City Analysis

Nordic City Solutions

Nordic Trade Promotion Initiative under Nordic Sustainable Cities

Results from Phase 1 - North American Fact-Finding Mission

April 24, 2018 Executive Summary

The following report concludes Phase 1 of the Nordic City Solutions fact-finding mission to evaluate trade opportunities in seven major markets across North America in the context of a collaborate initiative by the five Nordic Trade Promotion Organizations. The conclusion of this report will guide the beginning of a two-year trade push called Nordic City Solutions, which aims to collaborate with North American cities and local stakeholders to promote Nordic-specific competencies around sustainable urban development with the aim that Nordic companies will be well positioned to secure tender contracts locally in these cities.

The six markets which were evaluated in Phase 1 were Ottawa, Ontario; Greater Toronto Area, Ontario; San Francisco Bay Area, California; Houston, Texas; Twin Cities and Rochester, Minnesota; and New York City and Tri-State Area. The evaluations consisted of various stakeholder meetings within each city to determine:

 What is the local knowledge of the Nordics and Nordic Sustainable Cities as a general theme?  What present challenges and future opportunities is their city facing?  Are they willing to work with the Nordics on sustainable city solutions?

Quantitative data, as well as additional factors which are described in detail in the report content, helped provide a clear and retrospective recommendation for next steps to prioritize the markets of:

 Houston, Texas  Greater Toronto Area (City of Brampton), Ontario  Twin Cities and Rochester, Minnesota  Ottawa, Ontario

Developed by: Authored by: Danish Trade Council, North America Pamela Tiller, Senior Advisor Business Sweden, North America Danish Trade Council, Toronto Innovation Norway, North America e: [email protected] Business Finland, North America t: +1 416 640 7485 Promote Iceland, North America

2 Table of Contents

Executive Summary ...... 2

Background ...... 4

Overview ...... 4

Methodology ...... 5 Model ...... 5 City ...... 6 Themes ...... 6 Projects ...... 6 Data ...... 7 City Analysis ...... 8 Greater Toronto Area, Ontario ...... 8 Ottawa, Ontario...... 12 San Francisco Bay Area, California ...... 16 Greater Houston Area, Texas ...... 18 Twin Cities & Rochester, Minnesota ...... 21 New York City & Tri-State Area ...... 25 Recommended City Markets & Next Steps ...... 27

3 Background

Nordic Sustainable Cities is one of six flagship projects under the Nordic prime ministers' initiative Nordic So- lutions to Global Challenges, which is coordinated by the Nordic Council of Ministers.

This flagship project builds on the success of Nordic Built Cities, which explored the development of innovative solutions for sustainable, smart and livable cities. In 2017, the Nordic prime minister’s initiative, in coordination with grant funder Nordic Innovation, launched the Nordic Sustainable Cities trade promotion initiative with three target markets of focus across the globe: India, China and North America.

In December 2017, the North American Trade Promotion organizations of the 5 Nordic countries were success- fully awarded a grant of 4 million NOK to implement a Nordic City Solutions trade promotion platform in North America over two years. The platform development has been divided into two phases:

Phase 1 – North American Fact Finding Mission and Trade Promotion Program Development Phase 2 – Trade Promotion Launch, Company Sign-Up, Market Based Activities and Project Tender Execution

The following report summarizes Phase 1’s Fact Finding Mission in order to provide guidance to the North American Steering Committee for Trade Promotion Program Development and to launch Phase 2.

Overview

The following document is a summary of qualitative and quantitative data collected by the project team during Phase 1 Fact Finding Mission of the trade promotion initiative in target markets across North America from January to April 2018 in: Ottawa, Ontario; Greater Toronto Area, Ontario; San Francisco Bay Area, California; Houston, Texas; Twin Cities and Rochester, Minnesota; and New York City and Tri-State Area.

North American project opportunities are frequently based on tacit local knowledge through networks. Often when opportunities are tendered, companies have only a few weeks to prepare a response submission based on the project scope, budget parameters and intricate project details. Knowing when these project tenders are posted is key to a successful tender bid. For most international companies, this 3-4 week timeline is too short to learn about the market, turnaround a precise representation of their specialization in the context of the projects local need; or in some cases to open the bid selection committee’s eyes to a more ‘Nordic Way’ of problem solving that may differ from the North American “business as usual” perspective, resulting in an un- successful bid and lost resources for the bidder.

4 The intent of Nordic City Solutions platform is to get ahead of the curve with respect to specific opportunities in these target markets by building local relationships, collecting nuanced project knowledge, and setting up Nordic companies for a successful opportunity to bid on local tender projects. In order to do this, Nordic City Solutions has undertaken an intensive fact-finding and relationship building mission to previously identified major US and Canadian city markets to understand:

The intent of this report is to provide a recommendation which will guide the Nordic City Solutions North American Steering Committee, in coordination with Nordic Innovation, to make a decision about moving ahead with a focus on activities in 2-3 markets within North America based on the results of the fact finding mission.

Methodology

Model The fact find mission to North American markets was based on the premise that true market knowledge and understanding of opportunities can only be achieved through first hand knowledge and relationships with local stakeholders. The following model has been applied to evaluate each city region as whole, and guide the discussion for individual meetings between Nordic City Solutions and local stakeholders.

