demands of the global economy and, thus, once again emerge as attractive sites for different groups (Merrifield 1993, Feldman 2000). In physical terms, urban waterfront regeneration often involves a transition from former centers of industrial production, with warehouses and manufacturing establishments, to places with promenades, shopping complexes, luxurious residences, gentrified neighborhoods, office towers, and the like.

In this respect, urban waterfront regeneration can be situated within the broader theoretical framework that focuses on multiple processes of globalization and its impact on the urban space. More specifically, this phenomenon can be examined within a context of growing intercity competition, of intense efforts to market cities and push them up in the global urban hierarchy. Hence, the very same analytical lenses used for the examination of efforts to host mega-events (e.g. Gotham 2002, Carmichael 2002, Owen 2002), promote urban tourism (e.g. Mullins 1991, Whitson and Macintosh 1996, Law 2002), or create various urban imaging strategies (Chang 1999, Waitt 1999) and the like can be employed to elucidate the case of urban waterfront regeneration as well. What makes the latter special and also perhaps explains the reason why a large segment of the relevant literature focuses on this subject has to do with the fact that, first, due to previous port-related and industrial activity, the process of de-industrialization often has its most visible impact in these areas (Marshall 2001); and, second, due to their proximity to water and often also to historic city centers, these locations are especially suitable to satisfy the newly rising demands of global capital and its managerial elite.

In tandem with the rising popularity of urban regeneration more generally and urban waterfront regeneration more specifically in an increasing number of cities, a large body of scholarly work has approached this subject matter from diverse angles. While some studies have focused more generally on the role of cultural strategies and tourism as increasingly vital components of local economies (e.g. Bassett 1993, Mullinns 1991), others have concentrated on the impact of these efforts and on levels of unemployment, poverty and social inequality before and after such initiatives (Carmichael 2002, Gomez 1998, and Roche 1992, among others). Finally, some scholars have approached the issue from the perspective of the different kinds of actors involved in the process of urban regeneration, their organized interests and power dynamics (Feldman 2000; Bassett, Griffiths and Smith 2002; and Merrifield 1993 among many others). In line with the Lefebvrian (2000 [1974]) argument that any urban space is a reflection and an outcome of various social relations and dynamics of power among different actors, especially the last group of scholars has gone beyond the glamorous picture presented by gentrified neighborhoods, luxurious residences and shopping areas and instead tried to analyze this process in the light of the different actors’ demands and power struggles. It is in this light that, in reference to the radical reconstruction of the Baltimore Inner Harbor, Harvey (1989) has drawn attention to the reality as being “[o]ne of increased impoverishment and overall urban deterioration” (14) with “[p]lenty of rot beneath the glitter” (Szanton 1986 in Harvey 1989: 14).

This literature revolves around concepts such as “urban governance,” “urban entrepreneurialism,” and “public-private partnerships” and consists to a large extent of highly empirical studies, along with a more restricted number of analyses reflecting a relatively deeper interest in the theoretical aspect of the subject-matter. To that end, a more thorough theoretical approach to the study of the key actors and their power dynamics in such initiatives requires extensive research focusing on those studies that lie at the intersection of all of the above-mentioned fields of scholarly work, as well as a constant effort to tease apart the dynamics of power and the variables that lead to such power constellations as presented in the literature.

Chapter One

Macro-Level Theory: Global Restructuring and the Urban Space

The last quarter of the twentieth century has exhibited great change in almost every aspect of life. Even though the key characteristics, dimensions and future prospects of this change and the question as to whether or not it signifies a total break with the past remain central areas of dispute (Held et al. 1999: 3-10), there seems to be a consensus on the existence of major transformations in the organization of society (Amin 1994: 1, 2).

The concept of “globalization” has become the most common term referring to these changes. Somewhat crudely put, globalization has been defined as a multi-dimensional process, drawing attention to the increasing global interconnectedness in economic, technological, cultural, political, environmental and other aspects of life (Nash 2000: 47).

This section aims to present an analysis of this transition’s major impacts on urban space. For this purpose, I will begin with a brief summary of the main characteristics of these changes and continue with an account of how they have shaped cities. Among the multiple dimensions of globalization, the economic aspect has often been at the center of sociological interest (Nash 2000: 48). The argument goes that latetwentieth-century capitalism is undergoing a process of global restructuring, which redefines capital, labor and state relationships (Castells and Henderson 1987: 1, Harvey 1989: 121). The general perception is that during the period from 1945 to 1973, there was 22 a relatively stable and distinctive phase of capitalism, built upon a firm balance of power between organized labor, corporate capital, and the nation state. This period is called Fordist—mass industrial production; mass consumption; expanded forms of state interventionism facilitating the labor power’s reproduction, providing public services, and organizing labor in the form of centralized trade unions constituted its backbone (Harvey 1989: 125-137, Esser and Hirsch 1994: 75,76). Internationally, Fordism was associated with expanded world trade among various nation-states under US hegemony, with the incorporation of the non-communist world into the dynamics of capitalism facilitating the absorption of surplus production through new markets and the acquisition of cheap raw material for US corporations. Until the mid-1970s, this phase remained more or less stable. However, recurrent recessions and a slow-down of growth since the mid-1970s made it clear that the effectiveness of the mechanisms established in the postwar period were declining. The apparent inability of Fordism to contain the inherent contradictions of capitalism any further necessitated the above-mentioned redefinition of capital, labor and state relationships (Bhalla and Lapeyre 1999: 87, Amin 1994: 10).

Crudely put, the basic rationale underlying this restructuring was the effort to get rid of the rigidities in production systems, labor markets and state commitments that defined the Fordist period, in order to open up a new potential path for further capital accumulation (Harvey 1989: 142). Facilitated by the technological revolution and its impact on the provision of instant and up-to-date information (Castells 1991), the key features of this transition comprised: globalization of industrial production (Castell and Henderson 1987:4) and finance capital in search of cheap land and labor; contraction in manufacturing and rising levels of employment in services―especially in producer services such as finance, insurance and real estate, but also in consumer services such as tourism-oriented activities, luxurious residences and so forth (Harvey 1989: 161, 156); reduction in social benefits and weakening labor standards, leading to rising levels of badly paid, insecure and unstable jobs especially in the service sector (Crompton et al. 1996 in Bhalla and Lapeyre 1999: 64); and, lastly, reduced control of nation-states over economic policy (Nash 2000: 49). In the following, I will analyze the impact of this transition—which has been called, among others, “post-Fordist” and “post-industrial” (Amin 1994: 1)—on the urban space.

Prior to the global restructuring delineated above, during the heydays of Fordism, cities were conceived as engines of Fordist mass production. For it was in and around the cities and often on their waterfronts that industrial production was located (Keating 1993: 376). In the global system, compartmentalized into distinct territorial states under US hegemony (Brenner 1999:432), cities lost their constitutional and legal autonomy vis-à-vis their respective nation-states (Le Gales and Harding 1998: 125). Within this context, cities’ significance was evaluated in relation to the role they played in promoting national development (Keyder and Öncü 1994: 386). Furthermore, local governments, as extended arms of central government in the city, primarily focused on managerial aspects of urban policy, such as the local provision of services and benefits to the urban populations (Harvey 1989). Since the global economic crisis of the early 1970s and the subsequent restructuring of the economy, there have been major shifts in this configuration (Brenner 1999:432).

