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					                                                   Europe’s Cinderella
                       By Emily Backus
                                                                    From The Financial Times, April 25 2009

                         Milan has long regarded itself as the world capital of design. Home to fashion
                     brands Prada, Armani and Versace and furniture and home accessories
                     powerhouses, such as Poltrona Frau and Alessi, it certainly makes a strong case
                     for the title. Eighty-two companies hosted catwalk shows during the most recent
                     fashion week, while the annual Salone Internazionale del Mobile, the world’s
largest furniture fair, which kicks off its 2009 event this week, attracts 350,000 visitors each year.

   Yet the city fails against Paris, New York and many smaller conurbations in one critical
category: urban planning. As cities from Lisbon to Lyon have shed the worst legacies of postwar
industrial development, buffing their international reputations through major investment in urban
renewal, public space upgrades and transport projects, Milan has looked on – the Cinderella of
Europe.

   Despite its industriousness, many attractive assets and heavy lifting on behalf of the Italian
economy, it remains saddled with a surfeit of obsolete and ugly architecture, scarce greenery, old
infrastructure barriers, intractably tangled traffic and some of the continent’s most polluted air. It is
so bad that renowned musical conductor and Milan native Claudio Abbado said he would only
return to the Teatro alla Scala opera house if 90,000 trees were planted across the city. Milan’s
residential stock is also in a dire state: whether charmingly traditional or semi-modern eyesores,
most homes are at least 30 years old and, even then, in short supply.

   But change is afoot. While the credit squeeze and stagnant property markets push construction
cranes out of most urban locations, in Milan the stars might instead be aligning for an extensive,
long-overdue redevelopment. This should include a €13bn makeover of the city’s transport
infrastructure in preparation for the Universal Exposition in 2015 – an international showcase for
national excellence – and, perhaps, a change to its development rights system aimed at creating
dense, vertical, highly serviced, well-connected centres embedded in a system of pedestrian walks
and belted by parks. Obsolete rules that outlaw even the conversion of ex-industrial buildings into
Soho-style lofts should give way – if all goes well – to new frontiers in urban living.

   When I spoke to Carlo Masseroli, Milan’s head of development, about all this last year, just after
the Expo victory, he was upbeat. “Milan is experiencing a magical moment,” he said. “It is
reconceiving itself, rethinking the development of the city, which is something that hasn’t happened
since 1954.”

   His voice was emphatic and had the hoarse edges of someone giving a lot of speeches. In fact, he
was in the midst of a marathon campaign to persuade special interest groups that his Territorial
Governance Plan (PGT) could transform Milan from a bottleneck city revolving around a tiny
downtown into an integrated network of at least two dozen “epicentres” of activity, each endowed
with an ample share of shops, public services, such as libraries and schools, transport and parks.

   He claimed his plan would nearly treble the amount of green space in the city from today’s 12 sq
metres per resident to more than 30 sq metres, even as the population potentially rises from 1.3m to
2m as a result of the improvements. Now in advanced stages, the plan calls for the transformation
and expansion of abandoned railway yards and other obsolete sites – adding up to more than double
the area of the historic downtown and one and a half times the land covered by all new development
built since 1980 – into pleasant residential and commercial neighbourhoods.
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   Back then I wondered whether developers would actually gamble billions of euros on the many
large-scale projects his ambitions would require. Milan has been a daunting market, especially for
outside investors, due to opaque administrative processes, the importance of personal political ties
and lack of public infrastructure investment, all of which poison risk assessments and balance
sheets. “Projects grow old before they’re born,” laments Claudio DeAlbertis, the head of
construction lobbying group Assimpredil Ance, noting that simply obtaining a building permit for
large projects takes an average of 59 months.

   The trouble is the city’s development rules date from the 1950s and are unsuited to contemporary
market demand . Masseroli’s radical solution – which he, as part of the city’s ruling coalition, hopes
to see approved by the end of this year – would turn development rights into tradable assets and
include a public exchange, similar to a stock or commodities exchange.

   The city would be divided into areas for conservation and for construction but all property would
have a theoretical amount of allowed building attached to it, with the type and use not prescribed
but determined by market forces. This “right” to build on a conserved site would, of course, be
unusable but owners, including the government, could sell it to the owners of unconserved land.
Thus, developers could amass the rights to create far larger structures than the rules would
otherwise allow, up to a ceiling yet to be decided. Any parcels from which the building rights had
been sold off would then become public property, allowing the city to accrue space it wants without
paying for or confiscating it. At the same time, the money the government would make from selling
rights from parks and other public reserves would help finance urban overhaul.
   “I think it is very positive,” says Carlo Romanò, head of the real estate offices of Doughty
Hanson in Milan. “In some cases, there were no clear regulations before. It has been difficult not
being able to give international players a clear and objective notion of what they were getting.”

   Still, some observers worry about the plan’s feasibility. “The ideas are very interesting but also
very complicated on a technical and operative level,” says Matteo Bolocan, an urbanist at the
Politecnico di Milano. Many sceptics also fear a pouring in of traffic and cement. But Masseroli
argues that new residents and construction will fuel urban renewal, encouraging the conservation of
open space and sustaining the costs of new services and infrastructure. He also claims Milan has
room to rise: Paris is three times as densely populated, Barcelona twice so and London 1.5 times.
“We must compare ourselves with other great European cities.”

