A presentation given by Steven Tolson at the 2011 Design Skills Symposium which was held in Stirling and hosted by Architecture + Design Scotland and Historic Scotland.

1. Steven Tolson
Director Ogilvie Group, RICS
Design Skills Symposium 2011, Tollbooth, Stirling
“Delivering Better Places”

2. Delivering Better Places
Investment Inputs
Citizens, Developers and the State
Steven Tolson

3. Delivering Better Places in Scotland
• Delivering Better Places Summary
• The Place Promoter (Vauban Case Study)
• Consumer / Citizen Demand, Value,
Development Viability and Investment
• A Delivery Model through Multi Developer
Participation

4. http://www.scotland.gov.uk/Resource/Doc/336587/0110158.pdf

5. Place Quality is Important
“Too much development in Scotland is a missed opportunity
and of mediocre or indifferent quality. “
Scottish Government’s Council of Economic Advisers, First Annual Report, 2008

6. Good Leadership
A Champion who Promotes and stays with the Project
• A leader drives the project,
breeds confidence, reduces risk &
widens participation
• A Place needs a passionate
promoter
• The Leader must galvanise
support and delivery
• The Leader must foster a place
making culture
• A Leader can not be a shrinking
violet

7. Co-ordinated Delivery
Joined up working with NO SILOS
An orchestrated approach where interests are stitched together

8. Control the spatial development framework
A Master Plan is not just a
drawing with aspirational statements.
A Master Plan should be a proposition
that:
• market tests
• understands infrastructure
requirements
• development appraisals testing
viability (business case)
• delivery methodology.

9. Exercise ownership power
Participation rather than offloading due to fear of risk

10. Attract funding for advance
infrastructure provision
Long Term Investment through 30 + year loans

11. Secure design quality through
procurement strategies
• The State should lead and participate as well as promote.
• Making a Place is an Investment (create & manage asset)
• Delivery through multi developer participation not single
entity
A multi developer approach speeds delivery, spreads
risk, creates a competitive environment and produces
variety that helps form a socially balanced community

12. I
J
B
U
R
G

13. Investment & Stewardship over time
• Asset
Management not
Development
• Cultivate place to
gain positive
reputation
• Good stewardship
helps enhance
value
Mains Estate, Milngavie

14. Pride in Place, Mains Estate, Milngavie
Developed by Lovell in 1990. Need sufficient funds to ensure good
maintenance but good landscape should achieve good value.

15. Vauban
A New “Green” Community
for Freiburg

16. Vauban - A new place in an Intelligent City
helped by a Place Promoter
• Chief Planner, Professor Wulf Daseking a
person with leadership qualities and vitality
bringing influence in Freiburg.
• Daseking and team not only plan they deliver.
• Also strong political leadership allows focus on
long term investment commitment
Leaders are prepared to take RISKS

17. Simple Proposition for Freiburg
• Freiburg seeks to keep its people in its City.
• Freiburg leaks young people out of the City in search
of affordable accommodation.
• Young people commute many kilometres between
home and work. Bad for the city (congestion), bad
for the planet (emissions), bad for social cohesion
and bad for city prosperity.
Can we do the same in Scotland?

18. Going home for Lunch in Vauban
In Freiburg 24% walk 28% bike, 20% drive and 18% by bus or tram

19. Individual Houses in Vauban
Variety of shapes and sizes. Not outstanding architecture but it doesn’t matter

20. Vauban Resident’s Car Parking
No parking by house with resident Car Parking on the edge of
Vauban – Allowed 20 mins to unload by front door

21. Sustainable Housing producing more energy than used

22. Market in the
Square Vauban
Place managed by
Vauban Forum Community
with Freiburg Municipality.
A Mixed Use Place with
Housing, Education, Retail,
& Offices.

23. Consumer, Developer and the State
Plot
Purchase
Developer / Tax
State
Place
Infrastructure
Property
Purchase
Citizen /
Customer Tax

24. The Place Network
Priorities, Risk and Value
The Key Players
• Citizen / Consumer – Long Term Investor
• Developer & Funders – Short Term Investor
• State – Long Term Investor

25. 3 Key Values of the Citizen / Consumer
Dominant Group
Comfort, Convenience and Familiarity
Subordinate Group
Opposite values to Dominant Group

26. House Builder’s Motivations
Tried and tested product that:
1. Is familiar and known to sell
2. Is built with relative ease
3. Gets quick statutory consents
4. Has cost price certainty once above DPC level.
5. Is programmed and managed efficiently
6. Minimises RISK
House Builders satisfy the Dominant Group’s
Values of Comfort, Convenience and Familiarity

27. Specialist [Creative] Developer
Bespoke product that is:
1. Different (less familiar) and value less obvious
2. More complex to design and build
3. More difficult to get statutory consents
4. Less cost certainty
5. More challenging to manage work in progress
6. Carries more RISK and UNCERTAINTY
A Specialist Developer’s core customers are likely to
be from the Subordinate Group.