City Synergies >Theme (Resiliency/Healthy/Smart)

Decision Making Overarching Themes >Projects Master Planning Current Challenges Ongoing & Future Project Service & Procurement Projects Partners Opportunities Future Opportunities Budget

Figure 1 - Nordic City Solutions North America Model

5 City The City sits at the top of the model, with four critical aspects evaluated:

 Synergies - Understanding similar challenges between North American and Nordic cities to help solve problems together. The discussion around building collaborative relationships on a civic-governance level to share knowledge, experiences and ideas between Nordic and North American partners.  Decision Making - Using public diplomacy as a tool for collaborating on Nordic-inspired solutions with decision makers. Who are the decision makers in the city? Who are the major stakeholders for the City? What are their individual and respective visions for the city?  Budget - Understanding budgeting priorities and sharing the Nordic business model for city budget decisions.  Master Planning - Collaborating with cities and city regions on a bureaucratic level to discuss their Master Planning processes with a focus on Nordic. Understanding regional government structure, collaboration capacity and long term vision are key for framing Nordic City Solutions in alignment with the overall city as a whole.

Themes The identification of key themes or sub-themes within the context of Nordic Resilient Cities, Healthy Cities and Smart Cities was the focus of most meetings.

 Overarching Themes - Understand of specific themes in urban resilience, urban health and smart city technology plans.  Current Challenges - Detailed discussions with local stakeholders about current urban challenges the city is facing.  Future Opportunities - Getting ahead of the curve on future opportunities with the city areas for Nordic collaboration on upcoming projects.

Projects The final phase of discussion for cities was the discussion around projects, and whether stakeholders were willing to work with Nordic Solutions providers. In some cases, procurement laws in the province/state resulted in less detail than other cities. However, these types of factors – while respected from a Nordic context – also provide a reference point for openness to Nordic bidders in the climate of each local region. In some cas-

6 es, the relationship with these cities was too new to derive direct project information. However, as we nurture these relationships moving forward, the goal is to build out this knowledge in our target markets.

 Ongoing & Future Projects - Identification of clear opportunities for Nordic companies on future projects within the city in both the public and private sector.  Project Partners - Defined relationships with local partners, including business-to-business matchmak- ing with local procurement partners, business leaders and public sector officials.  Service & Procurement Opportunities - Clearly defined procurement opportunities for Nordic companies through detailed on-the-ground understanding of local needs.

Data To balance out qualitative data from meetings, quantitative data from States/Provinces, Regions and cities was collected in order to support decision making around Nordic City Solutions trade promotion activities. Data sources are summarized within the text with relevant references for support.

7 City Analysis

Greater Toronto Area, Ontario The Greater Toronto Area (GTA) is Can- ada’s largest urban area with a 2016 census registered population of approximately 6.4 million people. The region is comprised of the City of Toronto and four Regional Municipalities with second-tier smaller cities under each (please see Figure 2 for map showing Regional Municipalities and second-tier Municipalities in GTA).

While the City of Toronto proper presents considerable opportunity for Nor- dic City Solutions partnerships, it is very Figure 2 - Greater Toronto Area Map bureaucratic, slow moving and overall crowded market place. The Steering Committee, of which some are based out of offices in the GTA, see opportunities in the second-tier cities around the GTA as more agile partners with a progressive mandate to “catch-up” with the City of Toronto and a more collaborative and open timeline. Nordic City Solutions met with the City of Brampton (Peel Region) on January 18, 2018 and the City of Oshawa on April 9, 2018 to discuss Nordic City Solutions opportunities within each market. Moving forward, we also plan to reach out to the Cit- ies of Markham, Vaughan, Mississauga, Burlington, City of Toronto for collaboration opportunities. Addition- ally, the City of Hamilton, which lies just south-west of the GTA presents significant collaboration opportunities with an existing Nordic-funded project with a focus on sustainable affordable housing. However, due to time constraints on the Phase 1 process, markets further afield were prioritized.

There are considerable synergies with the cities in and around the Greater Toronto Area. Each one of these cities is undergoing a period of urban change in various stages, degrees and response levels. The city of Bur- lington in Halton Region (see Figure 2 above) is currently twined with the City of Växjö in Sweden as part of an

8 EU funded grant with a focus on collaboration opportunities relating to sustainable use of land, nature-based solutions and the implementation of the SDGs. The City of Toronto is a member of 100 Resilient Cities, and is currently working with implementing a resilience strategy across the City to insulate from shocks and stresses. The City of Brampton are currently engaged in an aggressive strategy to increase overall livability and provide more employment opportunities for residents within the city as a move away from its current fit as a commuter-city for those working in Toronto, Mississauga and York Region.

Decision making in the Greater Toronto Area is handled on different levels of government. Cities in Canada are defined as creatures of the province, and thus the Province of Ontario sets out a major planning strategy overall. Each upper-tier municipal government, such as the Region of York, has an elected Regional Council with a Regional Chair who acts as Chief Executive Officer. The second-tier Municipalities, such as Brampton and Oshawa for example, have their own Council structures and Mayor. All of Ontario is governed under a weak-mayor system, where the Mayor sets the executive agenda but only has one vote on Council. The City of Toronto is unique in that it does not have a Regional government tier system above it, as well as its own Act giving it greater autonomy from the Province of Ontario. Municipal elections in Ontario will be held on Octo- ber 22nd with varying incumbency results expected across the GTA. However, no dramatic swings in policy are expected as a result of the municipal election. Ontario will host a provincial election in June 2018, where a new government is expected to be voted in which will dramatically change the municipal financing landscape. However, actual results and policy changes are too early to predict.

It is important to note the private sector influence on decision-making within the GTA. Many large format private developers have considerable influence on the economics of development decisions in southern Ontar- io. However, developers are starting to see a competitive advantage in the Nordic City Solutions way of doing business as part of their value proposition in the high-demand market that the GTA hosts. For example, many developers have begun to look to Danish, Swedish or Norwegian architects to design their residential high rise properties or are collaborating overseas with suppliers on sustainable building materials. For example, Great Gulf, a major private developer in the GTA recently partnered with VELUX on their Active House project which included a market visit to the island of Bornholm, Denmark to review installed product for use in Canada.