   Milan will also have to work hard to attract the massive private investment required. The good
news is that its victory to host Expo 2015 at least imposes a deadline for the badly needed
infrastructure overhaul. The city government and the Italian state have pledged to spend €13.2bn,
including previously planned projects worth €10bn, some of which have hung in limbo for as long
as two decades. Beyond the construction of the Expo site itself, Milan will nearly double the reach
of its underground system and invest in three expressway connections, general road improvements
and railway connection upgrades. (Of course, as I write, the Expo preparations have been put back
by more than a year and securing the last few billion euros of public funding is proving difficult.)

   “The big issue in Milan is the same as it has been for 40 years: transport, transport, transport,”
says Massimo Tarabusi, former head of residential services for real estate consultancy Cushman and
Wakefield in Milan. He thinks improvements could help propel the city from a “price taker”
market, where central location is the largest factor in determining property cost, to a “price maker”
market, where a developer can substantially influence values through innovative concepts,
construction and design quality, services and project branding. And he points to a number of
projects already pulling in that direction, driving gentrification in formerly depressed outlying
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neighbourhoods, such as the now hip Navigli neighbourhood, the office-centric Maciachini area and
Bovisa, which has become a hub for science, technology and affordable housing.

   Construction vehicles are also re-sculpting a great swathe of former no-man’s land just a stone’s
throw from the historic centre. By 2015 the Porta Nuova mixed-use project, spearheaded by Texas-
based developer Hines, should be a bicycle- and pedestrian-friendly, energy-efficient
neighbourhood that planners hope will be among the most lively and liveable in Europe. It will be
well-connected, with three subway and several bus and tram lines, two train stations, several
thousand underground parking spots and 400 residences, ranging from townhouses to apartments,
including Milan’s first Leadership in Energy and Environmental Design (LEED) certified homes.

                                                              Another landmark, semi-central mixed-
                                                           use project is CityLife. Owned by an
                                                           investors’ consortium of mostly insurance
                                                           companies, it will include 1,500 apartments
                                                           to be built over the next five years, designed
                                                           by big-name architects Daniel Libeskind
A new, multi-centred plan is being drawn up for Milan,     and Zaha Hadid. These will offer high
including buildings by architects such as Daniel Libeskind energy efficiency, views over a new park,
                                                           pedestrian     walks,    pneumatic      refuse
collection, spacious layouts of 170 sq metres or more and three parking spaces each. (Milanese own
more cars than most of their European counterparts and unlawful street parking is rampant.) Homes
will be high security, highly demotic and enriched with fitness and cultural offerings, including a
nearby contemporary art museum and a children’s creative learning centre.

   Tarabusi says he eventually expects owners of smaller-scale buildings in Milan’s historically
dominant downtown to follow the lead of these developments, revamping aging, inefficient
properties in order to compete with those in newly desirable, non-central neighbourhoods. Of
course, this all depends on the success of the projects, continued market demand and less
asphyxiated credit conditions for property companies. Debts have already crushed developer Luigi
Zunino’s plans for two giant mixed-use projects designed by architects Norman Foster and Renzo
Piano.

   The massive public investment required to put on an Expo is no guarantee of new riches nor
urban renewal either, as former hosts will testify. Spain’s Seville was left with a housing glut, while
Germany’s Hanover lost hundreds of millions of euros. But if Milan officials start executing their
plans swiftly and wisely, they might give the city an edge in attracting international investment
during otherwise hard times and at least properly position themselves for the next upward cycle.

   In the short term, the roar of machinery, torn streets and other inconveniences are not only
making some Milanese neighbourhoods uncomfortable but also weighing down already slack house
prices, says Fabiana Megliola, head of research for national real estate agency Tecnocasa. Still, she
adds, when the cuts from the reconstructive surgery heal, the improvements should both improve
quality of life and boost property values. Any homes sited near a new metro stop could, for
example, see price rises of 5-7 per cent, while those with views of a new or revamped park might
climb 10-15 per cent.
   “Milan should change completely,” she says. “It will have an entirely new face.”




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                                    Europe’s Cinderella
Task: Check on your understanding of the main facts in the articles by answering the
following questions

  1) Why has Milan long considered itself as the world capital of design?
  2) In which sector does Milan fail against big cities like Paris and New York?
  3) Has Milan succeeded in renewing urban planning after the post-war industrial development?
  4) What did Claudio Abbado say during an interview some time ago?
  5) What is Milan planning to do in preparation for Expo 2015?
  6) Why does Carlo Masseroli, Milan’s head of development, look so optimistic?
  7) What does his Territorial Governance Plan aim to?
  8) Why are other people pessimistic and sceptical to Mr Masseroli’s solutions?
  9) Why is Milan said to be a “daunting market”?
  10) What does Mr Masseroli argue?
  11) What’s the good news for Milan, resulting from is victory to host Expo 2015?
  12) Milan should be transformed from a price taker market into a price maker market: could you
      explain the meaning of these expressions?
  13) What is the big issues to discuss in Milan?
  14) What is the Porta Nuova area expected to become by 2015?
  15) Will it be well-connected? Talk about subway, bus and tram lines, train stations etc.
  16) Talk about the project CityLife.
  17) What are owners of smaller-scale buildings expected to do according to Mr Tarabusi?
  18) What will any kind of projects depend on?
  19) Is the massive public investment necessary to put on an Expo a guarantee of new resources
      and urban renewal?
  20) What’s the opinion of Fabiana Megliola, head of research for national real estate agency
      Tecnocasa.




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