The search for cheap land and weakly organized labor and the consequent increase in capital mobility resulted in the decline of the manufacturing base of old industrial regions and cities (Paddison 1993: 339). This process is often identified as “deindustrialization” in the literature (Keating 1993: 375, Waitt 1999: 1061, Esser and Hirsch 1994: 80) and is visible in the major cities of both the advanced capitalist world and the so-called developing countries (Ribeiro and Telles 2000, Gilbert 1996: 18). In 24 both cases, industrial capital left inner cities and moved either to new countries or suburbs, or other cities in the same country. Particularly in those cities where the economic base relied to a large extent on industrial production, this decline in the manufacturing base came with growing levels of unemployment, abandoned land and property, as well as rising social tensions. For instance, Liverpool and Manchester are two of the most characteristic examples of the decline of historically powerful cities (Loftman and Nevine 1996: 991, Kotler, Haider and Rein 1993: 3).

The process of globalization more generally and the growing mobility of capital more specifically gave way to the rise of a special class of cities which grew as significant focal points in the organization of world economy. Friedmann (1986) and Sassen (1991) have introduced the notions of “world city” and “global city” in reference to these new command centers. The general argument is that the development of modern corporations and their participation in the world market necessitated centralized, top-level management and control of this global production system (Sassen 1991: 10). The global city is the strategic site where these management and control mechanisms are located. Sassen (1991) has argued that New York, London and Tokyo are the three main examples of global cities. Thus, in the light of these transformations, late-twentieth century cities can be perceived as being located within (or along the continuum) of an “urban hierarchy” (Brenner 1999: 433), with the ones most “successful” in attracting such control mechanisms being situated at the top and those that have increasingly lost their prominence at a lower level. The remarkable point here is that currently cities are assessed less in relation to their role in promoting national development, but more in relation to their position within this global hierarchy. The underlying characteristic of urban policy following these shifts has been the growing urge of local governments to find appropriate strategies in order to attain a better position in this global hierarchy of cities (Loftman and Nevin 1996: 991, Waitt 1999: 1061, Harding 1994: 371). This trajectory can be explained in relation to several points: First, the process of de-industrialization and the departure of manufacturing from inner cities led to the emergence of large tracts of empty land in city centers. As expected, the prospects concerning a potential revalorization of these derelict inner city locations according to the new demands of a globalizing capital were attractive to a number of actors both within and outside of the public sector. Obviously, a better position in intercity competition meant better prospects of revalorization. Second, success in the intercity competition for global investment was also perceived by numerous local governments as the only alternative to cure the negative impacts of economic restructuring. The idea was that over time the benefits of growth-oriented policies would trickle down to the most disadvantaged in the form of new jobs, lower levels of poverty and inequality (Hiller 2000). To that end, in this “post-Fordist” period when central governments are less and less capable of regulating their national economies (Mayer 1994: 317), local governments are increasingly abandoning their managerial approaches to urban policy and promoting growth-oriented projects that could satisfy the new demands of late-twentieth-century capitalism (Imrie and Thomas 1995). In Harvey’s words (1989), there is a substantial shift from managerialism to entrepreneurialism in urban governance.

A review of the literature indicates two basic ways of responding to the new demands of capitalism in cities: First, there are efforts to maximize the attractiveness of urban spaces for potential investors of late-twentieth-century capitalism, by providing the necessary infrastructure. These efforts often include investments in transport facilities, communication technology, convention centers, office buildings, tax incentives, and the like (e.g. Shahid and Weiping 2002). Second, there are attempts to maximize the attractiveness of cities for potential consumers of late-twentieth-century capitalism. These consumers comprise both, in Sassen’s words (1999), “the managerial elites” of global production networks, and potential visitors. The rise of new consumer landscapes—such as residential towers, shopping malls, golf courses, exclusive suburbs, cultural centers (Connell 1999)—and the increasing significance of urban tourism as a vital component of local economies (Judd and Simpson 2003) are all indicators of these efforts. The concept of “urban regeneration” has often been used in the literature to refer to these attempts at transforming the de-industrialized, derelict urban landscapes of the late twentieth century to cities with the features mentioned above (Hastings 1996, Brownill 1994, Healey, Davoudi and Tavşanoğlu 1992, among others). In an increasingly competitive environment, quite often the local government’s provision of the necessary infrastructure for both the investors and consumers of a globalizing economy turned out to be necessary but insufficient for climbing in the global hierarchy of cities. It has become essential to promote cities to its potential users, just like any commodity in the marketplace. Described as “city marketing” (Paddison 1993), this process often entails the adoption of certain urban imaging strategies and promotional campaigns (Chang and Yeoh 1999). It is within this context that the organization of mega-events—such as hosting the Olympic Games or significant exhibitions—has become extremely important in the last two decades, as these enable cities to achieve a higher profile in world markets (Carmichael 2002, Waitt 1999, Hiller 2000). Among all of these examples of urban entrepreneurialism inner city waterfront locations possess a special status. Prior to the global economic restructuring, due to easier transportation and trading prospects, industry was often located on urban waterfronts. Hence, it was especially in these locations that de-industrialization had often its strongest and most visible impact. Furthermore, urban waterfronts are often more suitable to be revalorized according to the new demands of the global economy. For not only does the existence of water itself render these locations attractive, but quite often waterfronts are also close to historical city centers (Marshall 2001). To that end, studies on urban waterfront regeneration constitute a significant part of the relevant literature (Feldman 2000, Malone 1996, Bassett, Griffiths and Smith 2002, Jauhiainen 1995, among many others). As stated earlier, different scholars have approached such transitions in the urban space of the late twentieth century from different angles. Among these, some tried to illuminate these developments from the perspective of the key actors involved, their organized interests, and their power struggles in the process (e.g. Merrifield 1993, Hiller 2000), and perceived urban regeneration as a reflection of the ambitions and organized interests of hegemonic powers in that area. A similar approach is advanced in this book. In other words, this book will examine the transition in the Haliç area from the perspective of the key actors and their power dynamics. It is to that end that the following section focuses on the literature focusing on the key dynamics of power in such initiatives. My goal here is twofold: first, to introduce the broader context within which the case of the Golden Horn can be situated; and, second, to acquire an analytical lens through which the transition in the Haliç area can be illuminated.

Macro-level Theory: The Politics of Urban Regeneration

The Literature’s Evolution over Time

Us Origins

Current literature on the politics of urban regeneration has emerged to a large extent within the environment of profound macro-level transitions after 1980. However, the basic reference point of this literature goes back to the US-based urban political economy dating from the mid-1970s. For in the US prior to the 1980s there existed already some of the conditions which in other national settings emerged in tandem with globalization and brought discussions on urban regeneration to the forefront. For instance, the weakness of the federal state, fiscal equalization schemes, urban planning regulations and the like were all influential in reinforcing US local government’s dependence on businesses and local development (Keating 1993: 374), long before discussions on multiple processes of globalization took center stage.

