But I hadn't caught this angle: expropriation risk. From this weekend's Press:
How much work would you put into planning what to do with your property if, on top of the insurance and regulatory hassles, this kind of thing loomed?So the CCDU [Central City Development Unit] was set up as a development agency to do it the other way around - begin with the project and then design it to achieve the masterplan's objectives. Let the building heights, parking access and other details flow from the logic of the intended outcome.Elder says this is what surprised him - the boldness of the new approach.The CCDU design consortium, led by planning consultant Boffa Miskell, has been told to forget about land ownership, road grids and other restrictions, and simply put anchor projects, such as a new conference centre or sports stadium, where they make most sense, he says.The city's problem is that property is split into thousands of individual titles, so any rebuild was always likely to be a disjointed, piecemeal affair.However, the CCDU, backed by the power of Cera, can now come in over the top. Land can be amalgamated, by force if necessary. Owners are even being warned that new buildings that get in the way may get knocked down.Elder says there is a clear determination to develop areas of the city as a coherent package."Getting the right result is more important than being constrained. We will fail through being timid."It is the only way to bring in the corporate-scale investment needed - the offshore money from Australia and Asia, he says."They're saying we will put out a proposal call on two city blocks for this type of development in there - whether it's a health precinct, residential, business, a convention centre and hotels - and get people to come and bid."And if we have to get rid of a landowner or two, or close streets to do that, then we will if the quality is good enough and the business case is good enough."There will be property owners who will complain, says Elder, but for most it will be a better deal. They will end up with shares in a larger land-owning company. [Emphasis added]
You don't need compulsory acquisition to amalgamate lots of small titles. Just buy options on the properties you think might be needed for any project. Any of the option contracts can specify a schedule of compensation prices that rise with how far any owner's gotten through redevelopment when the government wishes to exercise the option. Do it right, and there's no incentive to sit around waiting to see if you'll be expropriated.
There's a great case for buying out landowners to make way for big projects so long as those projects are worthwhile. But I'd be awfully nervous about this kind of language if I were a downtown land-owner and wondering whether I should bother rebuilding.