CB(1)1951/07-08(04) For Discussion 24 June 2008 LEGISLATIVE COUNCIL PANEL ON DEVELOPMENT Progress of Work of the Urban Renewal Authority Purpose This paper reports on the progress of the work of the Urban Renewal Authority (URA) and its work plans. Background 2. URA was established in May 2001 to undertake urban renewal in accordance with the URA Ordinance and the Urban Renewal Strategy (URS). URA adopts a holistic “4R” strategy to regenerate our older urban areas and improve the living environment of the residents therein, i.e. redevelopment of dilapidated buildings, rehabilitation of poorly maintained buildings, revitalisation of socio-economic and environmental fabric of older districts and preservation of buildings with historical and architectural significance. Progress of URA’s Work 3. As at end 2007/08, URA has commenced 35 redevelopment projects and two preservation projects; assisted over 450 buildings (about 36,000 units) under its building rehabilitation programme; carried out revitalization initiatives in various districts; and preserved some 25 historical buildings located within its project areas. A detailed account of URA’s work is given in Part III of URA’s paper at the Annex. Some major events in 2007/08 are highlighted below. Major Events 4. With the commencement of the last three redevelopment projects inherited from the former Land Development Corporation (ex-LDC) in 2007/08, the URA has commenced all the 25 ex-LDC projects, an important milestone in URA’s redevelopment mission. 5. 2007/08 also marked a major step forward in the area of revitalisation. Following the Chief Executive’s initiative in his 2007-08 Policy Address, the URA has supported the Development Bureau to adopt district-based approach to revitalise the older parts of Wan Chai. Following consultation with the Wan Chai District Council (WCDC) in January 2008, an Old Wan Chai Revitalisation Special Committee chaired by the Deputy Chairman of the WCDC has been set up to map out the overall plan for revitalising old Wan Chai. The Special Committee comprises members of WCDC, representatives of the Development Bureau and the URA, and people from various academic, arts and cultural fields. Initiatives considered by the Special Committee include beautification of the open-air bazaars at Tai Yuen Street/Cross Street and Gresson Street and a heritage trail. The Special Committee has decided to set up a webpage on the Committee work to enhance its transparency and to invite views on the beautification of the two open-air bazaars in old Wan Chai. 6. On the preservation front, the URA has made considerable efforts to meet rising community aspirations. A case in point is the effort of the Development Bureau, the URA and the relevant private developer to preserve the core elements of the Wan Chai Market, a grade III historical building. Working within the legal and contractual obligations, the URA has sought the private developer’s agreement to preserve the major character defining elements of the Market building which would have been demolished under the original plan. Another example is the Nga Tsin Wai Village project. The URA has decided to extend its conservation plan for the Nga Tsin Wai Village project beyond the three relics proposed earlier by the villagers and the Wong Tai Sin District Council. The central axis of the Village with eight authentic village houses in its path, as well as the overall pattern of pedestrian lanes will now be preserved as the core of the Village. The above efforts are generally supported by the relevant District Councils and the Antiquities Advisory Board. 7. Further, in response to the Chief Executive’s 2007-08 Policy Address, the URA is working on a strategy to preserve up to 48 pre-war shophouses of Cantonese verandah-type through various means, including compulsory purchase, voluntary acquisition and other types of assistance. URA’s Work Plans 8. The Financial Secretary approved the URA’s Corporate Plan (CP) for 2008/09 – 2012/13 and 2008/09 Business Plan (BP) in February 2008. The five-year CP comprises 23 new redevelopment projects and 1 new preservation project; a rehabilitation programme covering about 1,000 old buildings; and revitalization initiatives within URA’s Action Areas which are integrated with the redevelopment projects and rehabilitation programme. Besides, the URA will continue to take forward on-going redevelopment projects. 2 9. In 2008/09 BP, the URA plans to commence three redevelopment projects and one preservation project; carry out rehabilitation efforts covering around 200 buildings; and revitalization initiatives in Action Areas to create a synergy effect with on-going or planned redevelopment projects. 10. Details of URA’s work plans are set out in Part IV of URA’s paper at the Annex. 