The growth machine theory (Molotch 1976, Logan and Molotch 1987) constitutes the initial approach to this subject-matter. The concept of the “growth machine” originates from Molotch’s influential work (1976), in which he conceives of urban space as the “areal expression of the interests of its land-based elites” (309). In this work, Molotch has argued that in any given city there are a number of actors—such as land and property owners, developers, realtors, construction firms, and so forth—who profit directly or indirectly from the intensified use of a given piece of land (Logan and Molotch 1987, in Harding 1994). Enhancement of land-use either increases the exchangevalue of these actors’ holdings, or it boosts the demand in their products and services. It is due to this prospect of profit that the land-based elites have a common interest in urban growth, the key indicators of which are rising population in the urban area, increased levels of commerce, land development, higher population density and so on (Molotch 1976: 310). Molotch’s land-based elites comprise local businessmen―for example, shopkeepers, hotel owners, realtors, lawyers―property owners, syndicators, as well as universities and the metropolitan newspaper. Universities might favor local growth, since it is conducive to their own plans of expansion. The metropolitan newspaper will increase its number of ad lines in tandem with an expanding metropolis. Thus, converging in the same imperative of growth, such actors form formal and informal communities, looking for prospects of shaping the urban policy-making process.

The assistance of governmental authority is indispensable in order to accomplish this objective. From tax rates to decisions concerning urban planning, government involvement has a major impact on the attractiveness of a particular urban space for growth-inducing investments (Molotch 1976: 312). Within this context, Molotch has argued that often a specific persons are drawn to politics. These tend to be businessmen, and quite often for those who come to office the imperative of growth—rather than redistributionist policies, environmental problems, or civil rights—emerges as the key function of local government.

Without going into a detailed analysis of its underlying reasons, Molotch argues that in the American context land-based elites have often been successful in dominating planning bureaucracies, political parties, and elected officials, pushing for urban policies supportive of these “growth machines.” He asserts that “historically US cities were created and sustained largely through this process” (1976: 312).5 As for the prospects of an anti-growth movement, concomitant to an emphasis on growth as the dominant ideology in most US cities, Molotch―very briefly―discusses some of the characteristics that the slowly and occasionally emerging countercoalition possesses. After drawing attention to the newly rising environmental movement and the middle-class professionals whose interests are not always directly tied to land, Molotch speculates on the prospects of the growth machine’s death and concludes by saying that “the historical record is not consistent with this thesis” (329). Molotch’s analysis of the growth machine in the mid- 1970s has been tremendously valuable in the sense that at that time it filled a gap in the literature which lacked a conception of urban space as a “market commodity, providing wealth and power” (309), thus reflecting the interests and power dynamics of key interested parties. His focus on the urban settlement as a political economy introduced the discussion of power and social class hierarchy to the field of urban studies in the USA at the time.

The late 1970s and 1980s have also produced another branch of literature focusing on the politics of urban land development in the US. Initially built on a number of empirical evidence and later on enriched especially through Neil Smith’s numerous theoretical inquiries (1979, 1982, 1987, among others), the US literature on “gentrification” “emerged on the heels of urban renewal, slum clearance, and post-war reconstruction programs implemented during the 1950s and 1960s” (Schaffer and Smith 1986: 347) and dealt with the rehabilitation of former working class neighborhoods by middle-class home buyers, landlords and professional developers (Smith 1982: 139). Compared with Molotch’s analyses of the Growth Machine, the discussion of gentrification has been significant in reference to two major aspects: First, Smith’s efforts to theorize the process linked gentrification to the structure of the capitalist mode of production and conceived its systematic recurrence in the late twentieth century in relation to the “massive restructuring of industrial production activity” (Smith 1982: 153). This point is important in that it enriches Molotch’s analyses of the actors who push for urban land development, by introducing the impact of higher political and economic contexts and structural transformations—such as state restructuring and capital accumulation. As the following will highlight in more detail, in the late 1990s Molotch’s analyses were criticized exactly for their negligence of such factors (Kantor, Savitch and Haddock 1997; Jessop, Peck and Tickell 1999). Second, the initial conception of gentrification as the transformation of former working-class neighborhoods to middle-class residential areas brought the concept of “local community displacement” to the forefront (Hartman, Keating and LeGates 1982; LeGates and Hartman 1986, all in Shaffer and Smith 1986) and instigated a number of studies concentrating on the prospects of local community resistance (e.g. Padilla 1987). The general assumption was that, even though factors such as the housing market conditions and the extent of political opposition were important, the potential success of local community resistance to the process of gentrification in the US still remained very limited. In short, the literature on gentrification which in greater depth analyzed major actors both pushing for and resisting to the process of urban land development complemented some aspects of the process that the Growth Machine Theory had neglected.

Discussions in Europe

During the 1970s and 1980s, when the growth machine and urban regime theories constituted the core areas of discussion in US urban studies, the European literature fundamentally lacked attention to the organization of local interest groups and urban politics. With relatively stronger states playing a considerable role in urban planning, land-use decisions, and fiscal equalization schemes, and consequently local governments less dependent on local businesses than their US counterparts (Strom 1996: 458-9), European urban studies at the time focused primarily on issues of collective consumption (Harding 1997: 291, Cochrane 1991: 295) and the role of the local government as the arm of the national welfare state (Keating 1993: 375). However, as the previous section has indicated in greater detail, the structural transformations of the late 1970s and early 1980s had a major impact on the priorities of local governments in Europe as well; following this trajectory, the key areas of discussion in European urban studies started to change.

Especially since the late 1980s and early 1990s, there is a substantial convergence in the main areas of focus of European- and US-based urban studies. Within a short period of time, a considerable amount of scholarly work emerged that—by way of making references to concepts such as “urban governance” (John and Cole 1998, Simpson and Chapman 1999, Pierre 1999, 2005, Desfor and Jørgensen 2004, Brenner 1999, among many others), “urban entrepreneurialism” (Boyle and Hughes 1995), “public-private partnerships” (Hastings 1996, Bassett, Griffiths and Smith 2002, Bassett 1996), “gentrification” (Shaw 2005) and “urban boosterism” (Barlow 1995)—tried to examine the politics of urban development in many European cities. This literature particularly focuses on the experience of the Western European city and concentrates more often on case studies, either in a single instance or comparing two or three cities (e.g. John and Cole 1998, Harding 1994, 1997, Jauhiainen 1995). Hence, the literature does not really establish an encompassing theoretical framework that could explain developments in diverse contexts.

The earliest applications of this literature have focused more on the convergence between European cities and their US counterparts and mainly proposed US-based approaches as a productive source to examine the changing forms of politics in European cities (Cooke 1988 and Lloyd and Newlands in Wood 2004: 2105). However, the literature that followed these initial studies has a much more critical perception of the applicability of US approaches within Europe (Cochrane 1991, Imrie and Thomas 1993, Boyle and Hughes 1995, Levine 1994, Strom 1996, Terhorst and Van de Ven 1995, Bongenaar and Malone 1996, among others). According to these studies, in spite of the recent convergence in the modes of local governance, fundamental differences remain between these two contexts, to be discussed below.

