What drives urban renewal?

August 14, 2008

Since the summer, London has grappled with the costs of the 2012 games, in a less benign economic environment. Several venues have been threatened with cancellation, a major sponsor (Johnson and Johnson) has pulled out and Olympics minister Tessa Jowell has had to deny that her government regretted bidding for the games.

As the Beijing Olympics head towards their conclusion, attention will begin to turn towards London’s hosting of the 2012 games, as well as the long-term ‘legacy’ effects of such events.  While still over four years away, London’s plans for the next Olympics are already highly controversial:

• After 100 days in office, recently elected London Mayor Boris Johnson has expressed a fear that the 2012 games could have few long-term benefits for London.

• Johnson also voiced concerns that a lack of coordination between agencies involved in organising the Olympics could undermine legacy effects, announcing the creation of a “special purpose vehicle” to address this.

Johnson’s views, along with continuing controversy about the 2012 games’ budget, offer insights into the costs of major urban sporting and cultural events, and their role in driving urban renewal:

• Olympics:  Hosting the Olympics can drive substantial urban regeneration -- as they did for Barcelona, which hosted the 1992 games.  Preparations for the games saw substantial investment, particularly in infrastructure, which acted as a driver for subsequent regeneration.  However, the legacy effects of hosting the Olympics are not often as positive.  Olympic venues tend to be too large for use for most ordinary sporting uses, as well as costly to maintain.  This means they are often either dismantled after games, or become ‘white elephants’.  The Montreal Olympic Stadium, built for the 1976 games, took another thirty years to pay for, and has suffered significant structural problems in recent years.

• Cultural alternatives:  As an alternative to sporting events, cultural laurels can lead to significant long-term urban renewal, on a smaller price-tag.  Notable examples of this include the Scottish city of Glasgow, which held European Capital of Culture status in 1990. This encouraged the renovation of buildings in the city centre and inner-city areas, fuelling increased economic activity that drove long-term regeneration.

• New architecture:  Another path to urban regeneration is via the construction of signature buildings, both encouraging and exemplifying a city’s renovation. For example Bilbao’s Guggenheim Museum, designed by architect, Frank Gehry and opened in 1997, led to substantial urban renewal in the surrounding area. Along with the opening of metro and tram systems in subsequent years, the museum saw the city move away from its industrial base towards becoming a major centre for tourism and services.  However, attempts to replicate the ‘Guggenheim effect’ elsewhere have backfired: London’s Millennium Dome failed to drive renewal in surrounding docklands areas in east London.  Running far over budget, the dome lay empty for six years.

The organisers of the 2012 Olympics clearly hope that it will regenerate areas of east London where major venues are to be located, but the success of the Olympics in regenerating London is, a story about transport modernization.  The lessons of past attempts at such urban renewal suggest that if it is to be successful it will need to drive investment in infrastructure and services that go beyond the games and venues themselves, and be carried out on time and without significantly exceeding budgets.  Political and logistical difficulties -- not to mention the difficult fiscal environment of the next few years -- suggest that despite Johnson’s recent changes, this will be an extremely difficult task.