Financing Urban Waterfront Redevelopment

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Abstract
Urban waterfront redevelopment cannot be justified as a straightforward real estate investment, judging by this study of prominent projects in New York, London, Boston, and Toronto. Huge capital costs for land acquisition, site clearance and infrastructure are incurred years before significant private investment begins. The four projects needed substantial government subsidies to get started—although a sophisticated redevelopment agency could minimize the cash contributions required from its sponsor. Attracting private developers was critical to the survival of the redevelopment authorities. Private investment was dominated by the swings in the local property market; a skilled agency could ride the cycles and smooth out the effects of booms and busts. Agencies that inflated their plans during a boom often triggered public concerns about overdevelopment of the waterfront and thus increased regulatory hurdles that caused them to miss the market opportunity altogether.

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