Throughout the post-1980 era, the North American interest in the politics of urban growth and urban regeneration continued to increase and produce a considerable literature. Making reference especially to Molotch’s and Logan’s analysis of the growth machine, this literature has tried to examine the subject-matter within the context of globalization. The general critique directed at earlier US-based studies often suggested that these had neglected the impact of higher levels of government, political and economic contexts (Kantor, Savitch and Haddock 1997) and structural transformations—such as the imperatives of inter-urban competition, state restructuring and capital accumulation (Jessop, Peck and Tickell 1999). At the same time, many acknowledged the continuing significance of Molotch’s underlying premises, arguing that the imperative for growth in cities and the significant role that private sector actors played in promoting this had intensified in the era of globalization (Jonas and Wilson 1999; Logan, Whaley and Crowder 1999, Harvey 1989). The literature on the process of gentrification has contributed to such contentions, arguing for the continuing validity of Molotch’s analyses as well. Especially towards the late 1990s and early 2000, the key arguments focused on the newly emerging super-gentrifiers, drawing attention to differences between today’s gentrifiers and those twenty to thirty years ago. Accordingly, these super-gentrifiers have much closer links to large-scale mobile capital and include financial consultants and lawyers, whose tolerance for diversity is much more restricted than that of their previous counterparts (Hackworth and Smith 2001, Lees 2000: 402). A further emphasis is on the increased involvement of the state as a promoter of urban land development, which, when compared to earlier decades, has diminished any prospects of successful community resistance to displacement (Betancur 2002). The differences between American and European cities, as well as among the European cities themselves, as studied in the literature, will be examined below. However, before arriving at this point, the following paragraphs will summarize some of the general themes recurring in the literature.

The Politics of Urban Regeneration

In general, terms, scholars writing on the dialectics of power in major cities of the late-twentieth-century advanced capitalist world have highlighted that, even though the nature of such power dynamics varies according to different historic national patterns of intergovernmental8 and state-market relationships (Harding 1994: 371), it is still possible to make several generalizations. First and foremost, the increasing role of various private sector actors in present day urban decision-making processes across diverse national settings is acknowledged (Hastings 1996, Bassett 1996, Imrie and Thomas 1995, Jauhiainen 1995, Owen 2002, Loftman and Nevin 1996, Cochrane 1991, Gomez 1998, Harding 1994, 1997, Levine 1994, Keating 1993, Lehrer and Laidley forthcoming, among many others). The more intensified private sector participation in urban policy can be related to two underlying reasons: First, the private sector interest in a potential role in urban development has intensified. More specifically, the macro-level transitions delineated above have created such an environment that the kinds of private sector interests mentioned by Molotch in the mid-1970s US context have started motivating a higher number of potential actors in a growing numbers of cities across diverse geographies (Logan, Whaley and Crowder 1999). In other words, the prospects of transforming urban space in line with the demands of the new, globalizing economy have accompanied new opportunities of profit-making for a number of actors—such as developers, realtors, urban gentrifiers, construction firms and so forth. Second, not only has the private sector interest in urban space intensified, but also private sector actors’ ability to influence urban decision-making for their own interests has increased.

With closer links to global capital, today these actors are more powerful when compared to their counterparts twenty to thirty years ago. Third, even if to differing degrees and at different governmental levels in diverse settings, today’s public sector actors are often more ready and willing to incorporate private sector actors into the process of urban policy formation (e.g. Merrifield 1993). This state of affairs can be related to two underlying reasons: First, one of the basic features of the structural transformations that emerge as a result of the globalization process involves the reduced control of the state over multiple aspects of life within its jurisdiction. In connection to the urban space, quite often this condition becomes visible in the form of a retrenchment in fiscal resources that are transferred from central to local governments, as well as in shifting more responsibilities to the latter. Within this context, quite often local governments’ need for fiscal resources and their dependency on local businesses to obtain them increases. Since the revalorization of former derelict urban landscapes comes along with the prospects of higher taxes at the local level, often the incorporation of the private sector into the urban decision-making process equals higher volumes of revenue for local governments. Furthermore, the restructuring of the state means that now there is also institutionally—that is, as a formal decision-maker in urban policy formation processes—more manoevering space available for private sector actors. Second, the relatively quick physical transformation of derelict, deteriorated urban spaces to centers with luxurious residences, nice cafes and restaurants through “successful” projects of urban regeneration often makes it possible for various public sector actors to argue that within a short period of time they have solved the problem of urban decay.

In sum, this indicates that today, in numerous cities and across diverse national settings, both public and private sector actors’ interests often lie in the more active participation of the private sector in the urban decision-making process; this leads to a general increase in private sector involvement in present-day urban policy formation. At the same time, however, and similar to what Molotch indicated in his theory of the growth machine, it is important for the private sector actors to have public sector cooperation as well (Mayer 1994). For these need governmental subsidies and powers in issues such as planning, tax concessions, and the like. Hence, in numerous cities of the advanced capitalist world, urban policies today are shaped to a large extent through various collaborations between public and private sector actors, and it is within this context that many scholars talk about the emergence and increasing role of public-private partnerships in urban governance. A second generalization in the literature on the politics of urban development in the advanced capitalist world suggests that within the context described in the previous paragraph, at least when compared to earlier decades, local communities’ demands and expectations often acquire only secondary importance. This state of affairs is obviously related to the above-mentioned entrepreneurial approach to urban policy-making that numerous public sector actors embrace. That is, on numerous occasions, when the state has acted as the facilitator of private sector involvement in the decision-making process, there is little room, and sometimes even none at all, for community struggle. At the same time, this situation is related to the fact that, through efforts of legitimization, public private partnerships often succeed in convincing communities of the trickle-down effect and benefits of such initiatives to “everybody” and, thus, in many cases appease the local communities (Hiller 2000, Lehrer and Laidley forthcoming).

Harvey (1989) has labelled this kind of transition in urban policy-making in the final quarter of the twentieth century a “shift from urban managerialism to urban entrepreneurialism.” In other words, he argues that in earlier decades urban governance used to primarily focus on “the local provision of services, facilities, and benefits to urban populations,” whereas now, it “has become increasingly preoccupied with the exploration of new ways, in which to foster […] local development” (3). This trajectory has led several scholars to argue that today quite often local governments try to appeal to outsiders—may it be visitors, tourists or investors—instead of focusing on the needs of local communities. In that respect, Merrifield (1993: 117) raises the question as to whether local governments today can really be perceived as the representatives of their local constituents. It seems fair to argue that, by creating cities that offer circus for outsiders when local communities are in need of bread, current practices of urban governance display major problems of democratic participation and representation (Eisinger 2000).

