Feb 222012
 

Almost every time Karin Flavill looks at the design for the Granite Web, the same question comes to mind. “What would Howard Roark think?” Intrigued? Read on.

Howard Roark is the hero of The Fountainhead, a novel by Ayn Rand.

Rand is a controversial writer; aspects of her objectivist philosophy were transported across the Atlantic decades ago and transformed into what we call Thatcherism, so it’s safe to say that she draws strong opinion, from those who have heard of her, both here and in the US.

The attraction of The Fountainhead for me was that it gave me a glimpse into the unknown, that a philosophy designed to help the wealthiest members of society feel not simply financially superior to those who struggle, helps them feel morally superior to them too.

What is it that tyrants see that allows them to derive a sense of well-being when they look in the mirror? Reading Rand can help you find out, even if it’s unlikely that in reality, many of society’s bullies and elitists have the personal qualities and ethics Rand depicts in her heroes.

Roark may be a more interesting and relevant reference point than some other fictional characters who have entered the Granite Web versus Union Terrace Gardens debate. Jake the Ghost and Morris the Monkey for example, as promoted by the BIG Partnership, seem to have a peculiar and hopefully incorrect impression of what moves Aberdonians to vote.

Roark is his own man, and is Rand’s idea of the Perfect Man. A gifted and original architect, loathed by the majority for his innovation and commitment to the future, he despises architecture which draws irrelevantly from the past. His designs are modernistic and often hard for people to understand. The few who do understand become his friends, and are held up to the reader as exemplary beings.

In some ways, Howard Roark would seem to be another ideal spokesperson for the City Garden Project. On the other hand, this objectivist hero’s deepest contempt would be reserved not for those who disliked his designs, but for that partnership between business and government which is so conducive in the long run to crony capitalism. Hello, ACSEF.

  The pro-Union Terrace Gardens lobby regards the existing Gardens as a unique prize which could be something magical

Leaving the politics aside for a moment, would Roark look at the design and love it? I don’t know. I’m not an expert on architecture, but I do know a little more about people, and about conflict, and about the factors causing people beginning to feel alienated in their own city. Such doubts seem to be at the heart of this debate.

The pro-Granite Web lobby feels that Aberdeen requires a drastic makeover for it to become a place they would want to continue living in and that others would want to move to. The pro-Union Terrace Gardens lobby regards the existing Gardens as a unique prize which could be something magical if only people who understood it were listened to. The original Peacock Visual Arts design symbolises what could have been.

Throughout The Fountainhead, examples and analyses of the character’s genius as an architect are provided. One passage is, for me, particularly telling. Self-made man Mr Mundy has heard that Roark is a great architect, and would like Roark to design a house for him. Roark meets with him to ascertain what kind of man he is and subsequently what kind of house he would be happiest in.

“There was a place,” said Mr Mundy, “Down there near my home town. The mansion of the whole county. The Randolph place. An old plantation house, as they don’t build them any more. I used to deliver things there sometimes, at the back door.”

He goes on to describe the ways in which he would like to recreate that dream house, the house of his aspirations. From what we already know of Roark, he would dislike the notion of recreating something from the past. However, that’s not at the root of his disapproval of Mr Mundy’s aspirations. This is:

“It’s a monument you want to build, but not to yourself. Not to your life or your own achievement. To other people. To their supremacy over you. You’re not challenging that supremacy, you’re immortalizing it….Will you be happy if you seal yourself forever in that borrowed shape?…You don’t want the Randolph place. You want what it stood for.”

In other words, it’s not simply technical skill, the vision of the artist and the ability to give the client what he wants that makes Roark a great architect. He sees who people are, not as they want to be seen, or as they try to be seen, but as they are. It’s this ability to look past the hype, the pretence, self-advertising and PR that enables Roark to build houses in which people can feel truly at home.

Think of your own dream house. Would it be one that somebody else had designed? A talented design team who would create something that was a compromise between their personal tastes and your picture of who you would like to be? Who furnished it in accordance with those same principles? Would it be your home, or would it be a design piece reflecting aspirations of who you wish you were, rather than who you really are?