Overall, municipal budgeting in the GTA varies across municipalities. With respect to the three prioritized markets in the GTA, the City of Toronto saw a 5% budget increase from 2017 to 2018 while both Brampton and Oshawa saw considerable budget reductions at -15% and -36% respectively. However, the cities continue

9 to pursue one-off capital grant funding from Provincial and Federal Government budgets to finance large- scale projects. As an example, the City of Brampton has recently been awarded a new campus for a large Uni- versity with funding from the Province of Ontario.

Master Planning activities are done on a Provincial level for transit (via transit agency Metrolinx) with regional and municipal agencies present as well. Otherwise, all other Master Planning activities are done through the Regional Governments and then adopted by lower-tier municipalities. Most cities are working on a 20-year horizon for 2040 at present with many looking towards the Nordics for principles in good planning. There is certainly opportunity to influence this process through a Nordic City Solutions Master Class and knowledge sharing between the Nordic cities and municipalities within the GTA.

The biggest overarching themes in the Greater Toronto Area which resonate throughout are:

 Affordability – Growth in the GTA has been voracious over the last 15 years with little-to-no impacts as a result of the recession in the Toronto market landscape. The City continues to host more construction cranes than any other city in North America by a large margin. However, demand continues to outpace supply in the downtown, as more young professionals desire to move back in to the city, with construction unable to keep up. As a result, Toronto remains in a critical bubble where housing prices and affordability have outpaced the rate of inflation, leaving many millennials over-extended in their rental or mortgage commitments and families unable to afford a house within the inner-city. As this problem continues to grow, the GTA and its municipalities are searching for a solution to affordability.  Transportation – Transit in the GTA is approximately 30 years behind development. The Toronto Transit Commission is over capacity, and suburban commuter rail service is focused on peak service in and out of the core and not regionally connected. The GTA is highly focused on transportation solutions within the healthy cities framework (cycling and active transportation, reduction in emissions), resilience (how much economic value is lost through traffic each day and what would happen if a major transportation artery were impacted through a shock or stress) and smart cities (can technology be used to improve infrastructure efficiency and the daily lives of people).  Liveability – The focus on walkable, human scale communities and infill development is a big theme in the GTA. The demand for growth has resulted in bad planning and development decisions where liveable communities were not well thought through. The City of Brampton is the perfect example of a city which made poor decisions about growth that is now playing catch-up to improve its value propo-

10 sition for newcomers – both as residents and businesses. As a result, many cities in the GTA are looking to soften infrastructure through environmental-focused and intelligent design, intensification of development through infill and repurposing of existing building stock, pedestrianization and walkable neighbourhoods and improvements to public green space including parks and recreation areas. This presents considerable opportunities on many levels within the scope of Nordic City Solutions platform for companies, specifically relating to healthy, resilient and smart cities.

The City of Brampton has identified a number of areas of priority for Nordic City Solutions to continue dialogue for collaboration opportunities:

 Healthy City – With a high South Asian immigrant population and suburban development dominating the city landscape 1/7 residents in Brampton have issues with diabetes, resulting in additional risk for cardiac and kidney problems. The City is looking for ways to impact the spread of diabetes and related health issues through impacts to the urban environment, including active transportation, access to parks and other measures.  CAA Lands - The City of Brampton has 110 acres (44.5 hectares) of land for redevelopment a 7 minute drive from Toronto Pearson International Airport. This project is pre-Master Plan phase. The City has expressed an interest in collaborating with Nordic City Solutions on this major legacy project.  Sustainable Urban Development – The conversation around environmental and sustainably focused development has been on the backburner over the last decade. However, the City of Brampton see this conversation surfacing as a political agenda topic of great importance in the 2018 municipal election cycle.  Ryerson University Campus – Ryerson University, currently located in downtown Toronto, has recently been approved for a large secondary campus in Brampton with a $250 million CAD development opportunity.  Brampton’s Riverwalk - $250 million CAD storm water management infrastructure project in Bramp- ton.  Transit Terminal – The City of Brampton are looking to a new transit terminal within the city and are open to collaboration opportunities.

The City of Oshawa have identified the following areas of interest for future discussions:

 Air quality monitoring

11  Smart city solutions  Understand examples of how Oshawa could preserve natural assets as a business case for hard asset management.  Storm water management and the study of ecology in an urban environment.

The City of Toronto have no shortage of large-scale project opportunities in both the public and private sector where Nordic City Solutions could be involved. Major projects currently include, but are not limited to:

 Waterfront Toronto – Port Lands redevelopment and other waterfront area expansion. Also, Alpha- bet’s Sidewalk Labs has formed a joint venture with the City of Toronto called Sidewalk Toronto to establish a smart city laboratory in lands controlled by Waterfront Toronto. The venture is currently in a 1-year, $60 million CAD public consultation phase.  South Etobicoke – old industrial lands surrounding the rail corridor west of Toronto is expected to be the next big intensification area.

Ottawa, Ontario The City of Ottawa is the Capital of Canada, and the fourth largest city in the country with a population around 950,000 residents. The city is located on the south side of the Ottawa Riv- er, directly across from the City of Hull, Que- bec. As the Capital City and the seat of the Government of Canada, the City of Ottawa hosts a number of large government offices, research institutions, diplomatic hubs including 130 Embassy’s, two large Universities as well as a number of corporate headquarters including Nordic companies Nokia and Erikson, and a Figure 3 - Map of Ottawa number of Tech companies such as Shopify and Clipfolio (Invest Ottawa, 2018).

The Nordic City Solution met with stakeholders in Ottawa from March 6-8th including the Federal Government of Canada, Invest Ottawa, City of Ottawa Departments of Economic Development, Urban Planning, Resiliency and Natural Systems. All Nordic countries have representation in the City of Ottawa through their Embassy in the Capital of Canada.