The Politics of Urban Regeneration: Diverse Settings, Diverse Actors

The pragraphs above have summarized the general arguments presented by a large part of the current literature on the politics of urban regeneration. However, as stated earlier, a more detailed scrutiny of the respective scholarly work reveals that, in different contexts, different actors come to the forefront. More specifically, even though private sector participation in urban decision-making has increased in many cities and publicprivate partnerships are being ormed, there often exist differences—for instance, in the relative weight of private sector actors’ capacity to influence urban policy, in the degree that local communities can resist such projects, and in the extent to which public sector actors can dominate such partnerships. The goal in this section is to highlight such differences, as well as to illuminate their underlying reasons. As mentioned, the scholarly literature focuses more often on the experience of the North American and Western European city. Thus, the focus of this section is constrained by the limitations of the existing literature.

The question of what aspects to focus on in order to explain the emergence of diverse power constellations in different settings in itself constitutes a relatively more recent but significant area of discussion (e.g. John and Cole 1998, DiGaetano and Strom 2003; Jessop, Peck and Tickell 1999, Sellers 2005). In many studies, scholars stress the important role that different factors can play in determining the kinds of actors that come to the forefront in such power constellations; these include fiscal equalization schemes, authority allocation among different levels of government (Strom 1996, Terhorst and Van de Ven 1995, Bassett 1996, Boyle and Hughes 1995, Keating 1993, John and Cole 1998, Harding 1997, among many others), the strength of the private sector (Kantor, Savitch, and Haddock 1997)―the level of this strength is obviously dependent on the volume of capital accumulated by businesses, urban planning regulations, other forms of restrictions put on urban land development and so forth (Strom 1996, Vicari and Molotch 1990)―and the democratic environment―that is, the prospects of local communities to have an impact on the urban decision-making process (Molotch and Vicari 1988).

An overall evaluation of this literature reveals that, in spite of major convergences between the European and North American cities in the final quarter of the twentieth century, one could classify the existing literature in three broad categories, in terms of the question of power dynamics in the promotion of urban growth and regeneration. The US context could be conceived within one category, the UK experience could define another pattern, and the case of Continental, mostly Western, Europe exemplifies a third category. This classification can be perceived as a spectrum, at one end of which one could situate the US experience, as an example of the most intense private sector involvement in urban policy-making, and at the other end the Continental European case, where private sector intervention is relatively more limited and community struggle seems to have more impact on the final outcome. The UK experience should be situated somewhere in between. In the following, I will illuminate these arguments in detail.

The US Context

In light of the kinds of characteristics delineated largely by Molotch’s studies, but later also by others (e.g. Hula 1990, Merrifield 1993, Betancur 2002), the US case demonstrates specific features. Here, local-central governmental relations are weak. In other words, local governments are highly dependent on local taxes and other forms of self-generated revenue. The central governments’ intervention in decisions concerning urban policy is limited—that is, compared to the central government, local governments possess the most important decision-making power in urban matters. Private sector actors are powerful. There is a strong private sector with a powerful national bourgeoisie and high numbers of upper middle-class gentrifiers; the state apparatus is highly accessible; land and property regulation is limited; and private land ownership is significant.

Community resistance does exist, but its impact is limited by the fact that voting mechanisms are not very effective and by a cultural, ideological background that accepts private interests’ dominance in policy formation, meaning that this is perceived as legitimate by a large segment of society.

In such an environment, businesses have a major say in urban policy. From multiple aspects, public sector decisions reflect business interests, while the needs and demands of local communities possess secondary importance only. Public-private partnerships are formed, and speculative projects, whose risks are largely carried by the public sector, are initiated. Gentrification constitutes a very likely outcome of regeneration efforts (e.g. Betancur 2002). High-rise office buildings, luxury residences, boutique hotels, restaurants, festival market places, aquariums, shopping complexes, exhibition centers and the like are some of the conventional physical consequences of such policies.

The Baltimore Inner Harbor Project is one of the most often quoted examples that represent such power dynamics (Merrifield 1993, Judd and Parkinson 1990, Harvey 1989, among others). The revitalization of the Inner Harbor area was proposed in 1964, at the request of the city’s mayor at the time, by the Greater Baltimore Committee which comprised the chief executive officers of the city’s 100 largest businesses (Hula 1990:194-5). The key objective of this initiative was to revitalize the degraded waterfront area of a declining industrial city through the introduction of tourism as an important redevelopment goal (Merrifield 1993). To that end, the Inner Harbor plan included the construction of parks, promenades, a marina, a convention center, and an aquarium, with the contribution of significant public subsidies. Key decisions were taken by agencies that used public funding, but functioned more like private organizations, in the sense that they denied public access to any of their records and meetings. The projects had a rather speculative character, for the basic idea was that large public subsidies were needed for the purpose of attracting future private investment. The Inner Harbor project became a commercial success, since private investment rapidly flew to the area, and this later on constituted a major inspiration for many European cities and their waterfronts Jauhianien1995). Although the project was perceived as a success story, critics have called attention to a number of downsides of this regeneration effort. Behind the image of prosperity, there was increased impoverishment and overall urban deterioration (Harvey 1989: 14); the created jobs were mostly low-paying and provided little prospects for further advancement; the process of regeneration itself was undemocratic, in the sense that key decisions were taken with only a very limited public input (Hula 1990: 209-210).

The UK Context

The experience of numerous cities in the UK could be classified in a separate category. Here, relations among different governmental levels are relatively stronger; businesses are not as powerful as in the US and, again in relative terms, the democratic environment seems to be more developed. In more detail, local governments are financially dependent on the revenue that they will receive from the national budget. The amount of this revenue and whether or not it is satisfactory in terms of covering local expenses is a different question, but the main point is that the local government does not possess significant volumes of self-generated revenue. Decisions concerning local development are to a high extent made by the central government. In other words, local government’s authority in urban policy is very limited. Relative to numerous examples from the US, the possibility of capital accumulation is more limited, in the sense that there is a weaker national bourgeoisie; capital is centralized at the national level; the state structure is not as accessible to business influence as is often the case in the US; and land and property are to a larger extent publicly owned (Hudson and Williams 1989: 26-31 in Harding 1991: 300). In spite of these rather unfavorable parameters from the perspective of businesses, the private sector’s influence on urban policy is promoted through a rather encouraging cultural and ideological background, due to a considerable degree of acceptance towards the ideals of liberalism and privatism. Regarding the “democratic environment,” both in terms of the effectiveness of voting mechanisms and a wellorganized civil society, the UK model is more developed than the US one. Nevertheless, in the light of the above-mentioned cultural and ideological background, there are limits on the impact that local communities can have on urban policy-making.

In an environment such as this one, central governments have a major say in urban policy and are the key decision-makers (Imrie and Thomas 1995, Bassett 1996, Boyle and Hughes 1995, Cochrane 1991). Businesses play a considerable role as well. However, in comparison to the US, this role is much more restricted. There is rarely a strong bottom-up push coming from the private sector actors. However, through a number of initiatives the central government provides businesses with privileged routes of access to the urban decision-making process, and it is often through these deliberate efforts that businesses get involved. Within this context, local governments often find themselves in a marginalized position. In a number of cases, they try to adapt to the given circumstances in order to preserve at least a small role in urban policy-making (Harding 1991: 306). As for the community’s reaction, even though in this model communities have more expansive tools of making their claims heard, growth-inducing projects still are initiated with a minimum amount of community engagement. Often, public-private partnerships with significant financial contributions from the public sector are formed, and speculative projects are initiated. Compared to the US, however, higher risks are involved here, in the sense that the possibility of failing to attract sufficient private interest are higher. Hence, the risks of speculation are considerably greater. Similar to the Baltimore Inner Harbor Project, the London Docklands are an oftencited example in the literature (Barnes, Colenutt, and alone 1996; Hinsley and Malone 1996, among others). As Barnes, Colenutt, and Malone (1996) have described, the London Docklands are a waterfront area located east of London. During the 1950s, this urban space was a thriving port and a significant industrial base.

