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III. Market-Oriented Planning Of Type 1 - Planning Based On Compromises With Private Real Estate Investors Made To Attract Private Capital

In this type of market-oriented planning, component 1 and 2 above are not changed. The local government still formulates the visions and has a strong legal position. However, in many countries the economy deteriorated during the 1980s, and this also affected the financial situation of local governments. The third component of the ideal type of strong local governmental planning was no longer fulfilled. The local government now needed private capital to implement their visions.

A typical case of this was the building of the Stockholm Globe Arena. The political leaders in Stockholm believed that their region needed a big new indoor arena that could compete with the Scandinavium arena in Gothenburg for big international events. The local government lacked financial resources, but they owned the land in an old industrial area close to the central parts of the city, an area that was judged to be suitable for a new arena. A deal was made with a group of private investors who got the right to build offices, hotels and a shopping centre around the arena on the condition that they build the arena and then hand it over for free to the local government. Mäntysalo (1999, p. 183) writes that the local governments were "increasingly seeking new forms of cooperative planning with the private sector."

This change also affected the details of the planning process in a number of ways, as a number of specific features of the layout of the area or the building design had to be accepted by the private investors. In this context, Mäntysalo (1999) describes the planning as more project-oriented, and partly turned around in the sense that the lay-out of the area could not be decided until the negotiations about the specific building complexes were finalized. For obvious reasons these negotiations were made behind closed doors, involving only a small group of leading politicians and civil servants. Cars (1992) gives a general description of this type of planning, and analyzes a number of Swedish cases. Just to have a short name for this kind of market-oriented planning, we will in the rest of the article call it “New Nordic Style.”

Table 2 summarises the characteristics of this type of market-oriented planning:

TABLE 2: Market-oriented Planning: Type 1 - New Nordic Style

Component The position of the local government
Visions Strong
Legal rights Strong
Financial resources Weak

As always, there is in reality differences in degree, and the weaker the financial situation of the local government, the more it will have to compromise in terms of the vision that was to guide the development of the city. But as long as the local government had the right to decide land-use, they had a rather strong bargaining position.

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