b'MUDD 24 URBAN NETWORKS|URBAN GATEWAYSsignificant purchase prices, compensation toExample 3: Possible alternatives charge on land sales or redevelopment, or as owners and tenants, and costly demolitions.Value capture is no more than a debating trickmany other mechanisms as imaginative policylike clean coal and vibrant centrein themakers can come up with.To meet their business plan imposed by NSWabsence of two essential elements.Treasury, the NSW entity Sydney Metro hasA real understanding of value capture would been given planning approval by the NSW Attempts to implement a policy oflead to a policy of maximising the increase Department of Planning for the maximumvalue capture must be based on anin property values caused by the new building envelope on the site - 60,000 sqm andunderstanding of the pervasive impactsMetro station, and thus the amount of the 42 storeys high - constrained only by avoidingof every urban investment, and howinvestment recovered. For example, using significant shadows on Brett Whitely Place,that investment gener-ates what wasthe compulsorily acquired Metro site in North Greenwood Plaza and nearby dwelling units. described above as a sea of positiveSydney to reproduce some of the excellent and negative forces on property values. Ifpeople qualities of Tower Square, to add Sydney Metro announced on 21 Decemberthe policy is not informed by a dynamica central public space as a heart for North 2018 that the site had been sold to a developerspatial imagination it cannot begin toSydney on the Miller Street axis (on what for $200 million. This was claimed to be anassess what values can and should bewould be the only level, sheltered, sunny site exercise in value capture, helping to off-set thecaptured. in the city centre) and to include around that $19 billion cost of the Metro project. In fact, it The second precondition forheart some spaces for civic and civil-society appears to be the market value of this largeimplementing a policy of value capturefunctions would have begun the transformation site in a critical location in the North Sydneyis that significant unearned increasesof the CBD into a city centre, and generated city centre. An element in the contract requiresin property values are enjoyed bymeaningful and appropriate increases in the developer to pay more if the valuationidentifiable property owners as the(taxable) property values. of the site increases significantly once theconsequence of the large and positive Metro is operational. This reflects an obviousexternalities generated by a specific in- In other words, if a real value capture policy truth: the site is being sold at less than thevestment.were being implemented, the incentives would value it will have once the significant positivebe very different. It is characteristic of the externalities from the Metro are realised. Interestingly, Canterbury and North Sydneycurious urban dynamic in Sydney that NSW are very different cases in relation to theTreasury should require Sydney Metro to ignore This is actually a property play by a new kindsecond precondition. A new metro stationthe real mechanisms for value capture, and of entity that enjoys the prerogatives of athat connects North Sydney to Crows Nestinstead exploit their North Sydney site through government agency with property-resumptionand a new catchment to the north west, asproperty deals, while imposing significant powers while exercising the commercial inwell as connecting to new locations in thenegative impacts on the entire city centre and confidence protections of a private business.Sydney CBD, will clearly have strong positiveactually supressing the uplift that should Sydney Metro is maximising the return on theimpacts. The same is not true of the Metro inaccompany their investment.compulsorily acquired site, using the StateCanterbury, since a rail service, fully integrated Significant Development process to gaininto Sydneys regional rail system, is being approval for a private office tower. replaced by a single, smaller (if more frequent) While claiming to be capturing value, SydneyMetro line. At peak times, passengers may be Metro is actually imposing significant negativeable to stand in a Metro car every four minutes 21 effects on the rest of the city centre, (1)rather than sit in a train every seven-and-a-half through the demolition of Tower Square and theminutes. What value is there to capture in that?expulsion of a valuable cluster of businesses;In the North Sydney case, where the effects (2) by imposing negative environmental effectson property values can be assessed and that will arise from a commercial tower that willquantified, it would be possible to recover be the largest and tallest in North Sydney: andsome of the uplift directly attributable to the (3) by refusing to allow any of this large sitenew Metro station through a business district to be used either as a public place or for civiclevy of the kind widely used in the US, or the activities. This feels more like value destructiontype of charges being used by the high speed than value capture. rail authority in the UK, or an increment on land tax and/or local rates, or a betterment MUDD 24 - Urban Gateways | Urban NetworksINTRO 8pt.indd 22 26/11/2019 4:11:27 PM'