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Optimal designs - how to avoid the pitfalls of grand landmark building projects?

The Eiffel Tower, the Sydney Opera House, the London Garden Bridge.

The recent demise of the proposed Garden Bridge across the Thames raises the question of when public support for radical buildings should occur. Unique buildings, by their nature, are hard to evaluate based on experience and their construction can turn out to be unexpectedly expensive. However, they have also resulted in some of the world’s most popular and distinctive buildings – central to many cities’ identity and tourism. What are some of the lessons?

A tale of two bridges and too many museums: Is the location right given the demand?

The Garden Bridge is not the first Thames bridge by a leading British architect/designer to attract bad publicity. The second bridge to the east of its proposed site, Norman Foster and Anthony Caro’s Millennium Bridge, hit the headlines due to an unstable wobble, now fixed.[1] The bridge did however fulfil a visible need as it linked two major attractions, the then newly opened Tate Modern and St Paul’s Cathedral. By contrast, the Garden Bridge was to join a fairly well-connected cultural centre on the South Bank, with the roof of a tube station surrounded by offices on the northern side. While the bridge had a striking design, it was also being proposed in the context of a recognised need for better transport links across the Thames, but much further east in the city and without the context of the millennium to justify it.[2]  This said, people would doubtless have used the bridge (it is in the middle of a large city), but sometimes, interesting buildings get constructed without a ready market. For example, China has undergone a massive expansion in museum capacity; over 3500 museums have been built since 1978. This expansion of museum space has though not always kept pace with the buildings having collections or being in places where people would visit.[3] New attractions can certainly create new demand, but we can be too optimistic about this.

Live for others: Have a benefit beyond direct users

A justification of public support for landmark buildings is that their visual status creates wider benefits for the public (even if they don’t use them), for example through their economic impact on tourism or just the pleasure of looking at them. The Sydney Opera House was massively over budget during its construction (costing 14 times the original estimate). However, since 1973, it has provided Sydney with an iconic building, attracting far more people to the city than have ever seen an opera there. The Eiffel Tower was built for the 1889 world fair. At the time, it was the world’s tallest building and controversial for its effect on the Paris skyline, attracting complaints from major artistic figures.[4] Today, it is hard to imagine the city without it, to say nothing of all the creative works it has appeared in. This status has a very real value, but unlike the tourism the tower generates it does not have a natural financial measure. There are techniques that can be used to estimate the worth of this kind of wider value, such as contingent valuation. While there are challenges to applying it in the case of unbuilt buildings, it is arguable that this kind of analysis of amenity value could be used more in policymaking and assessing schemes in general. For example, a recent study has used these techniques to value the benefits of a proposal to improve the view of Stonehenge by diverting its surrounding road.[5] 

Watch out: Having oversight to address project risks

Radical building projects have a habit of going over-budget. This is concerning if public funding is involved, as cost overruns can take funds from other areas. While the bridge was envisaged as being mostly privately financed, so far, 37 million pounds of public funding had been spent on it without construction having started. It was decided that the project should be pulled, because of concern about the procurement process and escalating costs.[7] Dan Anderson has recently argued that the millennium projects overseen by the now disbanded Millennium Commission had relatively high rates of success due to the oversight it provided.[8]  The commission did not always get it right. For example, it awarded £41million to the Earth Centre, a visitor attraction on the theme of sustainable development, which folded within four years, but across the 76 projects that received more than a million in grants and which had comparable data that Anderson examines, he finds that three-quarters of the projects met or exceeded expectations. Arguably a good result for a comparatively risky portfolio. Greater scrutiny should also ensure that over-optimistic cost or demand estimates are less likely to happen, providing a better basis for making decisions about projects in the first place.

There is a higher risk of sunk costs, so build in flexibility and scope for longevity (aka the Olympics challenge)

Another risk of unique and specialised buildings is that, once complete, the construction costs may not be recoverable as the building is not sellable/useable for other purposes. Two things follow from this, the importance of planning to reduce the chance of this happening and ensuring that, even if costs are sunk, the building has long-term viability afterwards to maximise its potential benefit. There is a striking example of this risk. A massive, specialised, capital investment for a month-long sporting event that is unlikely to return within the lifetime of most people; the Olympics do not make a lot of sense on a narrow view of resource allocation. [9] Ignoring the pleasure a country gets from hosting the games, it is hard to justify such an investment unless the facilities can be reused afterwards. The games have on multiple occasions resulted in large derelict sites with no ongoing benefit. One of the achievements of the London 2012 Games is that many of the games’ buildings were designed to reduce the risk of this happening and are in active use, although in the case of the stadium there have been problems.[10] The Eiffel Tower was originally only intended to stand for 20 years. In 1909 its ownership reverted to the city of Paris and it could have been dismantled. However, as the tower was valuable for scientific and communications purposes, it was retained.[11] The Millennium Dome, built to celebrate the millennium in London, was controversial for the content of the year-long exhibition it hosted and the project’s overall cost. It did though leave the city with a very large covered event space that’s integrated into the transport system, and is on some measures the world’s most visited music venue.