  Who are we, in Aberdeen? A conflict like this forces us to consider that question in some depth

The promotional video for the Granite Web presents a futuristic world peopled with white, transparent figures ambling aimlessly through flower beds, staring uncomprehendingly at car parts dangling from a roof, drinking coffee. Observe, consume, observe and consume.

These transparent figures aren’t creators or innovators. They simply absorb, passively, that which has been transported from elsewhere to make the city seem more impressive to outsiders. A place that might, at some future date, be awarded City of Culture status!

The promotional literature keeps insisting that this will be the people’s park. It encourages readers to imagine themselves consuming all that the park has to offer, in the belief that this will result in them achieving a sense of ownership over it. There will, we’re promised, be spontaneous performances, but it’s not clear who will provide these. Perhaps musicians drafted in from outside.

Who are we, in Aberdeen? A conflict like this forces us to consider that question in some depth. My impression, living here, has always been that Aberdonians tend towards reserve, despite night-time scenes on Union Street when alcohol loosens inhibitions. The notion that we can buy a totally different character for Aberdeen, via an expensive raised park, seems dubious at best.

Union Terrace Gardens exemplifies the typically reserved nature of the Aberdonian. Like a Christmas tree that contains only a few, semi-concealed fairy lights, it is capable of emitting the magical quality that a garishly decorated tree cannot. The magic of mystery and discovery, and something very different from the usual variation on the iconic city centre park that is springing up all over the world.

One person’s iconic, radical, inspirational park is another person’s pretentious vision of future dystopia. I’ll admit I belong to the latter category, which is why I’ve already voted to retain, and improve, Union Terrace Gardens. Peacock Visual Arts was a local initiative which would have provided a place where people interested not just in consuming the arts but in contributing actively to them could have congregated. That was an exciting notion.

The Granite Web, on the other hand, constitutes yet another ‘space’ in which the people who live here may perform a passive consumer role.
Sir Ian Wood believes that he is giving Aberdeen a gift, and has expressed hurt that many in the city fail to appreciate this. The difficulty is that altruism doesn’t always create a sense of self respect in the recipient.

The price paid for that altruism is that the opportunity to create and innovate is taken away from people in the community, limiting their opportunity to participate to that of being passive consumers. For some, regardless of the risk of being branded ingrates, that may be too high a price for them to enter voluntarily into this particular contract.

Feb 192012
 

TIF – doesn’t this American innovation in borrowing just sound fantastic?  You get to ‘unlock’ money, re-develop an area, and money comes flooding in.  What could be wrong with that?  Karin Flavill looks across the pond to the home of the junk bond and bad mortgages, and doesn’t like what she sees.

While arguments rage over the future of Union Terrace Gardens, there’s consensus about one thing.  Tax Increment Funding is a somewhat difficult concept to get to grips with.  Not because the basic definition is complex.

TIF funds development by borrowing against future business tax gains arising as a consequence of that development.   New developments mean new business rates.  The local authority keeps a portion of those business rates (from businesses that wouldn’t have moved into the area but for the development) to repay the loan.

The complexity arises in assessing how this mechanism can be applied in a manner that avoids various potential pitfalls.  TIF is still very much in the experimental stages in the UK, so we lack a domestic reference point to understand how well the process is likely to work from start to finish.

When business is attracted from one area to another by a TIF funded development, it may be at the expense of another area.  This is known as “displacement”.   The area benefiting from TIF is pleased to lure business away with its spanking new TIF-funded development.  The region losing out wants some protection against financial detriment.

The TIF scheme provides that tax increment coming at the expense of another region can’t be retained by the local authority to make TIF repayments.  Like other NDRs, those increments must be sent to Central Government who will pool them with other funds then redistribute the funds equitably among regions.

Rather than being a tool to give cities a competitive edge and win City of Culture status for celebrated developments (the vision currently being promoted in CGP supporters’ referendum campaigns), TIF was first developed in the US as a means of helping regions to improve their most blighted areas.    Gradual shifts away from this philosophy, and increasingly creative ways of arguing blight, have led to many states in the US tightening up legislation to prevent TIF from being awarded except where genuine blight is demonstrated.

