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Saturday, 11 January 2014

Municipalities fail to learn lessons from past mistakes: my city Almere wants to develop large fuel, food and hospitality point at an industrial zone in “the middle of nowhere”

Through my “channels” at Twitter, I received the following news message. My city Almere is planning a new ‘fuel, food/beverage and hospitality point’ at a desolate industrial zone at the south-east side of Almere.

Here are the pertinent snips of this article:

“Tender for fuel sales point Facility Point at Stichtsekant”

At the logistically-aimed industrial zone Stichtsekant in Almere, sufficient potential demand has emerged for a Facilitity Point. The basic elements of this Facility Point will be a fuel sales point (gas station) with a shop and one or more food-and-beverage companies. On top of that, other functions would be welcomed, like a guarded parking zone for trucks and a hotel. The municipality Almere reserves a lot of 11,000 square meters and challenges entrepreneurs and real estate developers to start their enterprise.

Potential customers of this Facility Point are the many car drivers at the A27 highway and the logistical companies at the Stichtsekant industrial zone. The industrial zone is positioned at the A27, where tens of thousands of drivers pass each day.

It is a commercial zone in development, which mainly attracts logistical companies. During the coming decades, this commercial zone will grow to a lively centre of more than 100 hectares in size. Alderman for Economic Development Ben Scholten: “logistics is an industry at which we aim as Almere. It is complementary to the many, active E-commerce companies in our city. We have the location and space for logistical companies and we already host a lot of companies which are very good at logistics. Utilities like this one will reinforce the establishment climate for this beautiful industry”.

Cities and municipalities have a ‘duty’ to offer jobs and business opportunities to their inhabitants.

In other words: when a city wants to have new inhabitants and keep their existing ones, it must build an infrastructure were new companies can be established and existing companies and institutions want to move to.

This leads to the following argumentation: New commercial infrastructure à  [new/existing] companies and institutions à  new jobs à new inhabitants!

By itself, this is a logical and valid argumention: especially in a situation where commercial/industrial zones and commercial activity are scarce, this would be the way to go for communities.

Unfortunately, however, there is NOT much scarcity with respect to commercial/industrial zones in The Netherlands. During the last decades, all the cities and municipalities in The Netherlands had the same idea to develop commercial/industrial zones and establishments for food/beverage and hospitality close to these zones.

In the end these zones and terrains didn’t offer a necessary infrastructure anymore, in order to meet a real and present demand for commercial / industrial space. Instead, these commercial and industrial zones started to cannibalize on each other, in order to divide a pie, that became smaller and smaller.

Large companies profited from this development and chose the commercial / industrial zones where the local taxes, levies, infrastructure and subsidies were the most favorable. Due to the fierce competition between cities and municipalities in The Netherlands, these large companies were often lured to move to those newly built industrial / commercial zones with all kinds of special facilities, at the expense of other (older) industrial zones. The result of these cannibalistic policies was vacancy at many industrial zones: a lot of (often structural) vacancy.

This effect was reinforced by the economic crisis that broke out in 2008. Due to the crisis, there is hardly any additional demand for commercial activities and services at this moment. A tell-tale indicator is the (structural) vacancy of commercial real estate in The Netherlands of 16%. In Almere, this number is even 23.4%.

This brings me to the presented plan, concerning the ‘Facility Point’:

By itself such a venue sounds great, as it could bring new jobs and new business opportunities to a zone with already much present traffic and consequently much potential customers. On top of that, its attraction and the customers it brings could help the present industrial zone to develop further

However, in my opinion things are a little different. Stichtsekant is not a quickly developing industrial zone, but a zone that has led a stable, somewhat comatose existence during the last 5 – 10 years. There are a few logistical companies, but that is about it. During my bikerides in recent years and the many times that I past this zone with my car, I hardly noticed any significant development in it.

On top of that, the zone is positioned at a not very attractive side of Almere. There is hardly any other commercial activity around it and it is far removed from the centre of the city, without a public transport infrastructure being present. Besides that, the cars and truckers that pass the venue, need to leave the highway and drive for one kilometer, in order to get there.

Industrial zone Stichtsekant
Picture courtesy of Google Streetview
Click to enlarge
These circumstances are all serious handicaps for the viability of this Facility Point and for the entrepreneurs that will run it in the future. And there is more.

Not far from this industrial zone – within a 20 km range – there are 3 other gas stations, 3 hotels and a few restaurants – directly at or close to the highway (see the pictures).

Activity close to industrial zone Stichtsekant
Picture courtesy of Google Maps
Click to enlarge
Unfortunately, I am afraid that these circumstances will reduce the viability of this facility point, while I don’t see much chances for growth of the industrial zone Stichtsekant itself in the near future. The painful truth is that there are just too many industrial zones in The Netherlands and too little demand for new industrial / commercial space, due to the crisis.

I do appreciate the attempts of Almere to change the future of this particular industrial zone, but I would prefer when the city was looking harder for new companies and institutions to inhabit this zone in the first place. Although this facility point could be an ‘enabler’ for such companies to come to Stichtsekant, I am afraid that it will not earn a decent income for the fuel, food and hospitality companies that will utilize it, in the meantime.

Therefore this could easily become a repetition of past errors, in which plans with too much ambition and too little reality turn awry for the people who invested in it.

I am sorry, but that is the way that I see it.

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