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Havnestad Copenhagen, Denmark Havnestad Copenhagen, Denmark Project Type: Mixed-Use/Multi-Use Case No: C033014 Year: 2003 SUMMARY A 1.6 million-square-foot (150,000-square-meter) industrial area along the harborfront in Copenhagen, Denmark, that is currently being transformed into a new urban development that at buildout will include between 800 and 1,200 residential units and almost 10.5 million square feet (975,000 square meters) of commercial space. The project not only is an innovative example of how a significant postindustrial, brownfield remediation was accomplished through a process that was self-financing, but also is projected to net a handsome financial return of approximately DKK225 million, or approximately US$32 million. FEATURES Brownfield remediation Special effort by the developer to enter into a dialogue with the surrounding community Self-financing project Havnestad Copenhagen, Denmark Project Type: Mixed-Use/Multi-Use Volume 33 Number 14 July–September 2003 Case Number: C033014 PROJECT TYPE A 1.6 million-square-foot (150,000-square-meter) industrial area along the harborfront in Copenhagen, Denmark, that is currently being transformed into a new urban development that at buildout will include between 800 and 1,200 residential units and almost 10.5 million square feet (975,000 square meters) of commercial space. The project not only is an innovative example of how a significant postindustrial, brownfield remediation was accomplished through a process that was self-financing, but also is projected to net a handsome financial return of approximately DKK225 million, or approximately US$32 million. SPECIAL FEATURES Brownfield remediation Special effort by the developer to enter into a dialogue with the surrounding community Self-financing project PROJECT ADDRESS Islands Brygge, Copenhagen www.havnestad.com OWNER/DEVELOPER DS Industries ApS Islands Brygge 81, 2. 2300 Copenhagen S, Denmark +45 32 54 66 00 Fax: +45 32 57 76 57 www.eac.dk ARCHITECT PLH Arkitekter AS Pampfærgevej 10 2100 Copenhagen Ø Denmark +45 35 43 00 55 Fax: +45 35 43 10 55 www.plh.dk GENERAL DESCRIPTION A 1.6 million-square-foot (150,000-square-meter) industrial area along the harborfront in Copenhagen, Denmark, that is being transformed into a new urban development that at buildout will include between 800 and 1,200 residential units and almost 10.5 million square feet (975,000 square meters) of commercial space. The project not only is an innovative example of a developer overcoming a significant postindustrial, brownfield remediation through a process that was self-financing, but also is projected to net a handsome financial return of approximately DKK225 million, or approximately US$32 million. The developer responsible for Havnestad is DS Industries, a subsidiary of Denmark’s East Asiatic Company (EAC). EAC is a company with diverse interests in nutrition, food, bulk industrial ingredients, and international moving and relocation services. EAC’s activities are primarily based in Denmark and Asia. DS Industries operated a soybean import and production facility on the site and has led the development process for Havnestad. The subsidiary’s activities in real estate development are outside the scope of business for EAC, but may serve as a model for other such company initiatives in the future. The real estate market in Copenhagen has been operating at record-high levels. There is a high demand for housing in Copenhagen, and both the public and private sectors have been racing to meet this demand. Also, companies have been constructing build-to-suit offices along the harborfront, which are very attractive to employees who enjoy the central location, the views of the water, and the modern, light-filled office space. THE SITE AND ITS SURROUNDINGS Havnestad is a significant part of the Copenhagen harborfront’s current transformation. Historically, the harborfront has been home almost exclusively to industry and shipping, but over the last ten to 15 years these functions have been dwindling or moving to locations away from the central harbor. In the wake of these changes, large areas of the harborfront have become available for development. During the same period, the city of Copenhagen has actively encouraged the replacement of industry in these areas with a mix of functions including commercial, residential, cultural, and recreational uses. Havnestad is a recent reflection of this effort. The proximity of Havnestad to the central city and its unique location between the water and a large, protected nature reserve make it one of the most attractive of the harborfront transformation areas. Havnestad is part of the Islands Brygge area of the harbor, located on the island of Amager, in central Copenhagen. The six-acre (2.4-hectare) site was formerly the home of the Danish Soyakage factory, which imported soybeans from Manchuria and extracted soybean oil for sale. There are several notable historic structures on the site, among which the best preserved and most adaptable are a series of large silos and a big machine hall. The silos, in particular, have figured prominently