The City of Ottawa is currently paired with the City of Malmo, Sweden as part of an EU grant which funds city partnerships. The focus of the relationship is smart cities and implementation of the SDGs. The partnership, which is still underway, has established considerable synergies between the City of Ottawa and the Nordic sustainable cities profile that Malmo has to showcase, and has provided considerable synergies for the Nordic City Solutions platform to pivot off of. Stakeholders within the City of Ottawa are very engaged and in-focus with the Nordic urban landscape and see great opportunity to advance this relationship on a more commercial level through involvement in the platform.

Decision making in the City of Ottawa is divided into three overlapping groups. In Canada, cities are creatures of the Provincial government and are thus bound to provincial policy and fiscal framework. However, the City of Ottawa is also home to the seat of the government of Canada, providing considerable jurisdiction to the Federal agencies involved in the holding and managing of Federal government assets, including the National Capital Commission and Public Works and Government Services Canada. While there are layers to navigate, overall collaboration between the City of Ottawa and the Federal Government of Canada is well managed and the city continues to progress its development agenda through mutual interests to advance the local economy and maintain a high quality of life for its citizens.

The Mayor of the City of Ottawa is Jim Wat- son, who is widely expected to be re-elected Figure 4 - Nordic City Solutions and the Ambassador of Iceland to Cana- in the October 22, 2018 municipal elections, da meet with the City of Ottawa which will happen across the Province of Ontario. The Federal Government of Canada’s governing Liberal Par-

13 ty under Prime Minister Justin Trudeau presently hold a parliamentary majority and are not scheduled to have an election until late 2019. Therefore, we see the political decision-making structure for opportunities in Ot- tawa to be relatively stable. It is also important to note that with the ratification of the Canada-EU comprehensive free trade agreement (CETA) in 2017, EU companies can now bid on government contracts.

The municipal budget for the City of Ottawa experienced a modest 4% increase from 2017 to 2018. However, with so much Federal government capital and operational budget expenditures focused on Ottawa, fiscal sta- bility is consistent and expected to maintain over the next number of years.

Master Planning in the City of Ottawa is currently focused on a 20-year time horizon. However, a number of municipal strategies are currently focused on: Air Quality and Climate Change Management, Environmental Strategy, Green space, Human services, Infrastructure, Investment Strategy for Sustainable Economic Pros- perity, Cycling, Pedestrianization, Parks and Recreation development and Transportation. All themes have relevancy to potential influence from Nordic City Solutions collaborations.

Current overarching themes in the City of Ottawa that present challenges and opportunities in the context of Smart, Healthy and Resilient cities include:

 Intensification of Development – As Ottawa grew outwards with few major barriers to curb development, the city has become increasingly suburban in form. However, the City of Ottawa has a renewed focus on intensification through a focus on infill developments, repurposing of old structures and a focus on transit-oriented development.  Energy Efficiency - With so much government asset operating in the City of Ottawa, there is a focus on energy efficiency and cost savings in building operations. The primary vessel up to this point has been the North American Leadership in Energy and Environmental Design (LEED) certification.  Capital Infrastructure Upgrades – Upgrades to storm water, sanitary sewers, roads and highways and other major asset management pieces.  Accessibility – Ensuring accessibility for citizens across Ottawa to work, live and play.  Affordability – Ottawa has less challenges than the GTA. However, they are focused on staying ahead of the affordability problems to ensure there is space for all income levels within the city.

14  Liveability – The City of Ottawa boasts itself as the most liveable city in Canada. They are engaged in opportunities to share experiences and increase the overall level of liveability within the city in a Nor- dic context.

The City of Ottawa have identified a number of relevant ongoing and future projects for potential collaboration between local stakeholders and Nordic City Solutions participants.

 Le Breton Flats – Former Federal government office development that is slated for redevelopment after a land-swap with the City of Ottawa. The lands have been procured by a private developer for the purposes of a new NHL arena and mixed-use development just west of downtown Ottawa.  Zibi Development – Former Domtar lands on the Ottawa river have been acquired for development by Windmill Development Group and Dream Unlimited Corp with a focus on sustainable living.  Active transportation and cycling infrastructure – The City of Ottawa has one of the most progressive cycling systems in terms of vision and master plan, infrastructure and overall ridership in Canada with a modal share of 9.6% in 2016 – double that of the Canadian average. This is particularly impressive for a city with such a harsh winter. There are considerable opportunities for Nordic City Solutions to collaborate on additional active transportation and cycling infrastructure in the Ottawa area.  Ottawa Main Branch Library – the Ottawa Library design competition has recently announced its short list for the site located on the LeBreton Flats redevelopment. However, the associated construction is an opportunity for Nordic solutions providers with a slated budget of $165 million CAD.  Development offshoots as a result of the new Ottawa Civic Hospital - The City of Ottawa has identified opportunities for partnership around the offshoot development which will result from the construction of a new Ottawa Civic super hospital with a budget of $2 billion CAD.  Gladstone Village Development – 7.26 acre (3 hectare) site in downtown Ottawa for mixed use, mixed income development.  EV and AV Testing – The City of Ottawa was home to the first autonomous vehicle testing area in Canada. Also, with so many government vehicles operating in the City, both the City and Federal Gov- ernment are looking to electric vehicle infrastructure to green their fleet operations. This opens considerable opportunities for Nordic firms to partner in this area to advance autonomous and electric vehicle technology and infrastructure in a region of high adoption.

15  Storm Water Management and Resiliency – The City of Ottawa has identified storm water management and urban resiliency infrastructure in the form of flood protection as an area of opportunity for collaboration.