Chicago is often cited as example of the TIF scheme being misused to benefit the areas that least need it.  In August last year, a report was released outlining areas for improvement in the operation of TIF in that city.  The report highlighted problems regarding the monitoring of TIF expenditure.

Taxpayers had not been afforded easy access to information that would help them understand the TIF process or to evaluate the performance of the investment.   This reduced transparency of the process.

  although the initial cost proposed was $224.3 million, ultimately the park cost $482.4 million

The harder it is for the ordinary citizen to understand the TIF process and to evaluate the success of the development it funds, the greater the potential for corruption and abuse of the process by those who do understand it, and who can make it work to their own advantage.

That some will seek and gain an advantage through cronyism is an unfortunate element of life from which no city is immune.

In the 1990s, Chicago Mayor Daley (no relation to Arthur) developed a strong attachment to a project that would come to be known as Millennium Park.  A 16-acre landscape situated over an underground parking structure, it was built on top of Railroad tracks in an existing park called Grant Park.  The architect involved was Frank Gehry who had won international acclaim for the Guggenheim Museum in Bilbao.  The Chicago Tribune enthused that:

“The most celebrated architect in the world may soon have a chance to bring Chicago into the 21st Century”.

The park has certainly won many admirers worldwide and is, in many ways, an excellent model for what the City Garden supporters are hoping that project will become.   Properties in the immediate surrounds have become very fashionable and have increased significantly in value.

For others there has been a hefty price tag.  For example, although the initial cost proposed was $224.3 million, ultimately the park cost $482.4 million.  The park has come at a very high price to Chicago residents in terms of cuts to funding of public services and job cuts that were necessitated by the cost of the park.  Salt is rubbed into the wound, on occasion, when the park is closed to the public so that corporate functions may be held there.

During and after the building of the park, Mayor Daley was frequently criticised for alleged cronyism in the awarding of contracts.   Other areas of the city continued to deteriorate, while their inhabitants observed the increasing wealth and prosperity of those parts of the city that benefited from TIF funded schemes.
Areas that never suffered from true blight in the first place, but which were a focus of interest for developers, politicians, owners of business premises and others who could make the TIF scheme work for them.

In some ways it’s puzzling that we, supposedly a far more socialist nation than the US, are applying a model of TIF so similar to that model which states in the US have been increasingly trying to move away from by drafting legislation that aims to help TIF function in accordance with its original aims.

There has always been a tendency for conservatives to condemn the poor for their reliance on state sponsored welfare, but in recent years have people started questioning more vigorously the exploitation of taxpayer financed schemes by the some of the biggest players in business (players who have traditionally, but not always accurately, been lauded for their self-sufficiency).

TIF deserves close attention for its potential to increase this problem.  Failure to know, or care about, the original philosophy of TIF leaves us less alert to its potential for misuse that could worsen existing inequalities in our society.

The UK version of TIF springs from recommendations in a 2008 report by PWC and Core Group Cities for an alternative method of funding developments in core group cities (the 8 largest regional cities in England).   The report is here.  

It begins with commentary on the economic successes of the core group cities, and highlights continuing problems relating to unemployment and deprivation in some neighbourhoods.    It states an aim to “rejuvenate communities, provide new employment opportunities and stimulate further economic growth.”

  Promoters of the CGP dismiss the possibility of serious overspending as scaremongering

The report then discusses the increasing political emphasis on a devolved approach to economic  development .   A defining aspect of TIF is that it permits local authorities greater autonomy in the matter of funding developments once they have been granted the TIF loan.

For this to happen, they must submit a detailed business plan to the SFT who make recommendations to central government regarding feasibility.

