Puerto Madero a Critique

Puerto Madero A CRITIQUE © Alvaro Uribe The old port Alfredo Garay with Laura Wainer, district of Buenos Hayley Henderson, and Demian Rotbart Aires (above) is thriving again. Santiago ore than two decades have passed Calatrava’s since a government-led megaproject footbridge (inset), set out to transform Puerto Madero, Puente de la the oldest sector of the port district Mujer, spans the M © iStockphoto.com at the mouth of the River Plate in Buenos Aires, water at dock 3. Argentina. Once a center of decay that was hastening decline in the adjacent downtown, Puerto Madero is now a tourist icon and hub of progress, drawing in residents and visitors alike to its park and cultural amenities, housing approximately Encompassing 170 hectares near the down- 5,000 new inhabitants, and generating 45,000 town presidential palace (Casa Rosada), Puerto service jobs. Home to a number of new architec- Madero was one of Latin America’s first urban tural landmarks—including Santiago Calatrava’s brownfield renewal projects of this scale and Woman’s Bridge (Puente de la Mujer) and César complexity. The project was conceived as part Pelli’s YPF headquarters—the redeveloped port of a wider strategy for city-center development has contributed to the reactivation of the city that also included changes in land use regulations, center, influencing development trends through- building refurbishments, and social housing in out the Argentinean capital. heritage areas. This article draws on two decades’ 2 LINCOLN INSTITUTE OF LAND POLICY • Land Lines • JULY 2013 worth of evidence and experience with the project housing. The proposed redevelopment of Puerto to examine the extent to which Puerto Madero has Madero was part of the city’s broader strategy to achieved its central objectives: to contribute to the protect heritage, promote downtown development, reversal of undesirable development patterns in stimulate the local economy, and contribute to the city, assert the downtown as the eminent center the reversal of these undesirable settlement of Buenos Aires, stimulate the local economy, and patterns. improve the living conditions of all porteños. Development took place in four stages. During the first phase (1989–1992), CAPM sold the old The Port in Crisis docklands on the western end of the port, initiating Puerto Madero was abandoned as a port at the the redevelopment process and covering initial beginning of the 20th century, when operations project costs. In 1991, the city and Society of transferred to Puerto Nuevo. By the late 1980s, Architects signed an agreement to facilitate the Puerto Madero had suffered several decades of Puerto Madero National Ideas Competition. Puerto neglect and underutilization. The federal General In 1992, the three winning Administration of Ports owned the land, but the teams collaborated to create city and national governments both had jurisdiction the Draft Urban Project for Once a center of decay over planning. Similarly, greater Buenos Aires— Puerto Madero. The redevel- Madero home to 35 percent of Argentina’s population and opment required a new sub- that was hastening decline producer of 46 percent of its GDP—is governed division geometry that would in the adjacent downtown, by an overlapping set of institutions that often allow for construction without A CRITIQUE have trouble coordinating. To simplify this inter- requiring the demolition of Puerto Madero is now a jurisdictional governance, a public limited corpo- valuable landmark structures. tourist icon and hub of ration, with shares divided equally between the Many of the historical port national and city governments, was formed to buildings, such as the ware- progress. manage the project. In 1989, the federal govern- houses, would be restored with ment transferred ownership of this sector of the new functions, thereby com- port to the new corporation, CAPM (Corporación bining valuable historic patrimony with new Antiguo Puerto Madero). development. After receiving the federal land transfer, the During the second phase (1993–1995), the winners role of CAPM was to develop the site plan, define of the Ideas Competition were awarded the master a self-funded financial model, undertake the site plan contract. The original proposal called for the improvements associated with the project, com- development of 1.5 million square meters of floor mercialize the land, and supervise the develop- area concentrated in a central location to help ment process in accordance with the established revive the downtown. With a 20-year horizon, the time frames and guidelines of the master plan. Unlike similar ventures elsewhere in the world, Harbor cranes which generally rely on substantial public financing are still an integral part of or access to credit, CAPM by decree would receive