San Francisco Bay Area, California San Francisco Bay Area is home to approximately 7.6 million people in nine-counties with cities including San Francisco, Oakland, San Jose, Palo Alto and Berkeley to name a few. The area is home to a number of higher education institutions and is a central area for innovation and tech. The Nordic City Solutions team met with stakeholders around the Bay Area from March 12th to 15th, 2018. Specific cities of focus for the visit included Nordic Innovation House and Palo Alto, the City of Berkeley and the City of San Francisco. The network developed during the visit has also offered to connect us with the cities of Freemont, Oakland and Palo Alto due to their progressive sustainability initiatives and “first mover” attitudes towards urban change. We hope to pursue this opportunity for discussion as the Nordic City Solutions program evolves.

There are many synergies between the Nordics and the Bay area, foremost of which is the presence of Nordic Innovation House in Palo Alto, which serves as a jumping off point into the US market for Nordic tech companies. This centralized hub presents an existing Nordic collaboration in the region, similar to the ecosystem present in New York. Almost all of the Nordics have a trade presence within the Bay Area, as well as a strong Honourable Consul network. Figure 5 - Nordic Innovation House Decision making in the Bay Area is done individually by cities. There is less of a regional scope to things, outside of the Bay Area Rapid Transit (BART) which links the region together by public transportation. The State Government of California, with Governor Gerry Brown are strong backers of cities and sustainable infrastructure upgrades relating to sustainability and urban resilience.

Both the City of Berkeley and the City of San Francisco experienced municipal budget increases this year with Berkeley growing by a large margin of 17% and San Francisco by 6%. Private sector financing and University

16 endowments play a significant role in development funding. However, it is important to note that State of California procurement laws are very strict and not necessarily friendly to external outside companies. Also important to note is the level of competition for opportunity with California is extremely high due to the local rate of innovation and demand.

Most cities in the Bay Area have a very progress focus on Master Planning and are currently working on a 20- year planning horizon with 10-year economic development plans.

Overarching themes from the Fact Finding mission in the Bay Area include:

 Resilience – The pressure on California from traditional shocks and stresses is very high. The state is susceptible to all types of natural disasters including wild fires, earth quakes, severe storms and flood- ing to name only a few. Inequality is high, and disparity between the rich and the poor is growing. As a result, there is a strong focus on opportunities and services for Urban Resilience. San Francisco, Oak- land and Berkeley are all members of 100 Resilient Cities by the Rockefeller Foundation and are presently implementing strategies locally as a result.  Energy Efficiency – The City of Berkeley has identified an interest in energy efficiency solutions, community energy solutions and control, specifically heat pumps.  Transportation – With such a high population and so many vehicles on the road, a major overarching theme in the Bay Area is an increase in transportation options. This includes both active and public transportation options. Berkeley present have the 2nd highest walk-to-work and bike-to-work modal share in the US at 10-12%.  Smart Cities Solutions – There are a number of opportunities to integrate smart cities solutions into the urban infrastructure around the Bay Area. As a result of the volume of traffic, smart parking solutions are a specific area of demand.  Equity – The struggle for equity which has been divided along racial lines is a high priority for the Bay Area. Racial, economic and affordability are critical challenges that the entire region presently face. As is the high level of homelessness and drug use. Furthermore, the gap in income disparity continues to widen with the loss of the middle class.

Specific project opportunities in the Bay Area were limited based on strict procurement rules and stakeholder engagement. Additional research and investigation would be required to establish more concrete market op-

17 portunities within the Bay Area. However, the overall opportunities for Healthy, Resilient and Smart Cities exist within the market.

Greater Houston Area, Texas Greater Houston is home to a population of approximately 6.3 million people, the fourth largest metropolitan area in the United States. Houston claims itself to be the most diverse city in the United States. As an international oil hub, Houston is attracting people from around the globe, into a true melting pot of American culture.

The Nordic City Solutions team met with stakeholders in the Houston Area from March 20th to 23rd . Stake- holders in the Great Houston area included Urban Harvest, Bike Houston, the City of Houston Green Building Resource Center, Rice University and the Baker Institute and Center for Houston’s Future. The Norwegian Trade Council have an established network in Houston through their oil industry trade efforts, while the Danish Trade Council have recently opened a Consulate in the city. All countries have a strong representation of Honourable Consuls who can assist with networking and trade promotion.

Decision-making in Houston is an interesting study in government service delivery. Government decision-making is very concentrat- Figure 6 - Nordic City Solutions with the Baker ed to a few powerful individuals on the city and surrounding coun- Institute for Public Policy and the Kinder Insti- tute for Urban Research at Rice University ty government levels, as well as with the State. However, access to these individuals and various levels of bureaucracy in Houston is open. For the most part, government sets the policy and the service delivery is left up to the private sector for execution through various NGO’s/charities/conservancies/individual donors. For example, public park infrastructure in Houston is admin- istrated through a parks conservancy, which is governed by a board of prominent individuals within the community. These board members make spending decisions around major infrastructure investments within the city.

Similar to the decision making structure, the civic capital and operating budget for the City of Houston is small in comparison to its size – approximately $5 billion USD in 2017. One stakeholder meeting discussed the fact

18 that there was an estimated $6 billion in deferred roadwork maintenance under the City’s jurisdiction. Howev- er, the key to infrastructure delivery in Houston lies with the private sector and the state. Houston is famously a boom-and-bust economy as a result of the reliance on oil finance, so any opportunities that arise must be captured quickly.

Houston is famous for its deregulated planning framework. The City of Houston famously states on it’s web- site that there is no zoning by-law in effect. This means that a 40-storey high rise commercial building can exist adjacent to a single-family home. While this presents a number of challenges, it also presents considerable opportunities due to the extremely low barriers present for development.

