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How do we engage the developer in the centres debate?

Building1Most developers are conservative and are unlikely to challenge the tried and true retail only formula. Often they will break the mould if in a competitive bid situation (as they did at Gungahlin), however this is rare. Developers will make more development profit from a mall, so if you want a town or village and not a mall, you need to regulate so that they develop a centre (town or village).

 

Developers will not develop a town centre as of choice. This is in part because the lenders who fund these projects are not risk takers. So if town centre planning regulates for a town this will have an effect on land price and will allow the purchaser an adjustment for perceived additional risk, higher cost and lower rentals. This "risk" is in part a consequence of the way that things have always been done by institutional developers and lenders (i.e. true, mixed use street based centres tend to generate higher land values longer term than shopping malls) and in part due to the imposition of additional costs in the form of the grain of built form.

Often developers are residential developers and a town centre can be seen as a value generator for the residential component, which can defray some of the additional cost. Most major development companies are divisionalised into commercial & industrial, residential, and retail i.e. three divisions as separate profit centres. This silo approach may suit them but is contrary to the objective of creating towns where you want all these elements to work together.

Regulation is the key. Built form controls rather than zoning are far more important in mixed use street based centres. You need them as your primary regulatory tool. At the end of the day it doesn't matter what goes in the building as long as the building is retail-capable on the ground floor or as we used to know it "robust and adaptable." This may mean specifying minimum floor to ceiling dimensions.