EUKN - European Urban Knowledge Network - Public private partnership and restructuring

Public private partnership and restructuring - Leeuwarden, the Netherlands

Introduction

The municipality of Leeuwarden has entered into a public private partnership. The aim is to realise at least 750 dwellings in the city centre before 2015.

Problem

The construction of dwellings in Leeuwarden is stagnating. In restructuring areas and city-centre locations, residential housing projects are mostly unprofitable and are therefore difficult to initiate.

Description

The municipality has entered into a partnership with Consortium Noord BV. This consortium comprises four construction companies and an umbrella housing corporation. As a result of the partnership, a private company with limited liability (BV) in which the municipality of Leeuwarden is a 40% participant, was established. Decision-making in the BV takes place on the basis of unanimity. Agreements are reached within the BV on clusters of projects, called tranches, to be realised.
The returns from profitable projects are used to compensate for losses on other projects. 3 Plus BV does not have to pay tax on the positive returns. This has been agreed with the Tax Inspector.

Approach

A central tenet of the agreement is the basic calculation model. With this, parties can calculate the costs and returns of possible projects in order to determine the project’s results.

3 Plus BV co-ordinates and manages the agreed projects and does not execute any of them. In practice, the projects are carried out by the participating construction companies.

Results

20% of the dwellings to be constructed must consist of social rental dwellings.
Five projects are envisioned in the first tranche, with a total of 186 dwellings. Of these, 40 are rental accommodation. The first two projects are under development.
Agreements have been made about the second tranche of projects with a total of 224 dwellings, of which 69 are rental accommodation.
In the first tranche, one project will produce a heavy loss. The solution has been sought in funding from the municipal Investment Budget for Urban Renewal and a contribution from the corporation involved.

Moreover, the execution of this project is linked to projects with a positive return. Ultimately, the first tranche of projects will yield a neutral return.

Contact info

City of Leeuwarden
R. Vrancken

Project start date

20/05/2003

Links

City of Leeuwarden

Document type

case

Themes

Urban Policy > Urban environment > Urban renewal

Keywords

Urban restructuring