Starting in the late 1960s, the first signs of economic decline emerged in the area, followed by the closure of several docks. Concomitant to these changes, the central government began to take interest in the economic development of the area. Initially, property and finance capital paid little attention to the Docklands. In this context, the central government took an active role in the revalorization process of the area and in 1981 established the London Docklands Development Corporation (LDDC) for the purpose of initiating an urban regeneration project. The LDDC acted as the extended arm of the central government.

The planning powers of a number of London boroughs were transferred to the government-appointed board of the LDDC. Private property interests were appointed to positions of power and became the board members of the organization. The corporation implemented a flexible and developer-friendly planning regime, which was presented by the central government as being in the interest of the whole nation. Partly through compulsory purchases, the LDDC absorbed the previously public-owned land into a single agency which prepared it for release for the purpose of private development. Major public funding was used for the provision of the necessary infrastructure and preparation of the land for development. In the subsequent year, the central government’s efforts in initiating the desired private investment were successful. There was an influx of massive investments in fashionable residential and post-modern office buildings, and during the 1980s, similar to the Baltimore Inner Harbor, the area became a model for waterfront redevelopment around the world.

The late 1980s were the harbinger of significant changes. The recession in the property markets at the time caused a major crisis for the London Docklands redevelopment project. Property values fell, vacancy rates rose, and various parts of the Docklands remained undeveloped. As Barnes, Colenutt, and Malone (1996) put it, the massive oversupply of space that was provided without a thorough consideration of demand rendered the Docklands the “victim of a recession to which it had contributed” (28). A model for redevelopment in the 1980s, in the 1990s the Docklands project started to be perceived as a costly failure in planning (29).

Continental Europe

Several Continental European countries, especially Western European ones with a strong statist tradition—such as France (e.g. Myron 1994, Keating 1993, John and Cole 1998), Germany (e.g. Strom 1996, Harding 1997, Judd and Parkinson 1990, DiGaetano and Strom 2003, Shaw 2005), and the Netherlands (e.g. Terhorst and Van de Ven 1995, Fraser 2003, Shaw 2005)—could be put into a separate category when it comes to the question of actors and power dynamics in growth-inducing initiatives. Here, intergovernmental relations are strong, the possibility of capital accumulation is weak (or at least weaker than in the previous two examples), and the democratic environment is well developed. There are strong fiscal equalization schemes that reduce local governments’ dependency on local taxes. In spite of recent processes of decentralization in urban governance, the central government continues to play a significant role in land development and urban planning. In addition to the parameters determining the presence of a relatively weaker private sector influence in the second model, the cultural and ideological background here also possesses a rather disapproving attitude towards business influence in urban policy-making. For instance, perceptions concerning the protection of historical heritage (Shaw 2005), attitudes towards the role of governmental regulations in the economy and the degree of influence that architects are supposed to have on local development projects (Strom 1996) are all conducive to a more critical assessment of the private sector’s impact. In terms of the democratic environment, there are both effective voting mechanisms and a well-developed civil society with strong communities and non-governmental organizations.

In this context, businesses are not very prominent. Still, various public-private partnerships are formed, and these try to shape urban space, but their degree of influence is rather restricted, especially when compared to the previous examples. Communities and non-governmental organizations are powerful, and the central government tries to find a balance between the economic rationale of globalization and the needs and demands of local communities. Hence, between the second and third categories there seems to be a major difference in terms of the role of the central government. In both of them it is a crucial player. However, in the former it plays an active role in promoting business influence in urban policy, whereas in the latter it rather tries to find a balance among the different demands on urban space today. In tandem with recent waves of decentralization, local governments’ involvement in projects concerning local economic development has increased. Nevertheless, due to continuing strong intergovernmental relations this involvement is still quite limited. Consequently, in this group of cities one often encounters projects that are shaped to a large extent by various urban planning regulations. Rent controls, height controls, protection of historical heritage and the like become important concerns (Shaw 2005, Strom 1996).

Strom’s (1996) study of Berlin is a good example in this respect. She has analyzed the 2000 Olympic Games campaign and the redevelopment efforts at the Potsdamer Platz during the 1990s. Following the unification of Berlin, the city’s leaders perceived the 2000 Olympic Games as a valuable opportunity to introduce Berlin’s new face to the world. The plan included the formation of a public-private partnership, in which public investments would be restricted to the provision of infrastructure in transportation, while the rest of the development would be covered by the private sector. However, from the very beginning heavy criticism was directed at any efforts to host the Olympic Games.

From the local press to the Berlin Left, even to the very apolitical, there was a tremendous lack of public support, which seems to contradict the experiences of other cities. A survey found that up to two-thirds of Berlin’s inhabitants opposed the games. In the end, Berlin did not get to host the Olympic Games (469-470). The plans concerning the redevelopment of the Potsdamer Platz included the sale of several vacant sites to Daimler Benz and Sony Corporation, which would build their headquarters and additional rental offices in the area. Strom’s analysis portrays the regulations within which both companies had to formulate their plans for the area. An architectural competition in which a jury of professional architects appointed by public officials selects the plans for an area is the conventional tool of German development planning (Becker 1992 in Strom 1996: 471). The very same tool was implemented in the case of the redevelopment of Potsdamer Platz as well, and, in line with the winning plan, it was decided that the area’s new look had to comply to Berlin’s traditional block structure.

Following the competition, detailed building plans for the site were prepared, including a several-month public comment period (470-471). This was the basic way in which redevelopment efforts in Berlin were shaped. In comparison to the first two categories, there seems to be a greater emphasis on the expectations of the local community and public perception. In summary, in terms of the power dialectics in urban regeneration politics, the US, the UK, and Continental Europe could be perceived along a continuum. At one end of this continuum, one can situate the US, while at the opposite end the Continental European experience can be placed, with the UK somewhere in between. The main criteria for such a continuum has to do with the growing private sector involvement in the process of urban policy-making and a diminishing local community impact with more limited prospects of effectual resistance, as one moves along the continuum from Continental Europe to the US. The diversity among such dynamics of power can be related to the particularities of various arrangements at the local level. More specifically, it has to do with variables such as the strength of the national bourgeoisie, the accessibility of state structures to businesses, local government’s dependency on local businesses for self-generated revenue, the presence of a tradition of community resistance and NGO-formation at the local level and so on. Depending on the way in which such variables materialize themselves within their specific local contexts, different actors can come to the forefront as key decision makers in urban policy formation.