in Copenhagen’s skyline for nearly 100 years. Surrounding Havnestad to the east is an extensive nature preserve called Amager Fælled and typical, five-story Copenhagen urban housing from the first quarter of the 1900s to the north. To the west of the site lies the waterfront, with further harbor development to the south. Similar development, primarily commercial in use, can be found on the western side of the harbor immediately opposite Havnestad. Like most of Copenhagen, the flat development site was reclaimed from the sea around 1900. Natural vegetation exists in the form of heath grasses and shrubs that thrive on the relatively wet soil and in the wind constantly blowing in off the Baltic Sea. DEVELOPMENT AND PLANNING PROCESS EAC terminated operations on the site in the late 1980s. This left the company with a large property that had pollution issues on a scale that made redevelopment economically unviable and technically impossible. The property was not a financial burden on the company, since several of the old warehouses were leased out for storage and artist studios. In addition, the pollution that was hindering redevelopment also kept property taxes low. Nevertheless, there was still a strong desire to redevelop and sell the property. The first step in remediation was a two-year analysis and registration of the pollution on the site. When a precise map was completed, it revealed that the problem was concentrated on the southern end of the site and that redevelopment could actually start immediately on the site’s northern end. DS Industries then began a dialogue with the municipality and consulted with a traditional real estate developer to explore specific development options. During this period, significant advances in pollution remediation technology were made, which made cleanup not only economically viable but also physically possible. The planning process for Havnestad was based on open and honest communication between DS Industries and both the municipality and residents in the surrounding neighborhood. A steering committee with representatives from DS Industries, the city of Copenhagen, and the environmental regulation authorities was established very early in the process. The committee met once a month and DS Industries maintained an open flow of information through this forum. This arrangement created a high level of trust among the parties involved and focused their efforts on the common goal. Residents in the adjacent neighborhood were kept informed of the planning process. In addition, DS Industries took out whole-page advertisements in the local newspaper twice a year explaining the current status of the project. Also, local residents were invited to events held on site during the initial stages of development. DS Industries gained a tremendous amount of support from local groups and the project passed through the approvals process without significant complaints from either the private or public sector. FINANCING Orders from the parent company, EAC, were clear from the beginning: the development project had to be self-financing. In order to accomplish this, an environmental fund was established. Income from the sale of individual parcels went into this fund, which then financed the remediation of the old factory area and the development of new infrastructure. Money placed into the fund was to be used only for environmental cleanup, and the municipality was allowed to inspect the fund’s accounts twice a year to ensure that the money was being used as promised. The fund served as a guarantee to the municipality that remediation would be completed as well as a guarantee to potential buyers of the individual parcels that polluted areas adjacent to their development site would be cleaned up. The industrial area was divided into parcels for sale according to overall design guidelines generated for DS Industries by PLH, a Copenhagen-based architecture firm. This guide formed the basis for a new “Lokalplan,” or local plan, which was approved by Copenhagen’s planning department. Sale of the individual parcels went faster than anticipated and was completed over the span of a single year from 1999 to 2000. The area was sold to developers through six separate purchases. The first developer to buy parcels was NCC, a large Scandinavian developer and construction company. After NCC, the next group of parcels was purchased by Sjælsø Gruppen, a Danish investment group that later purchased additional areas as part of a consortium under the name of Havnestad Syd. Other buyers include JM Danmark, a Swedish-owned housing developer; AKB, Lejerbo, and Kuuber, all Danish housing developers; and St. Frederikslund A/S, which forms the Havenstad Syd consortium together with Sjælsø Gruppen. DS Industries purchased another property along the wharf to the north of the site, which will be developed as a recreation area. The addition of this parcel to the original development property allowed the maximum density of the project to be raised from an average of 110 percent up to 130 percent, provided that no building will be built on the additional property.
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