Case Studies  The Karolinenviertel Case in Hamburg - St. Pauli

Instruments of urban regeneration

As redevelopment representative STEG has legally stipulated authorisations subject to the Federal German Book of Building Laws (BauGB), like for example the approval or disapproval of sales and the right of decision when it comes to planning and building permissions. One important instrument of the redevelopment procedure is the public funding to carry out redevelopment and modernisation measures. These means are being placed at the owners’ disposal if they commit to certain rental-price-limits after the redevelopment and cede their rights to the city for renting to low income tenants (see above). The experience shows that these sponsorship means are intensely used for the redevelopment of flats. The redevelopment of commercial spaces, however, is being financed mainly privately in order to determine the rents independently without any limits. An investment of public funding for newly built commercial areas comes to fruition in case of replacement of people who are affected by redevelopment or if low-price commercial space is needed for start-ups.

Since STEG administers the city’s trustee-means, STEG is able to translate projects into action very briefly and flexible. As a representative of the city, the company can act quickly. Furthermore, STEG was put into the position to mortgage the city real estate at the banks. This additional margin enables STEG to receive outside capital. With this, STEG is able to put in bank credits for the execution of redevelopment measures and carry out projects without public funding. This possibility, to act more flexible, comprehensive and in short-term, is a big advantage in comparison to other development agencies, for example in Berlin or Copenhagen. By offering publicly owned commercial spaces for rent, especially shops/restaurants, STEG has an additional influence on the branch mix and the commercial structure of the area.

Means of city development funds are being granted for the preparation of redevelopment measures, the execution of regulation and building measures, the reimbursement of redevelopment representative / area management and the realisation of the ‘social-plan’. These federal funds are being distributed annually to the states (Laender like Hamburg) by ratio and make out for one third of the funds at disposal in the area. Two thirds have to be financed by the states (Laender). For the regeneration procedure in the Karolinenviertel approx. 56 millions Euros have been spent until 2001. These means are investment orientated and are compatible with the European structure funds (ESF and ERDF).

At the end of the redevelopment-process the local authority can ask for compensation for the financing of the redevelopment from the private proprietors which corresponds to the rise of value of the property due to the improvement by the redevelopment. This can be waived for example if the expenditure of calculation and inquiry is out of proportions to the possible revenue.

II. Urban regeneration and redevelopment in the Karolinenviertel    2.2. Elements of the regeneration and redevelopment procedure