Externality.

What gets measured gets managed. – Peter Drucker

Conversely, what cannot be measured tends to be ignored. Externalities – benefits or costs created by one party that affects other parties around them – are usually left out of consideration no matter how powerful they are.

Placemaking is the art of capturing externalities. Creating a cool recreational area with free entry in a deprived area that generates zero income but raises house prices by lowering youth crime. Offering a rent-free period for an independent cafe because good coffee and a good meeting place are both crucial elements of a good place. Placemaking is a human art, where tenants are chosen as if they were colleagues (in a way, they are), where place is the focus and money is the byproduct. It is a careful crafting of invisible things: vibes, image, branding.

Sadly, good placemaking is rare because it requires scale: one needs to capture a substantial enough amount of the positive externalities in order to bear the cost of subsidising them. However, scale requires big budgets, big budgets require big companies. and big companies are generally not good at managing things which cannot be measured.

Kings Cross, a £2bn regeneration project, is successful by many measures, but yet feels so much like a missed opportunity. What could it have been if the developers had resisted bringing in established brands in the beginning and let the independents have a chance? What if it had tried harder to retain its urban grunge rather than focused on cleaning it up? What if regeneration had been led by art rather than money — would it have, ironically, become more valuable that way?

Photo from the Argent website

 

 

 

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