11. We consider it appropriate for the URA to commence a relatively small number of projects in 2008/09 given that it is a year of consolidation for the URA after the commencement of all ex-LDC projects. Some of the on-going projects are very complex, including the massive Kwun Tong Town Centre project, which URA has targeted to make acquisition offers by end 2008 to meet affected residents’ aspirations. The URA will also press ahead with new district-based revitalization and preservation initiatives, and devote a lot of attention and resources to the URS review which we intend to launch in July 2008. Details of the URS review are covered in a separate LegCo Panel paper. Financial Position 12. The URA’s net assets stood at $14.4 billion as at 31 March 2008. Notwithstanding the present healthy financial situation, the URA has indicated that it will be increasingly difficult to balance its books due to the increased commitments in preservation, revitalisation and rehabilitation, which are generally non-profit making. The financial risks associated with redevelopment is also greater than before in the light of increasing acquisition costs and the exceedingly large outlay required for the implementation of the Kwun Tong Town Centre project. URA’s report on the financial position is given in Part V of its paper at the Annex. The Government will continue to closely monitor URA’s financial position. Development Bureau June 2008 3 Annex Work of the Urban Renewal Authority in 2007/08 And Business Plan for 2008/09 I. INTRODUCTION This paper is a report on the work of the Urban Renewal Authority (URA) for the year ended 31 March 2008 and its business plan for 2008/09. II. BACKGROUND 2. In 2007/08 which was its sixth full year of operation, the URA continued to work within the parameters prescribed in Government’s current Urban Renewal Strategy (URS). The URA has further developed its 4Rs strategy, which encompasses redevelopment, preservation, rehabilitation and revitalization, and has pressed ahead with planning the implementation of new preservation and revitalization initiatives in response to the Chief Executive’s 2007/08 Policy Address. The strategic partnership between the URA and Hong Kong Housing Society (HKHS) has continued to bear fruit. III. WORK OF THE URA IN 2007/08 Redevelopment Projects 1 April 2007 to 31 March 2008 3. The URA commenced implementation of six new redevelopment projects in Central, Wong Tai Sin, Mong Kok, Ma Tau Kok, To Kwa Wan, and Tai Kok Tsui in 2007/08. Of these, the first three were the remaining three uncommenced projects out of the 25 such projects inherited from the Land Development Corporation, while the second three comprise two new development projects and one new development scheme, all of which are being processed under the Urban Renewal Authority Ordinance (URAO). These projects are at various stages of planning. Overall, it is estimated that about 760 property interests are involved and about 940 households, comprising some 2,250 people, are affected by them. Page 1 of 13 4. During the past year, the URA has continued with the work of property acquisition, clearance and re-housing for eight of the redevelopment projects launched in its first five years from 2001/02 to 2007/08. A further three commenced redevelopment projects are currently at the planning stage. Resumptions were approved for four projects during 2007/08. Clearance of one site was completed. Over 70 households have accepted re-housing in estates of the Hong Kong Housing Authority (HKHA) and HKHS. In addition, over 170 households accepted cash compensation. Work on re-housing or compensating the remaining households affected by URA’s projects is continuing. 5. The URA conducted tender exercises and an appointed joint venture partner for the site at Pine Street/Anchor Street in Tai Kok Tsui during 2007/08. In May 2008, the URA awarded the joint venture development tender for Baker Court in Hung Hom. Having entered into a joint venture agreement with the Hong Kong Playground Association for the redevelopment of the Macpherson Indoor Stadium in Mong Kok in March 2006, the URA and HKPA awarded the joint venture development contract for this project in June 2008. The URA may invite further expressions of interest and call for further tenders for other projects as the year progresses. May 2001 to 31 March 2008 Projects Launched Directly by URA 6. The tentative timings of the completions of the development stages of the 29 projects launched directly by URA from its establishment up until 31 March 2008, including the six launched in 2007/08, varies between 2008 and 2020. Based on current plans, they are expected to provide an estimated total of almost 9,400 new domestic units and 332,300m² of commercial space upon completion. For the benefit of residents and local communities, these projects are also expected to provide about 30,000m² of Government/Institution/Community (GIC) facilities, 17,800m² for other uses such as transport facilities and space for cultural and creative industries and 19,800m² of open space.