Financing meanwhile use and urban regeneration: The value of meanwhile spaces and temporary use.

Here are some key messages we picked up from our conversation around financing meanwhile spaces. Chaired by Marco Tognetti from LAMA, our session’s guests were:

• Filippo Addarii, CEO of PlusValue

• Giovanni Manfredi, Investor and CEO of Manifattura Tabacchi S.P.A.

• Jonas Bystrom, European Investment Bank

• Laura Pellegrinelli, Lendlease

You can watch the complete session on our YouTube Channel.

Session’s highlights

Marco Tognetti (Lama):
‘Meanwhile spaces can play three key roles. First, they can be a lever of marketing activities; second, they can help manage the relationship with citizens and contribute to building consensus; thirdly, they can be a testbed for piloting final uses. This implies different levels of investment and therefore entails different understandings and attitudes from investors. The key question at stake is whether meanwhile spaces are “nice to have”, or instead if they can become a fundamental ingredient of regeneration processes.’

Filippo Addarii (PlusValue):
‘When working with large regeneration projects we deal with predators with a large appetite. There is no distinction between public and private sectors in this case, except for preference in taste: politicians go for political consensus, while business always opts for profits. To this structural challenge we have to add two more conjunctural ones. The first one is Covid that has stopped most construction sites, delayed plans and increased costs. Second, people’s distrust in large regeneration projects seen as an opportunity to pocket more profits by a few. Who blames them? This a consequence of rising populism and people feeling betrayed by institutions and big business. There is no magic formula to come out of the corner where we are.’

‘The very simple principle is that we need to align public and private interests. Investors understand, and are very happy to generate public value when this is aligned with their own plans and interests.’

‘How do you define meanwhile spaces’ value? How do you measure it when measuring means also reporting to shareholders that want to understand how money and resources have been spent in these meanwhile projects? Who should pay? How and to what extent the new Green Deal can contribute to unlock value in meanwhile spaces?’

Giovanni Manfredi (Manifattura Tabacchi SpA) :
‘Meanwhile uses can have three different types of value which should be measured differently: financial value, sustainability value understood as a higher quality-less quantity profit, and social value. Regarding financial value, real estate has a key driver – location. Meanwhile spaces are fundamentally one of the few levers to change location. Profit can be more or less sustainable. We, as investors, are able to accept a lower profit if this is actually a higher quality one.’

‘If meanwhile uses are done well, they help communicate, engage, prototype spaces—they can really change how we invest. Under this perspective, if we ask ourselves “Who should pay?”, it is quite immediate to answer “the customers”. We need to sell for a higher margin in order to justify it purely from a private, capitalistic point of view. The good news is that investors are changing their perspectives.’

‘The social value is difficult to finance for the private investor. But this is where there could be a positive collaboration with the public, as far as roles are clear. People can understand the roles and interests if you make it clear from the very beginning. And that is the basis on which we can try to make good quality profit. But also, we can try to generate the maximum amount of positive externalities possible.’

Jonas Bystrom (European Investment Bank):
‘The EIB has climate action and environmental sustainability on top of its agenda. These and the public goals of resource efficiency, infrastructure, innovation, entrepreneurship and SMEs influence its work and priorities when investing in urban renewal and urban regeneration. As a large financing institution, mainly working with large investments, there are limits in how the EIB can support small-scale investments related to meanwhile use. Meanwhile uses can boost economic opportunities and mobilise parts of the society that are not used to entrepreneurial activities. Meanwhile uses also have potential for social development impact, mobilising a larger share of the population and building local social resilience to whatever the future may bring.’

Laura Pellegrinelli (Lendlease):
‘Meanwhile interventions are an opportunity to connect and include the local community. From a developer perspective, they can help scale up the project, giving also the opportunity to better understand the potential of an area, as well as to start feeding a sense of belonging. Moreover, they are an opportunity to anticipate how a place feel and look, starting to build the place experience, which also connects to the quality of spaces. If we increase the quality, then we increase its capacity of attraction; meanwhile interventions help build final destinations.’

‘Another value is in the support to the local businesses, giving them lower risk opportunities to try out new ideas.’

‘As a developer, it is important to set up indicators from the very beginning, and to be able to measure them monthly, sometimes weekly. This allows us to better understand the benefits, and what we could do differently.’

‘Players in meanwhile uses are many. The key is the synergy between all these actors because each of them has to play an important contribution to meanwhile use activation.’

‘If we raise capital, then we need to demonstrate that there is a generated value. It is in a way a puzzle between social inclusion, economic investment and the community.’