The biggest overarching theme in Houston at present is the topic of Urban Resilience. Texan’s have been rather famously sceptical of climate change. Over the last three summers, Houston has been home to three “once in 500 year” flood events, the last of which - Hurricane Harvey - completed crippled the city. As a result, Houston is in a reactionary mode. When we visited in March, the City had just finished cleaning up from the storm and was beginning to talk about infrastructure upgrades in preparation for the 2018 storm season at the end of the summer. Houston is very aware that they are facing a new climate reality, and they are open to solutions for how to tackle it.

Other common themes across Houston include:

 Naturalizing the Bayou – Houston is in essence a large floodplain with water channelled through rivers called Bayou’s. There are 22 bayou systems and waterways that drain water from greater Houston in- to the Gulf of Mexico. These bayous are predominantly channelized concrete rivers which move flood waters, with some naturalization using bio swales and vegetation, such as Buffalo Bayou which has become a major recreation and park destination in addition to serving as a storm water management system. However, they were completely overcome during Hurricane Harvey. This has resulted in a push for discussions relating to further naturalization of the various bayou systems around Houston from channels to natural integrated landscapes. This aligns well with Nordic expertise in storm water management, ecology and blue-green infrastructure.  Urban Heat Island Effect – The city of Houston is a sunbelt climate and is under the urban heat island affect. There is an opportunity for solutions relating to urban heat island reduction for Nordic City So- lutions providers. This can also transfer into green building technology – but with a focus on cooling instead of heating.

19  Urban Farming and Sustainable Agricultural Farming Practice – The Greater Houston area is a hub for farming due to the hot, wet climate. There is also a renewed focus on food security as a result of increased risk of natural disasters. Therefore, there is a Nordic City Solutions opportunity to collaborate with the City on urban farming and sustainable agricultural practices.  Transportation – Houston has one of the highest rates of fatal car crashes in the United States. As a result of the City’s high level of cultural diversity and immigrant population, there is an opportunity for a high level of transit adoption. However, public transit has not been a priority. Therefore, long-term, sustainable transportation solutions are an area of opportunity for Nordic City Solutions providers to focus on.  Cycling – There has been an uptake and increased ac- ceptance for cycling in the City of Houston. Over the last 5 years, the volume of cycling infrastructure has in- Figure 7 - Houston Bike Share creased significantly. NGO Bike Houston are presently in charge of advocating for increases in cycling infrastructure across the city region. However, the group face challenges with respect to funding from the municipal government level.  Future of Energy – The Center for Houston’s Future have identified the future of energy as a critical theme for the City of Houston and complimentary Nordic competencies. The City is home to a number of research centers with a focus on energy, including the Houston Advanced Research Center and Rice University. The appreciation for the business case for renewables is a strong theme across the state, as wind turbines and solar are prime candidates for the Texas climate.  Smart Cities – The City of Houston is looking for a differentiator and is keen to learn more about opportunities for smart city solutions from the Nordics.

Future opportunities in Houston are broad reaching. Due to the bulk of the opportunity coming from the private sector, projects are not as evident as they are in other cities across the US and Canada. However, Hou- ston is by far one of the most open markets to outside partnerships in North America, and the market is ripe for solutions as a result of the need to react to critical climate change challenges through infrastructure upgrades. Opportunities in Houston can be a quick turnaround from the right type of event staged with the right partners. We see significant opportunity to work with private sector partners in the greater Houston area.

20 Twin Cities & Rochester, Minnesota The Twin Cities of Minneapolis and Saint Paul represent the economic and government capitals of the state, respectively with a population of 3.6 million people. The seven counties surrounding the Twin Cities are referred to at the Metropolitan Council and have a regional government structure. The Twin Cities are home to the 13th largest economy in the United States according to the 2016 cen- Figure 8 - Nordic City Solutions team with State of Min- nesota and Mayo Clinic sus data.

The Minneapolis–Saint Paul area is home to 16 of Minnesota's 17 Fortune 500 headquarters – UnitedHealth Group, Target, Best Buy, CHS, 3M, US Bancorp, Supervalu, General Mills, Land O'Lakes, Ecolab, CH Robinson Worldwide, Ameriprise Financial, Xcel Energy, Thrivent Financial, Mosaic, and Patterson. A number of private companies are also headquartered in the Twin Cities area, including Cargill, the country's largest private company, Carlson, Radisson Hotel Group, Mortenson, Holiday Stationstores, and Andersen. Foreign companies with U.S. headquarters in the Twin Cities include Aimia, Allianz, Canadian Pacific, Coloplast, Medtronic, Pear- son VUE, Pentair and RBC.

Nordic City Solutions met with stakeholders in the Twin Cities area from March 26th to 29th, 2018. The meetings were coordinated through Channon Lemon, a contact at the Saint Paul Chamber of Commerce. The Nordic City Solutions team met various stakeholders across the region, including: Saint Paul Chamber of Commerce Board, the Saint Paul Port Au- thority, North Minneapolis development group, the Metro- politan Council (regional government), Energy non-profits including Fresh Energy, Clean Energy Economy, Center for Figure 9 - Nordic City Solutions team with Mayor of Energy and Environment and the Environmental Initiative, Saint Paul and Executive Team the University of Minnesota, the City of Saint Paul including Mayor Melvin Carter and his executive team, the Minneapolis-Saint Paul International Airport, the State of Minnesota and the City of Rochester private development partner the Mayor Clinic.

21 There is no formal permanent trade office in the Twin Cities for any of the Nordics. However, a strong Hon- ourable Consul presence can help facilitate relationships and provide an ongoing presence in the Cities.

