Governance challenges of branded urbanism

This post was written by Tuna Tasan-Kok.

With the decline of welfarist policies that once facilitated significant state involvement in urban development, local governments now bear the responsibility of managing urban services independently. This shift has been accompanied by the decentralization and privatization of public services, and a growing infiltration of the financial sector in urban development, known as “financialization.” This trend has allowed for increased private sector investments, particularly from the property industry, which actively deploys private funds to provide services in cities through various channels and methods. This transformation has been reinforced by the prevalence of the neoliberal political-economic ideology, which has altered perceptions of roles and responsibilities, leading to the delegation of public service delivery to private resources.

The last few decades have witnessed a rise in public-private partnerships for developing and investing in large-scale urban development projects. This has been followed by trends treating urban services such as housing as financial assets or funding public spaces through private means. A new emerging trend in this direction is branding urban development through influential company funds, enabling the development of areas while allowing these companies to attach their brands to urban development projects.

Branded urbanism refers to the investments and developments made by companies within cities and urban areas, where they prominently feature their own consumer brands. Originally, it began as fragmented private sector investments in project development areas aimed at enhancing public services by using pseudo-public spaces or privately owned public spaces. However, the trend has now evolved to prominently showcase consumer brands in the development of urban areas.

Instances of branded urbanism are popping up everywhere. For example, Red Bull invested in community spaces in Ho Chi Minh City, China, with illuminated billboards that open up dark recreational spaces for night-time use. Toyota has created an entire city where products are tested on real people who live there full-time. McDonald’s built beehives in Sweden, while Nike upgrades run-down parks in Moscow and creates basketball courts in Paris. Mercedes-Benz (Photo 1) developed a cultural arena and brands the entire new development around it in Berlin, and ABN AMRO Bank funded and maintains an elevated urban park in Amsterdam. For more cases and information on branded urbanism, you can check out the links provided at https://www.jcdecaux.com/blog/brand-urbanismr-new-role-brands-city and https://popupcity.net/trends/brand-urbanism/. There are examples everywhere of any kind of consumer product.

Branded urban development creates new forms of interdependencies between market actors, public agencies, and urban communities. One of the most important challenges of this form of development is market dependency. Like with any other form of private sector involvement in urban development processes, it creates risks link to economic crises, uncertainties if a firm has economic problems or decides to leave the project. In a classic public park developed through public planning processes on public land the municipal agencies are continuously involved, protect, and maintain the area. When a private firm finances, brands, or contributes to the development of a public space, the continuity of maintenance and services on this area is dependent on the market conditions, financing company’s ability, and willingness to stay in this area.

Moreover, there is always a risk limited public access, space or function as a recent study on the privately owned public spaces (POPs) in New York illustrated. According to this study conducted by professor Jerold S. Kayden of Harvard University, the New York City Planning Department, and the Municipal Art Society, around 50% of POPS in the city suffer from poor design and maintenance, discouraging public usage. A very interesting case of such unexpected consequences of market dependency for the public interest is from Amsterdam’s CIRCL (Photo 2), which was built as a pseudo public space by ABN AMRO Bank based on circular economy and sustainability principles as part of the prestigious and mega Zuidas development project.

The Zuidas project aimed to create the new financial center of Amsterdam with collaboration of major Dutch and international companies. Main banks like ABN AMRO and ING Bank moved their headquarters in the area, along with many other financial services and businesses, and later on, both banks also decided to move out of the area following the 2009 global financial crises as they down-sized operations. The CIRCL was created by ABN AMRO to provide an elevated public space in the Zuidas area with small but nicely maintained green space and some commercial and community facilities.  Following the decision to move headquarters to Amsterdam South East, they also decided to permanently leave the now sold CIRCL pavilion as of 1 July 2023. This means that ABN AMRO’s activities in CIRCL, including use of conference rooms too. The future of the CIRCL and its pseudo public space, will be defined by the new owner, Victory Group in the future.

The primary governance challenge of branded spaces appears to be the maintenance of consistent and continuous public services within such areas. Additionally, the public functions are often confined to the project area, which may limit the overall benefit of the social values generated by these projects for neighboring regions and the entire city. Despite the excitement surrounding these forms of urban developments, as exemplified by Mercedes Benz Platz (Photo 3) in Berlin, the duration and conditions under which this type of urban development fosters social value creation in cities remain uncertain. Consequently, the role of the public sector becomes vital in defining the extent of wider public interest.

To sum up, several governance challenges can be foreseen for branded urban development:

• Consistency and continuity;
• Balancing the interests of the private sector with the broader public interest;
• Lack of transparency and limited involvement of urban communities;
• Exclusivity and commodification of public uses;
• Standardization of aesthetic or design, replacing local identity with a homogenized look and feel;
• Uncertainty and long-term viability;
• Dependency on brand reputation;
• Limited spillover benefits to the surrounding neighborhoods or the broader city;
• Regulatory and zoning issues: in integrating branded developments into existing urban fabric;
• Complexities created by use of public resources and incentives to support branded urbanism projects

To effectively address these governance challenges, careful planning, collaboration between public and private sectors, meaningful public engagement, and a focus on creating inclusive and sustainable urban environments are essential. However, the true challenge for the public sector lies in harnessing the potential of these entrepreneurial urban development innovations for the greater public interest.