PWC, having been involved in the UK version of TIF from its conception, is ideally positioned  to assist local authorities with the preparation and submission of their business plans.  Finance and Resources Committee meeting minutes from September 2010 discuss PWC’s remit in preparing a TIF business plan for approval by the SFT.  The minutes refer to several important city projects the Council would wish to progress, whether or not the City Garden project went ahead.
See: https://docs.google.com …committees.aberdeencity …pwc+tif+business+plan

“The terms of PWC’s assignment make it clear that they are required to produce a business case that ensures zero financial risk for the Council.”

The Council states that it will make no financial contribution to the City Garden Project.  The development must be funded wholly by private contributions and by the TIF loan and completed within the budget.

Promoters of the CGP dismiss the possibility of serious overspending as scaremongering.  Chicago’s Millennium Park experience demonstrates, however, how this can and does happen.   As a response to such concerns, Sir Ian Wood has pledged an extra £35 million.   It’s not clear what will happen if the cost exceeds this.

Despite ACC’s insistence that PWC present a business case involving zero risk to the Council, the draft business case completed in January of this year contains no such promise.  It focuses on minimising risk and balancing the risks involved in carrying out the project against the risks involved in doing nothing.

Outlining the need to attract investment and talented professionals to Aberdeen to assure future prosperity, the plan refers particularly to the energy industry.  Due to the oil and gas industry being regarded as the primary targets for investment in Aberdeen, and Aberdeen’s existing status as the main centre in Scotland for this industry, PWC anticipate displacement being low (10%).   A low anticipated displacement figure is essential for arguing the likely success of a business plan.

  PWC appears to anticipate investment by that industry increasing in Aberdeen, alongside the increasing depletion of oil and gas reserves

Work is expected to be completed over a 5 year period beginning this year, with TIF borrowing being carried out in stages (the first draw down taking place in 2014).  The proposed development is expected to create approximately 2 million square feet of commercial space and to speed up the development of a further 1.4 million square feet of commercial space.

The CCRS (City Centre Regeneration Scheme) predicts 6,500 new jobs resulting from the development.  It should be noted, though, that that figure is a “by 2039” prediction.

The business plan states:

“Oil and gas reserves will run out over time, perhaps 30 years, and Aberdeen is looking ahead. It knows it needs to adapt its industrial base and re-examine how it creates wealth and prosperity.   Aberdeen is confident it can do so.”

This project is to be completed in 2017, and its success relies significantly on a very low displacement figure of 10%.  In presenting this figure PWC relies on the oil and gas industry, already present in Aberdeen (and therefore not being taken from other areas) being the main sources of increased investment in Aberdeen.   Confusingly, PWC appears to anticipate investment by that industry increasing in Aberdeen, alongside the increasing depletion of oil and gas reserves in the North Sea.

Perhaps in anticipation of confusion about this assertion, much is made of the possibilities relating to renewable energy – an industry Aberdeen must embrace and develop expertise in, regardless of Donald Trump’s views.  The question is whether developments in other areas area will not only compensate for the steadily diminishing presence of the oil industry, but expand to the point where the business plan can work as anticipated.

Regarding the City Garden proposed as a replacement for UTG, the report comments…

“While there is no direct benefit the fact that the City Gardens Project becomes a reality and underpins the CCRS will benefit Aberdeen’s wider population and business community.”

During a recent BBC Scotland debate, campaigner Mike Shepherd (a geologist with years of experience in, and expert knowledge of, the energy sector) was shouted down and jeered at by pro CGP hecklers.  The latter have tended to define opponents of the City Garden Project as tree-huggers and luddites who will be crushed by the wheels of change.   UTG has also been described, throughout the debate, as a dangerous area…despite police reports indicating far lower crime levels in UTG than in surrounding street level areas.

The debate has often been an acrimonious one, featuring conflicts of various kinds.  Already the TIF pilot scheme in the UK form originally advocated by PWC has brought deep divisions to Aberdeen.  It seems set to be promoting a cheerfully unapologetic attitude, amongst some in our community, with regard to social exclusion.

A popularly cited reason for getting rid of UTG is that this will also rid the city centre of people with drug and alcohol related problems.   Presumably, relegating them to more blighted areas that would, were TIF being applied in a manner consistent with its original aims, be the areas actually benefiting from this scheme.