Six reasons why Michael Noonan is right to compare Dublin Docklands and Canary Wharf

“The Dublin Docklands area presents a unique opportunity for NAMA and the Irish taxpayer.  It is rare that such large swathes of prime waterfront land in a modern city such as Dublin has remained undeveloped.  It is even rarer that the ownership of such land rests in a State organisation providing the opportunity for truly joined up planning, development and construction of such a large and important area.  NAMA now has the opportunity to bring this area to life and create a Dublin Docklands that will rival the likes of London’s Canary Warf, Boston’s Seaport and Singapore’s Marina Bay.”

 

This is a quote from Michael Noonan in relation to the Docklands Strategic Development Zone, the latest phase in the ill-fated development of the Dublin Docks.

Two things jump out from the Minster for Finance’s statement. Firstly, NAMA, he claims, represents an unprecedented opportunity for ‘truly joined up planning’. Secondly, NAMA is going to reproduce Canary Wharf in Dublin’s Docklands. What the Minister didn’t seem to notice is that there is a contradiction between these two things. Canary Wharf, in the words of leading British Architect Richard Rogers was “a mono-use development, an office ghetto, nobody lives there, no schools, nothing to do after work”. And the whole development went bankrupt.

So, if we’re going to have a public agency plonk a Canary Wharf rip-off in the middle of Dublin, we thought it might be a good idea to look at the famous London development and ask what the lessons from that development are being reproduced in the Dublin Docklands Strategic Development Zone (SDZ).

 

1) Fast-track planning

Canary Wharf kicked off with the establishment of the London Docklands Development Corporation (LDDC) in March 1981. The agency took over planning powers and, crucially, was equipped with ‘fast-track planning’ measures which meant it wouldn’t have to deal with citizens appealing planning permission or other ‘red tape’. The basis of this is that the development was “expedient in the national interest”. This has been reproduced here in Dublin – the Dublin Docklands SDZ equipps Dublin City Council, the lead development agency, with fast track planning powers – they will be able to grant speedy planning permission and there will be no appeals process. Likewise, SDZs are a feature of Irish planning law which can be implemented where a development is of ‘strategic social and economic importance’.

2) Makey-upy demand for office space

You might be thinking that the strategic economic and social importance of a 66ha site in the middle of the city (22ha of which is undeveloped land) relates to the housing crisis. You’d be wrong. The main emphasis is on office space and the reasoning is that there is a demand for ‘Grade A office space’. There are echoes here of Canary Wharf too. The rationale behind that development was that the modernisation of financial institutions in the mid-1980s was leading to acute demand for a new type of office space – large, open-plan offices in particular. And yet, by 1991 vacancy rates were up to 40% in Canary Wharf. Similarly, NAMA have consistently argued that they are responding to demand for ‘Grade A’ office space allegedly sought after by the modern companies – be they tech giants or financial firms. And yet, the evidence for the existence of this demand is never made clear, nor are the current vacancy rates for office space in Dublin which stand at around 20%.

3) Involvement of international financial institutions

In 1987 the Canadian company Olympia and York, which at the time was the largest private landlord in the world, took up the Canary Wharf investment and drew finance from banks all over the world. This was a symptom of the changing world of property development of the 1980s. The deregulation of the financial system, the globalisation of real estate and the decline of manufacturing production all saw financial institutions funnel vast amounts of capital in to urban re-development projects. This process never really came to Ireland, or at least not in the same way. Our own Celtic Tiger was largely built by local property players who borrowed from Irish banks (although they in turn borrowed on international money markets). All that is changing in the Docklands as international institutions push out broke local developers and snap up sites. Some of the major predators which stalk the financial jungle  have arrived in Dublin – Blackstone, Lone Star Capital and Oaktree capital to name a few.

4) Hand outs

Large scale urban developments showcase the best of the entrepreneurial ‘free market’ in that they are based on public subsidies to private profit. When you take into account tax breaks, rates exemptions and infrastructure investment the public subsidy of the canary Wharf Development is estimated to be of £1.3 Billion. In the Docklands, NAMA will be making billions of euro available to lend to finance development and purchase of its assets.

5) Ignoring local communities

Local communities protested the construction of Canary Wharf from the outset because it had nothing to do with their right to housing and the city. Similarly, all of the community groups in the Dublin docklands area have opposed the SDZ. Many of them made formal submissions to An Bord Pleanála criticizing the development, in the main because it failed to recognise the social and economic aspects of planning and focused instead on commercially driven development. Dublin City Council has itself said that the SDZ will fail without ‘widespread civic support’. And yet the opposition of local groups does not seem to be a cause for concern. Planning permission has already gone in for a number of major sites in the docklands, yet there is currently no mechanism of community participation and consultation currently.

6) Then just sit back and watch all your labours result in one of the biggest real estate investment failures ever

Urban development is all about borrowing from financial actors to speculate on land values. When this works it’s great because you can make money by driving up rent and property prices, driving out working class communities and undermining local small businesses that can’t pay your sky-high rents (land values increased five-fold in London’s docklands between 1985 and 1987). When it doesn’t work, as we have seen in Ireland, it’s also great because the public give you more hand outs. Despite the ‘favourable’ planning system, despite rates exemptions, public subsidies and tax incentives, Olympia and York’s Canary Wharf Development went bust in 1992. They owed over £11 Billion. We don’t need to look to London, however, for this particular lesson. We’ve already seen that financialized real estate speculation is crisis-prone. And yet, nobody seems to be asking what will happen five or ten years down the line in the docklands? Will a ‘doct.com’ stock market shock, like that of the early 2000s, result in high vacancy rates in the Docklands and hence failure in economic terms? What will happen if interest rates increase over coming years? These calculations are probably being made somewhere, but despite the fact that this whole stitch up is being underwritten by the public, its ‘commercially sensitive information’ that we will never get to see.

 

Note to readers: A lot the information on Canary Wharf is taken from Merrifield’s  pioneering research, which you can check out here. If you want a fantastic analysis of neoliberal urban development in Dublin, check out this new book put together by Andrew MacLaran and Sinead Kelly.

 

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