Historic investments: Look after what we already have

Many significant buildings have been the product of less than democratic regimes or questionable practices. The construction of St Peter’s in Rome was partly funded by the selling of indulgences (people paying money for absolution from their sins). This subsequently prohibited activity, contributed to Martin Luther nailing his articles to the door in Wittenberg initiating the Reformation - the financing of St Peter’s appears in the articles.[12] Neuschwanstein in Bavaria, the fairy-tale castle, is celebrated for its beauty and dramatic mountainous setting. However, the resources involved in its construction and some other palaces did not do much for its builder King Ludwig who was declared unfit to rule, and later found dead in mysterious circumstances.[13] The Rumanian dictator Ceausescu, prior to his downfall, built the House of the People in Bucharest, the second largest administrative building in the world, at great financial and human cost.[14] It is now the city’s biggest tourist attraction. Aside from showing the importance of public opinion, another implication is that we appreciate these buildings because they are unique, but partly also because we often did not have to pay for, or experience, the circumstances that created them. While we may be uncomfortable with aspects of their history, the conditions that generated these buildings are unlikely to come again, which enhances their rarity value and is one of the grounds for their preservation. Arguably, some of the money spent on the Earth Centre might have been better invested in the nearby Conisbrough castle, which has of the UK’s finest castle keeps.

Reaching for the sky and the wallet: Do you want it enough and can you afford it?

On one level, it doesn’t matter if something is expensive if you want it enough and can afford it. The year before the Garden Bridge was cancelled Hamburg's over-budget and delayed Elbphilarmonie concert hall was finished (estimated cost €77 million actual cost, €789 million). Opinion polls, when it was clear in 2011 that the building was going to be late and over budget, still showed a majority in favour of the building’s completion, although another poll found a minority thinking it was a good investment.[15] It seems plausible that a factor behind the building’s completion is that Hamburg is a wealthy city. It has one of the highest levels of GDP per capita in the European Union, although even Hamburg balked at the Olympics - in 2015 it decided to withdraw from contention for hosting the 2024 games.[16]

There was initial public support for the Garden Bridge and it was an engaging idea, but the procurement was not well managed and there were other places with a more compelling case for a bridge. This is not though to suggest there should be no support for radical public buildings. It is almost inevitable that such schemes are risky, both in terms of construction costs, final demand and public opinion in the meantime. This should be recognised in terms of greater realism on their costs, long-term demand, management and more sophisticated thinking on their benefits. Neverthless, a world without such buildings would be more homogenous and less interesting. We should dare to dream.

 

 

Acknowledgements: Thanks go to Antonio Lima for his comments on this post

 

 

 


[1]  This is counting Blackfriars road and rail bridges as one.The Londonist (2017), ‘11 interesting facts about the millennium bridge’

[2] Transport for London(2016), ‘Overwhelming support for river crossings in east London to support growth’. Sims, S. and Tedder, M. (2014), ‘Linking London: A new generation of river crossings to revitalise the east Thames’, Centre for London and Farrell, T. (2010), ‘Shaping London’, pp 75-77.

[3] Dezeen (2015), ‘China can’t buy culture with museums’. Guardian (2014), ‘The future of museums in China’.

[4] See the letter from artists protesting at the tower at the bottom of https://www.toureiffel.paris/en/the-monument/history

[5]Highways England (2017),’ A303 Stonehenge Amesbury to Berwick Down Valuing Heritage Impacts (report by Simetrica). See also Bakhshi, H., Dolan, P., Fujiwara, D. and Lawton, R. (2015), ‘Measuring the economic value of cultural institutions’ for an example of these techniques applied in the context of two major cultural institutions, and a further forthcoming report on museums by Nesta and Simetrica.

[7] Greater London Authority (2017), ‘Mayor will not provide Mayoral guarantees for Garden Bridge project Hodge, M. (2017), ‘Independent review of the garden bridge project’, Greater London Authority.

[8] Anderson, D. (2017), ‘Bring back the Millennium Commission’, Architects journal.

[9]  An example of reuse of Olympic stadia for a major sporting event is the stadium built to house the 1936 Olympics in Berlin, which was later used to host the finals of the 2006 World cup.

[10] The main stadium and the swimming pool for example were designed to be reduced in size, and the basketball stadium to be dismantled. The media centre has since been converted into a hub for start-ups. On the stadium see GLA (2017), ‘Independent review of the Olympics stadium’. For a contemporary discussion of the principles that should inform the Olympics legacy see Sivaev, D. (2012), 'A marathon not a sprint', Centre for Cities. For a review of pre-existing evidence base on sporting and cultural investments see 'Evidence Review 3 sports and culture 2014' by the What works centre for local economic growth. 

[11] https://www.toureiffel.paris/en/the-monument/eiffel-tower-and-science

[12] See articles 50, 51 and 86 of Luther’s articles for references to St Peter’s.

[13] Whether the disputed legend that a contributory factor behind the demise of the emperor who built the Taj Mahal was his desire to build an identical mausoleum in black marble for himself on the opposite bank of the river is true or not, that it exists illustrates the point.

[14] The Pentagon being the largest

[15] Frankfurter Allgemeine Zeitung (2017), ‘Freiheitsstatue des Bürgertums?’. See the supportive poll Radio Hamburg (2011), ‘Hamburger wollen die Elbphilharmonie’ and the much less supportive Statista ‘Investitionskosten für den Bau der Elbphilharmonie in Hamburg’.

[16] Eurostat (2015). The per capita GDP of inner London is admittedly higher than that of Hamburg, but the per capita GDP for the more populous outer London is much lower (almost half that of Hamburg).  ‘GDP per capita in the EU in 2013: seven capital regions among the ten most prosperous’

Author

John Davies

John Davies

John Davies

Economic Research Fellow, Creative and Digital Economy

John is a research fellow focusing on the digital and creative economy. He is interested in the interface of economics, digital technology and data.

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