As mentioned earlier, in spite of such differences in the degree of private sector participation and level of community resistance, the general assumption remains that in the final quarter of the twentieth century private sector participation in urban policymaking as increased; quite often, this state of affairs becomes visible in the form of newly emerging public-private partnerships; even if to different degrees, consequent processes of gentrification and community displacement can be found over a wide spectrum of cities in diverse geographies–in Harvey’s terms (1989), these developments signify a shift from “urban managerialism” to “urban entrepreneurialism.”

Chapter Two

Urban Regeneration in the Advanced Industrialized Countries

This chapter examines the causes, mechanisms and results of urban waterfront revitalization in the advanced industrialized countries. It provides a theoretical framework for the analysis of waterfront regeneration in Tallinn. In reviewing the processes underlying waterfront regeneration during the last two decades as well as the mechanisms of regeneration, I pay particular attention to the role of local leadership or governance in regeneration projects. First, I focus on the larger-scale processes that produce waterfront revitalization. Then, I turn to the mechanisms and results of the regeneration processes.

shipping. Increasing ship size and industrial growth were the major factors producing port change until the middle of the 20th century. Port activities demanded ever deeper waters and more space to accommodate the wide range of storage, customs and transportation facilities and ever more complex technology employed in port activities. As a result of industrial expansion, a belt of industrial and transportation activities developed between the port and the city. Beginning the 1950s, however, changes in maritime technology resulted in the decline of industrial waterfronts. Ever larger trade flows and containerization necessitated the shift of industrial port activities from congested central cities to deeper waters and cheaper land outside urban areas to take advantage of containerization. Industrial waterfronts started losing both shipping and related industrial activities. Waterfront decline was further advanced by highway construction, particularly in North America, which occurred between the waterfront and the downtown. This separated many waterfronts functionally and visually from the rest of the city. The problems were further compounded by other structural changes, such as suburbanization, in the advanced industrialized countries. By the 1970s, as both waterfront areas and central cities more generally had been experiencing loss of investment and middle-class residents for more than a decade, a strip of decline had emerged between the city center and the port. Industrial use had left waterfront areas with serious pollution problems and long-term structural decline had eroded their image (Campbell 1992;Pinder, Hoyle, and Husain 1988).

From the 1970s onwards, numerous waterfronts have undergone a reorientation from industrial to commercial, residential and recreation areas (Breen and Rigby 1994, Hoyle Pinder and Husain 1988, Malone 1996a; Wrenn 1983).

Central location is the major asset of urban waterfronts in this transition. As central cities in general have become more favored places of investment, the attractions of waterfront areas for working, living and recreating have been “discovered”. Marinas, promenades, condos, hotels and a wide range of retail and catering establishments have been constructed in the formerly industrial waterfronts. These areas are functionally reconnected with the city center and turned from urban backstages into showcases. Today’s urban waterfront is most likely not an area of decay but of leisure, hype and conspicuous consumption. Vacant or underdeveloped areas in central cities are increasingly portrayed as an opportunity to recreate the true function of the city: a place of communication instead of a locality of industrial production (Van der Knaap and Pinder 1992). Most big port cities present waterfront revitalization projects: prominent examples include Toronto and Vancouver in Canada; Baltimore, Boston, New York and San Francisco in the United States; Sydney in Australia; Cape Town in South Africa; London, Liverpool, Manchester and Cardiff in the United Kingdom, as well as Barcelona, Copenhagen and Rotterdam in continental Europe. The list is far from complete but nevertheless indicates the international extent of waterfront revitalization efforts. There is now a substantial literature on the architectural (Crilley 1993; Edwards 1992); historic (A1 Naib 1992), planning (Breen and Rigby 1994; Gordon 1997; Wrenn 1983), political (Batley 1990; Brownill 1993) and geographic (Hoyle, Pinder and Husain 1988;Malone 1996a) aspects of waterfront regeneration. Urban waterfront revitalization has become a prime example of the changing urban landscape in the 1980s and 1990s.

The wave of large-scale waterfront revitalization projects takes place amidst global economic, political and social restructuring in the advanced industrialized countries, with waterfront revitalization commonly being conceptualized as amanifestation of that restructuring. Global restructuring needs to be seen as an amalgam of economic, social and political processes rather than one single process. According to Fainstein (1990), there are several elements in restructuring. For example, it involves the transformation of economic bases of cities in the advanced capitalist world from manufacturing to services, including the rapid growth of the producer services sector within cities at the top of the global hierarchy; the simultaneous concentration of economic control within multinational firms and financial institutions, and decentralization of their manufacturing and routine office functions; the development of manufacturing in the Third World; and the rise of new economic powers in the Pacific Rim (p. 120). The resulting mode of production is variously labeled informational (Castells 1989), flexible accumulation (Harvey 1989), post-industrial (Logan and Swanstrom 1987) or post-Fordist (Amin 1995).

1. Global restructuring affects all aspects of society and is among the key topics in urban geography today. From the standpoint of waterfront revitalization in particular, three aspects of urban restructuring merit most attention: (1) the growth of producer services which require centrally located quality office space; (2) the increasing importance of tourism and leisure services in the urban economy; and (3) changes in residential structure, frequently termed gentrification. Together, these interrelated trends have underlain the transformation of the economic and residential structure of waterfront areas. The changing function of urban waterfronts in regard to those three trends is summarized below.

Producer Services Producer services ensure the management, control and servicing of a technologically and organizationally increasingly complex production. They include finance, advertising, accountancy, real estate, insurance, design, architecture, engineering and numerous others closely linked to the command and control of production. These services, particularly the so-called FIRE (finance, insurance, real estate) services, have been among the most rapidly expanding sectors of the economy since the 1970s (Sassen 1994; 1991). Their production requires easy access to sophisticated information, advanced telecommunications and highly skilled labor, all of which are best available in big cities. Telecommunications and transport technology, such as teleports and international airports, require large investments in infrastructure and are thus viable only in large population centers. Therefore, business services tend to concentrate in the largest cities in the urban hierarchy, as well as in central locations within those cities. Contrary to the perceptions that advances in the telecommunication and transport technology might decrease the importance of city centers in the global economy, the concentration of organizational and command activities in the central business districts has in fact increased (Daniels 1993)

2. In terms o f command and control functions, such as stock exchanges, top investment and law firms or government, face to face contact has not lost its importance. Higher order business services associated with command and control activities continue to cluster in central business districts (CBD) in order to facilitate that interaction. As waterfronts are commonly located close to the CBD, and are under-utilized in terms of their present land-use, they become logical locations for producer services. It is even argued that due to the concentration of higher order command services as well as advanced transportation and telecommunications infrastructure in metropolitan areas, economic development is increasingly based on urban nodes and networks rather than the nation-state (Agnew and Corbridge 1995; Sassen 1991). Castells (1989; 1996) develops the concept of the “space of flows” to capture the tremendous importance of capital, information and travel flows in the global economy. Hence the concept of global cities or world cities as global command and control centers has developed. Such cities are not necessarily the largest centers of total production but they dominate command, control and interpretation functions (corporation headquarters, banks, stock exchanges, international organizations, fashion, architecture, education, consultancy) (Sassen 1991). Zukin (1992) uses the term “landscape of power” to describe such concentrations of economic and cultural power as Battery Park City in New York or Canary Wharf in London. Significantly, both of these developments are located in waterfront areas.