the cityscape. no public resources besides the land transfer and would generate its own revenue to cover operating costs. The port redevelopment could not have happened otherwise, as the federal government was focused on fiscal recovery and job creation amidst a nationwide economic crisis. © iStockphoto.com/Magaiza Context and Chronology of the Megaproject As in most Latin American cities, the displacement of activities from Buenos Aires’s traditional downtown had curtailed use of the public transit system and led to the slow decline of historical buildings, many of which had lapsed into substandard JULY 2013 • Land Lines • LINCOLN INSTITUTE OF LAND POLICY 3 FEATURE Puerto Madero © iStockphoto.com/Ralf Hettler New towers rise behind the old docks. plan comprised commercial activities, cultural and complete the public works required by the project. recreational facilities, cafes, restaurants, amenities, The fourth phase of development includes professional studios, and medium-sized commercial two segments, from 2001 to 2003 and from 2004 activities (e.g. printing, packaging, and storage to today. Initially, the project suffered from the companies), which the 16 renovated former port economic, financial, and political turmoil asso- warehouses could adequately accommodate. ciated with the 2001 fiscal crisis propelled by Provisions for green space, to compensate for an the government’s default on its external debt pay- observed deficit in the extended city center, included ments. Throughout that period, CAPM faced a metropolitan central park, ecological reserve, high levels of governmental uncertainty, and land and rehabilitated southern esplanade. Given the sales stalled. After the 2003 presidential elections, original assumption that office buildings would however, the country resumed international predominate, the number of anticipated dwelling negotiations, restructured its external debt, units was to be fewer than 3,000. (Residential use and significantly improved economic conditions. experienced higher demand, however, leading Simultaneously, CAPM was able to resolve litigation to approximately 11,000 dwellings units today.) on some parcels, which it then proceeded to sell, During the third phase (1996–2000), most using the revenues to complete the public works of the public works were built, and project expen- on site. ditures peaked along with land sales. Throughout As the land in Puerto Madero became scarce, this phase, the cost per square meter of construction developers looked to the surrounding downtown did not vary significantly, oscillating from around areas as alternative investment locations. The scale $150 to $300 per square meter up to the end of and complexity of the port redevelopment attracted the decade. (Note: All prices are in U.S. dollars.) investors with closer links to national and interna- By this third phase, the investor profile had evolved tional financial markets. Many developers chose from an initial pioneer group of small and medium to invest downtown instead of in the suburbs. firms that faced high levels of risk (1989–1993) Thus the project succeeded in redirecting market to large firms that invested in proven products. By trends to align with urban policy priorities— 2001, there was little public land left to sell, and a shift that would not have happened without the public corporation had enough liquid assets to state intervention. 4 LINCOLN INSTITUTE OF LAND POLICY • Land Lines • JULY 2013 Project Achievements Diminished Returns Now the project is almost complete, with approxi- Despite the overall success of Puerto Madero, its mately 1.5 million square meters of floor area as social outcomes are considered unsatisfactory by planned. From start to finish, project funds were many observers. Largely to blame was the fast sale derived entirely from land sales and concessions. of big land parcels during the most dynamic sales By 2011, CAPM had sold approximately period, from 1996 to 1999. $257.7 million worth of property and invested Some of these parcels were From start to finish, $113 million in public works, with an overhead of the size of an entire city block about $92 million, including management fees and and are now occupied by tow- project funds were derived other operating expenses. Land prices escalated ers that function in some ways from $150 in the early 1990s to $1,200 per square like vertical gated communi- entirely from land sales meter today, and the project has attracted consid- ties. Furthermore, large, fully and concessions. erable private investment in addition to the state’s equipped firms were needed land transfer. to perform the tremendous The project added four major bodies of volume of construction, which excluded smaller water totaling

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