Nordic synergies run deep within the State of Minnesota. It began as a destination for Nordic immigration to the United States in the early 1800 and many Minnesotans boast Nordic surnames such as Malmquist, Ander- sen or Olsen. During our visit to the Twin Cities, there was considerable openness and curiosity to Nordic ideas. A popular reference was made to a Swede who brought over district energy systems in the 1970’s, which have been adopted in various projects across the state. There is an overall openness to progressive, environmental decision making. The biggest barrier we see if the lack of understanding about the business case. However, this is a barrier that can be overcome through knowledge sharing and proven business cases from our domestic markets.

Decision making within the Twin Cities is slightly different. The City of Saint Paul has a strong mayor system, where the Mayor has direct power over city decision-making. Minneapolis is structured slightly differently, where the city has a weak-mayor system and the Council has more power over collective decision making on a municipal level. However, the two Mayors are both recently elected on a strong, very progressive and commit- ted to working together to advance the interests of the Twin Cities as a whole on the international stage with a top-down mandate on sustainable urbanism. Decision-making in Rochester, our secondary market opportunity 90 kilometers south west of the Twin Cities is significantly influenced by their major tenant, the Mayor Clin- ic and their associated developments. The current Governor Mike Dayton is at the end of his second term with elections scheduled for November 2018. Feedback from locals was that regardless of the outcome being Re- publican or Democratic, they saw Minnesota’s future as a very progressively centrist state open to new opportunities to advance competitiveness and liveability.

The Municipal budget for Saint Paul increased by 26% from 2017 to 2018, while Rochester’s increased by 21%. Data was not available for Minneapolis at the time of this report.

Master Planning is well coordinated at a regional level. The Metropolitan Council oversee the seven counties around the Twin Cities area with a coordinated Master Plan document. There are identified opportunities for collaboration with the Metropolitan Council on a Regional Planning level with Nordic public diplomacy, specifically around areas of public transit infrastructure.

The major overarching themes in the Twin Cities are:

22  Equity – Like much of the United States, people of colour have been left behind with lack of opportunity through various measures of racial divide, including historical zoning measures for segregation, financial and education disparities and lack of access to basic services. The Twin Cities are very focused on opportunities for employment, access to services and evening the playing field for people of colour. For example, the North Minneapolis development corporation was focused on bringing bike share and car share short-term rentals to a neighbourhood where residents are primary African American. De- spite these services being seen as low barrier to many, they are primarily targeted towards the white, middle-class urban population. Prioritizing equity in the community means allowing equal access to opportunities for all citizens.  Transportation – Minneapolis has one of the most comprehensive active transportation networks in the United States. There is a large network of cycle lanes across the city, despite its cold winter climate. Ad- ditionally, regional rail and addi- Figure 10 - Separated bike lane on bridge in North Minneapolis. tional transit oriented development focused on walkability to rail stations is seen as a priority for the area.  Access to Water – The Twin Cities are located at the western edge of the Great Lakes system. Water has been abundant for a number of years, and was never considered a problem. However, there is in- creasing awareness about the stress on the aquifer system under the metropolitan area after two seri- ous draught years. As a result, there is increased focus on both access to potable water and the repro- cessing of storm water back into the system.  Resilience – Minneapolis is a member of 100 Resilient Cities, however resiliency is not isolated to this city alone. Saint Paul have also hired an Executive position into the Mayor’s cabinet with a focus on urban resilience within the Twin Cities region. Unlike many coastal US cities who are currently re- acting to resiliency in a defensive way (such as Houston), Minneapolis and Saint Paul are taking a pro- active approach to their resiliency strategy implementation. They are approaching it with an open mind and are open to collaborative solutions. This presents a considerable opportunity for Nordic City Solutions to partner on a number of Nordic resiliency soutions within the greater Twin Cities area.

23  Affordable Housing - Affordability is an extension of the equity theme in the Twin Cities. Ensuring access to quality, sustianable affordable housing is a priorty for both Twin Cities administrations.  District Energy – Minnesota has had one of the highest rates of district energy implementation in the United States. There is a progressive view of district energy and waste-to-energy solutions. The Nordic came with this influence back in the 1970’s and continue to collaborate in this trade space today. While many of the TPO’s are working individually on District Energy solutiosn within the region already, there is an opportunity to increase this collaboration level to a more Nordic presence.  Green Building – There is a desire for sustainable building materials within the State of Minnesota. Giv- en the extreme temperature swings with cold winters and hot summers, energy efficient buildings and construction quality are something Minnesota is looking to build on. The University of Minnesota is home to the Center for Green Building Research and present an area for increased collaboration and knowledge sharing, which could in turn provide an interesting commercial market for Nordic suppliers. Specific things such as modular sustainable homes, smart homes and retrofit opportunities. The key to this is the business case – showing that by spending incrementally more, end-users can save in the long term – even when natural gas is cheap and energy costs are around $0.11 USD / kWh. Framing this value proposition will be key for Nordic companies looking to establish in this market.

Stakeholders within the Twin Cities and Rochester have identified a number of relevant ongoing and future projects for potential collaboration between local stakeholders and Nordic City Solutions participants. Some of these include:

 Ford Site – Large scale redevelopment of a former Ford Motor Company car manufacturing site adjacent to the Mississippi River.  Arden Hills Site – An former army base in Ramsay County which has been identified as a 427-acre eco- district redevelopment.  Destination Medical Center (Mayo Clinic) Rochester  Prospect Park – University of Minnesota real estate arm.  Eco Districts (conference in Minneapolis this year) – Presents an excellent opportunity for a Nordic themed focus at this years national conference on eco district developments.  Saint Paul Rondo Park – reclaiming green space back by covering the express way.  River Front Project – Public space development along Saint Paul riverfront with associated development.