The concentration of higher order business services has had a great impact on the built environment of central cities. The rapidly changing and expanding service sectors, such as finance, have exceptional requirements for dedicated, highquality buildings. Offices not only have to meet the rapidly changing technical requirements but also reflect the increased importance of location and architectural design which will benefit the prestige of firms, either as tenants or owners. Aesthetics, such as a design by a famous architect, plays a great role in the pursuit of prestige and symbolic power (Ball 1994; Crilley 1993). The concentration of offices and highly paid jobs in city centers attracts functionally related developments like hotels, restaurants, convention centers, specialized retailing and upscale housing. Because those uses have the need and the capability to occupy amenity-rich central sites such as waterfronts, the increasing economic importance of the service sector in the world economy contributes to waterfront revitalization. Tourism and Leisure Tourism is now the world’s largest industry in terms of employment, providing 10.6% of jobs globally. The World Tourism Organization estimates that the number of tourists will increase 5% annually until the year 2010 (Law 1993).

The tourism sector includes transport, retail, accommodation and catering as well as various forms of entertainment and recreation services. For every person employed in serving tourists directly, another job is created in retail, catering and other related branches of the economy. Urban waterfronts are typically close to the city center and feature natural amenities frequently combined with a unique historical ambiance. Not surprisingly, those areas have become major tourist destinations (Ashworth and Tunbridge 1990; Breen and Rigby 1994). As tourism is perceived to be a growth industry worldwide, it has been a logical strategy for many cities to pursue its promotion at the waterfront. Tourist oriented facilities are the centerpieces of rejuvenated waterfronts in Boston, San Francisco, San Diego, Sydney, Baltimore, New York, Rotterdam and elsewhere. The leisure appeal of waterfronts, combined with the rise of environmental concerns, has stimulated clean-up operations and thus made formerly polluted port areas available for development. In addition, the leisure appeal of transformed waterfronts ensures customers for various services and thus contributes to further physical regeneration. In Baltimore, for instance, the numbers of tourists doubled as a result of waterfront regeneration (Wrenn 1983). From the perspective of local boosterism, tourism improves the image of the city center for the guests and the residents of the city alike. The tourist bustle and activity, together with trendy restaurants and boutiques, attracts wealthier individuals to purchase real estate in the waterfront areas, thus bringing residents back to the city center, albeit to a limited degree.

Tourism heightens public awareness of an area’s heritage but also intensifies commercial pressures on that heritage. Tourism growth usually results in a “cleaning up” of waterfront areas but it may also create homogeneous sterile areas void of the diversity and uniqueness that initially attracted tourists. In certain instances like Seattle or Copenhagen, waterfront revitalization has facilitated the preservation of historic buildings (A1 Naib 1992; Wrenn 1983). In other cases, the packaging of maritime heritage for tourist consumption has been criticized for reducing heritage to a commodity, a background for relatively homogeneous shopping centers and restaurants; South Street Seaport in New York can serve as an example of such outcome (Boyer 1992).

Residential Restructuring Housing in waterfront areas differs from most of the housing stock in large metropolitan areas. It is frequently old housing, sometimes with historic value, located in the inner city. Waterfront areas provide water views, an increasingly valued amenity. Prior to regeneration, waterfronts were chiefly associated with low income, working class neighborhoods, mostly for those who labored on the waterfront. Urban restructuring and regeneration has considerably changed that picture. In many countries, the 1980s witnessed great surges in the demand for homeownership. This trend is, in part, related to urban restructuring and regeneration. Income data from the 1980s show marked shifts of income and wealth shares away from lower income groups, particularly in the USA and the UK. These changes benefited owner-occupied housing markets for the middle-to upper income groups (Ball 1994).

Waterfronts became prime targets for new construction. Low income renters were now squeezed out of inner cities, including those parts functionally linked to waterfronts, and replaced by higher income homeowners. That process, termed gentrification, is defined by the American Heritage Dictionary of 1982 as “the restoration of deteriorated urban property, especially in working-class neighborhoods, by the middle and upper classes” (quoted in Smith and Williams 1986: 1). High income residents attract expensive restaurants, boutiques, art galleries etc. and contribute to further redevelopment in the area. Therefore, gentrification is an integral part of waterfront regeneration. Gentrification is among the most discussed aspects of urban revitalization in the geographic literature (Boume 1993; Ley 1996, Mills 1993; Rose 1994; Smith 1979; Smith and Williams 1986). An in-depth analysis of this process is beyond this study. In broad and simplified terms, the central debate has been between production- versus consumption-side explanations. While the first explanation stresses the importance of economic factors underlying gentrification, the latter explanation emphasizes lifestyle and consumer preference as the driving forces of gentrification. Some argue that gentrification is integrally connected with economic restructuring, particularly to the emergence of the rent gap. Due to the flight of capital from central cities to the suburbs, inner city properties became relatively inexpensive. As a result, profits could now be made in rehabilitating that old housing stock and beginning roughly in the 1970s developers became interested in inner cities. Therefore, structural trends and property developers are the driving force of gentrification. According to Smith (1979), gentrification represents speculative development for profit, the flows of “capital, not people” back to central cities. Others (Ley 1996; Mills 1988) argue that gentrification is a part and parcel of the changing lifestyles and consumer preferences.

These involve the emergence of a group of middle to upper income professionals, the so-called new middle class, who are willing to pay high rents for central location. For the new middle class, easy access to the CBD where many of them work, as well as the views, interesting and atypical architecture, and access to central city retail, restaurants and cultural amenities are all important factors in choosing residential location. The demand side explanation emphasizes changing consumer preferences, such as conspicuous consumption and the newly fashionable urban lifestyle. According to that explanation, the demand of the new middle class constitutes the driving force of gentrification. Residential gentrification, whatever its causes and extent, brings affluent residents to the central city and adds to the viability of large-scale redevelopment projects on urban waterfronts. It provides further evidence of the restructuring of urban space and built environment that underlies waterfront revitalization.

Because waterfront rejuvenation is costly and time-consuming, cities often turn to existing developments for ideas in order to ensure the success of their own projects. For, example, Dublin’s project has been modeled after developments in Boston and Barcelona (Malone 1996b), whereas Cardiff relies heavily on the experience of Baltimore (Tweedale 1988). Likewise, London Docklands is frequently referred to as an example of how not to develop a waterfront area (Brownill 1993; Malone 1996a). As a result of such modeling, revitalized waterfronts bear strong similarities in terms of their appearance and function, as well as in the organizational setup and management of the specific regeneration project. A rejuvenated waterfront typically includes shopping and restaurant complexes which are oriented to souvenirs, luxury items and other holiday shopping (Boston, San Diego, New York, San Francisco). The tourist industry has a strong presence through hotels, convention centers as well as museums or an aquarium (Baltimore, Rotterdam, Seattle). Such developments also feature marinas, parks and promenades, as well as luxury residential space, often in the form of high rise condominium or apartment buildings that provide valued, sometimes spectacular views.

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