28. Some Issues for Good Quality Urban Development
• Need clients who appreciate good design and are
“informed”. It’s not just about the designer.
• Urban site characteristics need a design solution that
fits (none standard). Therefore, non volume
developer has greater opportunity to be competitive
• However, specialist developer find it more difficult to
access funds so development scale limited to equity
input
• Public project procurement barriers due to process
and evaluation favours financial strength of
corporate entity (risk aversion).

29. The Burrell Company
Edinburgh Projects that
fit the Place

30. Valuation and Funding
• Mortgage for purchase of completed dwelling
• Development Project Funding
Level of Funding based on Loan to Value (LTV)
Mortgage 70%-90% (if you are lucky)
Development Funding 60%-70%
Loan on value not on price. Therefore the
Valuer has an important role to play

31. Valuation Approach
• Two valuation elements
- Occupier Functionality
- Investment Value
• Value of Good Design
- “Few people treat housing as a work of art” It is a
luxury that most can’t afford”.
- Premium for Design is possible but only if purchaser
is convinced they will get their money back
- Premiums more likely where there is “intelligent”
design such as green sustainable housing where
there are energy savings benefits
Valuers don’t value it if the People don’t value it!

32. The Valuation of a Place
• What is the ownership interest(s)?
• Single interests – shopping mall etc. Value
based on an investment method –
capitalisation of a net rental income.
• Multi interests –Value based on summation of
investments (landlord and tenant) and owner
occupation value.
• Values of individual assets strongly influenced
by Place reputation

33. Better Places in Multi Ownership?
• Single Ownership with good estate management
practices – London estates
• Long term Places in Multi Ownership. Quality
depends on multi owners coming together to
establish and care for the Place. But State has
reduced its role and self help approach is variable.
(note self help is not “convenient”).
• Possible collective benefit from Place Leasehold
arrangement

34. Good Reputation = Good Value
• Good Places are not about style but substance
• Good Places take 20+ years to be recognised.
Requires a combination of good physical
design, people’s activity and interaction and
collective caring for the Place.
• Valuers don’t think that good architecture
represents higher values but they do
recognise that a place’s reputation will be
reflected in market demand and value.
Place making design does have long term value

35. Lessons from Continental Europe
• More sociability with less concern over privacy.
• Continentals love their cars but also use public transport.
• State is active in making places, adopts a long term
investment approach and takes risks.
• Planners have greater respect and are at the top table
• State limits the scale of developers participation. There
is wider participation from individuals and small
companies.
• Greater variety achieved giving consumer choice.

37. Familiarity
A modern
application of a
recognised
housing form.

40. 32no Town Houses
12no Detached Houses
Block 102m x 92m
48 dwellings per hectare
Urban Housing Block of Town Houses and Detached
Based on Ijburg Typology

41. Hypothetical Development Appraisal for
Infrastructure and Housing Development
Housing Development Serviced Land Valuation
32no Town Houses @ £200,000 (Parc URC @ £180k) £6,400,000
12no Detached Houses @ £256,000 £3,072,000
Gross Development Value £9,472,000
Development Costs £7,232,406
Site Value after fees & finance £1,962,255
(£44,597 per plot)
Infrastructure Development Valuation (non serviced land)
Gross Development Value £1,962,255
Infrastructure Costs £883,048
Site Value after fees & finance £999,671
(£22,720 per plot)

42. Cost of Quality
• Evidence from Exemplars suggest design
quality cost around 20% more than
conventional development costs.
• There is no evidence that developers can
recover this additional cost therefore the
impact is on land value.
• The perimeter block value based on 20%
design cost premium reduces the land value
from £1,962,000 to £21,000. (NIL VALUE)

43. Delivery through a Multi Developer Approach
• Europe - State is the Place Developer
• Scotland - public sector has assets but is risk averse
• Serviced sites sold to multi developers (volume, small
builders, housing co-ops, associations and individuals for
serviced plots)
• Greater range of dwellings creates healthy competition, quick
delivery and a balanced community.
• Public sector has access to relatively long term finance
whereas private sector has little equity and debt is difficult.
• Public sector needs to use its covenant strength and think
about guarantees. Public sector needs to take more risks.

44. Agreements Private Sector
Public Sector Shareholders
Asset Management Partner
Partner Development Management
Loan Developer
Construction
JV Place Equity Cash Match
Land Asset for Assets
Developer
External
Private Debt
Funders
Multi Developer Delivery Approach Public Loans
Development Agreements PWLB
Jessica
TIFS etc
Developer Developer Developer Developer
“A” “B” “C” “D”

45. Summary
• We need creative informed Leaders who can inspire a
change of culture. These leaders should be at the Top
Table of Decision Making
• Get clear and consistent joined up design policies.
• We need a switch to long term investment having faith
that good place making will bring value in the end.
• Place makers need to have skills in economics and
delivery
• We should refrain from talking about style and
concentrate on the real ingredients of place; PEOPLE!
• We should not be frightened to take a risk

46. FURTHER
READING
PLACE
MAKING
DELIVERY
Urban Design in
the Real Estate
Development
Process
Steve Tiesdell
& David Adams
Wiley –
Blackwell

47. September 2011