24  Biogas Conversions

New York City & Tri-State Area The New York City and Tri-State area covers parts of the states of New York, New Jersey and Connecticut, and can also be referenced as the New York metropolitan area. The region is claimed as the largest urban land- mass in the world, at 11, 642 square kilometers (4,495 square miles) with an estimated population of over 20 million people.

The Nordic City Solutions team met with the City of Stamford, Connecticut on February 20, 2018 and various stakeholders in the City of New York between April 3rd and 5th. These stakeholders included the Borough of Manhattan, New York City Department of Urban Planning, Empire State Development Corporation and Eco- nomic Development Corporation of New York City.

There are strong synergies between the Nordics and New York City specifically. All five TPO’s have offices and diplomatic presences within New York City, the City of New York has a collaboration partnership with the City of Copenhagen, the city is home to both the Danish Cleantech Hub and Nordic Innovation House, as well as home to many Nordic companies who have a presence in the United States.

Decision-making in New York City is a complicated web of jurisdiction, regulation, public sector, private sector and public consultation. However, the Mayor has considerable power within the City and historical Mayor’s have made significant impacts on the urban landscape – specifically Michael Bloomberg who, through his foundation, now finances a number of progressive urban initiatives including C40 cities and sustainability pro- grammes worldwide. In surrounding suburban satellite cities such as Stamford, Connecticut, considerable decision-making power exists within the hands of the corporations who choose to establish large corporate offices in certain cities.

The City of Stamford’s budget from 2017 to 2018 under went a 49% cut. Based on this and conversations re- garding openness and resources that the team recommended that Nordic City Solutions not pursue opportunities in this municipality. Meanwhile, the City of New York’s 2017 budget was $82 billion, while 2018 figures were not available at the time of this report.

There were a number of overarching themes currently facing the City of New York and surrounding areas:

25  Resilience – The City of New York is a member of 100 Resilient Cities and has a current focus on insulat- ing the city from risks related to shocks and stresses. Superstorm Sandy still has strong effects on the infrastructure challenges within the City, and many agencies are still focused on rebuilding and prepar- ing for the next big storm event. Sub-categories of Resilience in New York City include: o Infrastructure upgrades – both above and below ground o Food security o Flood and storm water management solutions o Electrical grid diversification  Waste – The issue of waste is one of the biggest challenges facing New York City today. The move- ment of a constant stream of waste out of Manhattan and the surrounding boroughs in such dense settings is a daily struggle that impacts overall liveability and quality of life for both people and businesses. In addition to waste-only infrastructure, the need to better move, process and utilize recycling within the city.  Balancing Density with Growth – As land is an almost scare resource in many areas of New York, density is a requirement. The city is curious about how to balance both in a liveable, smart and healthy context.  Affordability – How can New York provide housing to options to the spectrum of income?

26 Recommended City Markets & Next Steps

North America presents considerable opportunities to Nordic City Solutions providers. The fact-finding mission over the last number of months was an excellent way to understand the variety, opportunities, challenges, and be able to prioritize markets from both the qualitative and quantitative perspective.

In summary, the Project Secretariat would like to recommend that the North American Steering Committee focus efforts on the markets in Ottawa, the Greater Toronto Area, the Twin Cities and Houston for maximum benefit to our future Nordic stakeholders. Further discussions will be needed with each city to drill down and understand more about specific project opportunities. However, we feel all four markets are open to collaboration, Nordic opportunities and an ongoing relationship.

While New York City is a lucrative market for Nordic City Solutions, it is also an already crowed market with many Nordic agencies and affiliates doing work here. We recommend that the platform focus on other areas of North American in order to provide a broader benefit to Nordic businesses in areas that do not already exist to the degree that presently do in New York City. However, the Steering Committee see a lot of potential in using New York City as a branding hub for our initiative given our large market presence, the focus on New York City as a gathering place for city-thought leadership including conferences, events and a place which is home to many NGOs (i.e. major foundations, organizations, etc.) that the platform can tap into in order to grow our market further in North America. It is recommended that the project continue to pursue marketing, branding and further networking opportunities within the New York City area and establish our presence.

Similar to New York, the San Francisco Bay Area presents considerable opportunity but also significant competition. While we feel there is the opportunity for success in this market, we feel the risks are higher and the payback longer. However, we would also like to recommend that market demand from our members drive this

27 future opportunity. If companies demand we grow to the Bay Area, we can do it. However, we would recommend focusing on other opportunities ahead of the Bay Area.

Overall, we feel the Twin Cities present the greatest opportunity for long term collaboration in a stable market with less competition. The overall openness to collaborate with each other, and with the Nordics was so reso- nant in Minnesota, it is impossible to ignore. Similarly, Ottawa presents a considerable long term opportunity in a mid-size, stable city with an openness to international collaboration.

On a more aggressive approach, the City of Brampton, which is just outside of Toronto is a good Canadian example of a potentially aggressive opportunity for the Nordics to capture quickly on a strong need. They are hungry to catch up to the City of Toronto and excited about being chosen for collaboration by the Nordics.

On the US-side, Houston is the biggest surprise. The current need to respond to infrastructure challenges and private sector procurement options provides a great opportunity for Nordic City Solutions to have a quick turnaround on activities with a strong business case.

As a next step, on approval from the Nordic City Solutions North American Steering Committee, the project will reach out to individual cities and stakeholders within our network to:

 Notify the cities of our choice to move ahead with them as a priority market  Share different activities and initiatives (i.e. Urban Lab, Techincal Workshops, conferences and other offerings) for collaboration.  Encourage dialogue with cities to determine exact themes to focus on in order to recruit appropriate companies from the Nordics.  Determine timeline for future activities  Clarify any additional items which are critical to the project

The Nordic City Solutions team will continue to engage cities across North America in order to build out the project network and increase opportunities for the successful match of projects with Nordic companies and competencies for the future.