Economic evaluation of the urban regeneration process; estimation of the historical and architectural heritage enhancement Presented during the VIVA EAST Thematic Seminar on "Methodology for Urban Planning and Design of Minor Historic Centres Territorial Cultural Systems, Bari, Italy, Oct. 2012

1. Economic evaluation
of urban regeneration process
estimation of historical and architectural heritage
enhancement
Carmelo M. Torre
Polytechnic of Bari, Department of Civil
Engineering and Architecture

2. The Decision Making Context
Relationship
Social Economy
Public External Public
co-funding Promoter
(e.g. EU)
Pluralistic Monocratic
Public Private Private
Partnership Promoter
Financial Economy

3. The Decision Making Context
Methods
Social Economy
Multigroup Multicriterial
Analysis Analysis
Pluralistic Monocratic
Cost Benefit Cash Flow
Analysis Analysis
Financial Economy

4. The Decision Making Context
Market and negotiation
Pluralistic Market – many competitors, many public promoters
Monopolystic Market – One competitor, many public actors
Monopsony Market – many competitors, one public actor
Bilateral Market – one competitor, one public actor

5. COMMUNITY IMPACT EVALUATION
ALIFE

6. COMMUNITY IMPACT EVALUATION
ALIFE
Promoters
G1. Local Government
G2. Public-Private Management
G3. Cultural Association
A - Refurbishment Roman Walls
G4. Entrepreuners
B - Anfi-theater
-
Users
C - Green way
G5. Property
D - Social center
G6. Neighbours
E - Commercial road axis
G7. Touurists
F - Research Center
G8. Potential users G - Refurbishment Historic Gate
G9. Future users

7. COMMUNITY IMPACT EVALUATION
Preferability by NAIADE (Novel Approach of incertain
alternative decision environment

8. COMMUNITY IMPACT EVALUATION
Preferability by NAIADE (Novel Approach of incertain
alternative decision environment)

9. COMMUNITY IMPACT EVALUATION
NAIADE – Distance of Groups according preferability
G1 G2 G3 G4 G5 G6 G7 G8 G9
G1 1,00 0,49 0,55 0,42 0,48 0,68 0,53 0,43 0,42
G2 0,49 1,00 0,43 0,59 0,76 0,51 0,39 0,36 0,35
G3 0,55 0,43 1,00 0,39 0,43 0,57 0,50 0,48 0,48
G4 0,42 0,59 0,39 1,00 0,61 0,42 0,38 0,37 0,34
G5 0,48 0,76 0,43 0,61 1,00 0,49 0,40 0,36 0,35
G6 0,68 0,51 0,57 0,42 0,49 1,00 0,49 0,43 0,42
G7 0,53 0,39 0,50 0,38 0,40 0,49 1,00 0,54 0,57
G8 0,43 0,36 0,48 0,37 0,36 0,43 0,54 1,00 0,60
G9 0,42 0,35 0,48 0,34 0,35 0,42 0,57 0,60 1,00

10. COMMUNITY IMPACT EVALUATION
NAIADE – Conflicts Coalition Dendrograms

11. COMMUNITY IMPACT EVALUATION
NAIADE – Conflicts/Coalition VETO Table
A Restauro Mura
D Centro Sociale
C Strada Parco
F Centro Studi
Commerciale
Criptoportico
G Restauro
Anfiteatro
intervento
Ipotesi di
B Parco-
Romane
E Asse
Coalizioni Similitudine
G5, G2 0,76
G6, G1 0,68
G5, G4, G2 0,62 NO
G9, G8 0,60 NO
G9, G8, G7 0,57 NO NO
G6, G3, G1 0,57 NO NO NO
G9, G8, G7, G6, G3, G1 0,53 NO NO NO NO
G5, G4, G2, G9, G8,
0,51 NO NO NO NO NO NO
G7, G6, G3, G1
G1.Governo locale G2. Soggetto gestore G3. Associazioni culturali
G4. Sistema Economico locale G5. Proprietari G6. Proprietari aree limitrofe
G7. Turisti G8. Utenti potenziali G9. Utenti futuri

12. COMMUNITY IMPACT EVALUATION
NAIADE – Social preferability by pairwise comparison
Anfi Theater vs Social Center
SITUAZIONE TEORICA
X = moderatamente preferibile Y = moderatamente preferibile
Parco- Centro
Anfiteatro Sociale implicherebbe in condizioni di certezza assoluta
Y=X =1 X Y = X <Y = X <<Y = X >Y = X >>Y = 0
1,0000 Per X = Parco Anfiteatro Y = Centro Sociale
0,8000
0,6000
0,4000
0,2000
0,0000
X >> Y X>Y X~Y X == Y X~Y X<Y X << Y SITUAZIONE REALE
X = moderatamente preferibile Y = moderatamente preferibile
implica in condizioni di incertezza
Y=X = 0,85 X Y =0,78 X <Y = X <<Y = X >Y = X >>Y = 0
Per X = Parco Anfiteatro Y = Centro Sociale

13. COMMUNITY IMPACT EVALUATION
NAIADE – Social preferability by pairwise comparison
Anfi Theater vs Refurbishment of Historic Gate
SITUAZIONE TEORICA
Per X = Parco Anfiteatro Y = Cripto Portico
Parco- Restauro
X = moderatamente preferibile Y = Estremamente non preferibile
Anfiteatro Criptoportico
implicherebbe in condizioni di certezza assoluta
Y=X = X Y =X <Y = X <<Y =0 X >Y =1 e X >>Y = 1 
1,0000
0,8000
0,6000
0,4000
SITUAZIONE REALE
0,2000
Per X = Parco Anfiteatro Y = Cripto Portico
0,0000
X >> Y X>Y X~Y X == Y X~Y X<Y X << Y X = moderatamente preferibile Y = Estremamente non preferibile
implica in condizioni di incertezza
Y=X = X <Y = X <<Y =0 X Y = 0,16 X >Y = 0,77 e X >>Y = 0,73 

14. COMMUNITY IMPACT EVALUATION
NAIADE – Social Preference: Entrepreneurship

15. Accessibility by touristic Pathway - Corridor VIII
Egnatia Road vs Durazzo-Skopije vs Thessaloniki-Kipi

16. Social - Qualitative criteria Impacts on Cultural Heritage

17. Social - Qualitative criteria Impacts on Cultural Heritage
Pairwise comparison metrics
Strong preference
µ<<(X,Y)j µ>>(X,Y)j equal to
µ<<=µ>>=0,325
Pairwise comparison metrics
Weak preference
µ<(X,Y)j µ>(X,Y)j
equal to : µ<=µ>=0,60

18. Weak equality
µ≈(X,Y)j equal to:
µ≈=0,30
Strong equality
µ≈(X,Y)j equal to:
µ=0,05

19. Financial Quantitative variable Costs of Management

20. Financial Quantitative variable Costs of Management
652
515 680

21. COMPANY FOR URBAN TRANSFORMATION IN BARI
DELIMITATION OF AREA
Identification of contexts
Del. C.C. 280 of 29/10/2001
SAN GIROLAMO Context of feasibility Study
FIERA
• Nord District
• non homogeneous
STANIC • too wide context
• fragmantation of
properties
• risky revenue

22. FROM VON NEUMANN TO KAHNEMAN
Expected utility: Relative Risk adversion
Probabilistic, Expectation, non
Nash Equilibrium =1 compensative
Nash Equilibrium ≠1
Relative utility ratio
Saaty weightings,

23. SOCIETIES FOR URBAN TRANSFORMATION (STU)
• Urban Renewal
• New multi-functions settlements
Why STU? • Integration of scarce local public fundings
• National Acts 197/1997 and 167/2002
Scopes
“…designing and implementing (therefore mechandising)
interventions of urban transformation to
activate plans’ …”
Administrative Path
• Promotion (By Urban or Metropolitan Municipality)
• Feasybility study and official approval by the City Council
• Creation of the company for the S.T.U. - Agreement with
Private partners
• Acquisition of estate and soil, intervention and mechandising

24. SOCIETIES FOR URBAN TRANSFORMATION (STU)
• Public plan + private Projects
ADVANTAGES • Sharing know-how among enterpreneurs and
public bodies (capacity building)
• Financial Sustainability + social utility
• Legislative pathways (espropriation, public bid and
LIMITATIONS partnership)
RISKS • Multiplicity of partners and interventions
• Persistence of shared objectives in the long run,
between private-public sector
FUNDAMENTALS
• Identifying appropriate contexts and interventions
• Studying the feasibility to overpass the financial
dimension towards “social complex value”(Fusco Girard, 1987)

25. COMPANY FOR URBAN TRANSFORMATION IN BARI
• Shift of Exhibition Area in Stanic and re-use of old
exhibition center as cultural container
SCENARIOS • Expansion of Exhibition Area on the artificial beach
of Marisabella, and new Urban Park in Stanic
• Expansion of Exhibition Area towards the Old
Stadium of Victory

26. CONSENSUS BUILDING AND DECISION MAKING
Application of Institutional Analysis (Munda, 2007)
• Dinamic Scenarios
ADVANTAGES • Assessment of credibility instead of probability
of evolving scenarios
• How much is useful the vision of stakeholder to
Uncertainty weight the future?
Perception of events linked to interactions and reciprocal interference
among actors

27. CONSENSUS BUILDING AND DECISION MAKING
• disaggregation of possible events
OPERATIONAL STAGE • Identification of stakeholders
• Interviews and questionaires
• Decision trees
ALBERO DECISIONALE (T. Bayes)
VARIABILE EVENTO PROBABILITA’
B1 %1
A B2 %2
Bn %n

28. CONSENSUS BUILDING AND DECISION MAKING
Relevance of Expectation Alternative
actors and Scenarios
(Saaty,2005) Foreseeing
• Scelte strategiche
• Appraisal of relevance of actors
• Mix funzionale
• Appraisal of relevance of events
•Double entry matrix
Constant growth
Commercial
Commercial
extension
HOUSIN
Harbour growth
Touristic Mix
G OFFIC riqualification
Exhibitio
ES Business +ICT
n extension
• Decision trees

29. PROPOSALS
• Mix of Function
Starting Point
• Strategic Choices
Revenues
FINANCIAL
Addiction of
SUSTAINABILITY
new project
Touristic
NPV 112 mln. € Harbor
IRR 9% Estimated cost:
80 mln

30. PROPOSALS

31. PROPOSALS
Housing
Urban services
Offices
Commercial
Area
Cultural Cont.
College
Exhibition area
Parks

32. Grazie