ECONOMIC FEASIBILITY Of the Western station area in Nijmegen

Authors: Rolf van der Leeuw 1268341Theresa Wu 4033140

Course: AR1U100 R+D STUDIOGroup: 1Tutors: Willem Hermans & Gabriela RendonDate: 22 January 2010

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Index

1. Introduction 41.1 Introduction 41.2 Problem Statement 41.3 Complexity 4

2. Plan definitions 52.1 Visions 52.2 Plan A 52.3 Plan B 6

3. Estimate plan A 73.1 Costs 7

3.1.1 Procurement 73.1.2 Demolition 73.1.3 Land preparation 73.1.4 Building costs 83.1.5 Evaluation building costs 8

3.2 Revenues 83.3 Estimate 9 3.3.1 Estimate 1 9 3.3.2 Evaluation estimate 1 9 3.3.3 Estimate 2 10 3.3.4 Evaluation estimate 2 10

4. Estimate plan B 114.1 Costs 114.2 Revenues 114.3 Estimate 11

5. Conclusion 125.1 Costs & Revenues 125.2 Estimates 12

6. Appendix

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PrefaceThis report is a result of the projectcourse AR1U100 of the Msc 1 Q2 Urbanism at the TU Delft. In this reportwe make a short investigation into the economic feasibility of two design proposals for the regeneration ofthe station area in Nijmegen. The final result is two estimates of the plans that will be compared in the endof the report.

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1 Introduction

1.1 IntroductionThe division of groups within our project group was done according to five different project locations TheCitadel, the node in Lent, the station area, the neighbourhood around the Marialaan and the Industrial areain the west. We decided not to select one of the two designs but to compare the two and draw conclusionfrom that. In the first part of the report we explain the similarities and differences off our vision and actualplans, the second part consists of the exercise as stated in the form and the third part is a conclusion on thecomparison of the two plans. The plan of Rolf van der Leeuw will be referred to as plan A and the plan ofTheresa Wu will be referred to as plan B.

1.2. Problem statementFor both of us there were a number of reasons why we chose this specific area.We both think that this area is the entrance of the city, with the ring road coming in the future, the image ofthis city’s gate should be re-shaped to stand a position for the new ring road also to strengthen theconnection with the city centre.While the east and west area was cut into two pieces by the rail road, without any further planning in thissite, it will break into pieces after the ring road enter. So we both want to use ring road as a connection tolink the east and the west area, to sew up this area and give it a new life.

1.3 ComplexityA big issue with the development of station areas is the complexity of these large scale projects. Theyconcern large inner-city areas with a lot of stakeholders involved with different interests that all need to bekept on the same track. Therefore the plans for these locations take years to develop and the actualrealisation may take another 5 to 20 years depending on the scale of the project. During the construction allthe processes that take place have to be able to continue. Trains have to keep running as usual and thesame goes for buses, trams, cars, etc. This calls for a lot of temporary solutions.

To determine the costs concerning these projects is very difficult. Most of the design solutions are far fromstandard and a lot of different construction costs have to be taken in to account. To make sure we won't loseourselves in this complexity we chose not to include the actual station in the estimate, but to select thewestern part of the development as our plan for this assignment.

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2 Plan definitions

2.1 VisionsAlthough we had the same problem statement and the same goals we wanted to achieve within the stationarea we used totally different strategies to reach these goals. The most important difference is the route thatthe ring road follows from the Keizerkarelplein to the Marialaan. In plan A the existing route of thenassaulaan tunnelweg Marialaan is maintained and in plan B a new connection is made by extending the VanSchaik Mathonsingel through a new tunnel to the Marialaan. This essential difference has given us a totaldifferent starting point for our visions. In plan A the existing tunnel is widened and shortened in order toimprove the connection between East and West and in plan B the existing tunnel is transformed to ashopping galery that acts as a connector.

2.2 Plan AThe project area that I used to make the estimate is indicated with a red line in the map below. This used tobe a poorly developed area with incoherent public space. The only development consisted out of 2 officesfrom the 70's and the park and ride for the station. The area is cut up in two peace's by the ring road(Tunnelweg), the northern part and the southern part.

In the southern part there is located a small commercial centre for the surrounding neighbourhood withsmall shops. This centre is located on the first level above the centre there are some apartments. Next tothe centre in the east is the bus platform that is also taken into account for this estimate.

In the northern part of the project area there is a mixture of different functions. The shops, offices andcultural functions are located next to the ring road where as the housing is located more towards the north.In the table next to the map the precise floorspace for every block is shown.

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Fig. 2.1 Plan A with floorspace table

Fig. 2.2 Plan B with floorspace table

2.3 Plan BFrom the figure1 above you can see that it is the project for the station area, by the new planning toarrange the connection between the new ring road and the station. The rail road already cut this area intotwo pieces, some planning must be done to avoid the insert of the ring road become a threat for the stationarea.

In this assignment I selected the west area into account, I planed to insert some culture and art facilitiesinto this area (figure 2), trying to link it up with some others culture facilities on the roundabout in the frontstation area. To create a culture and art facilities belt at the southern part of the city. There will be nine new projects in this area, the hotel will be the only project in the south part of thesite,which will be operate by the private company, but the government will own the property and the land tohold the power of developing this area. The government can hold the power for developing this area withoutreally dealing with it, but on the other hand they have to pay the high cost for the land and the propertyfirst.

The rest projects will be managed and operated by the housing association, because the prize for owningthe land and the property is too high for the government to afford. So it will be easier to let the housingassociation to hold the property of the project. When negotiations with these residents who live on the site, it is important to communicate with them aboutthe future plan for this area, and make it clear that they can change their housing to the new dwelling at thefront station area, housing association may exchange some benefits with the commissioner of that dwelling

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building to give some benefits for the resident, make it easier for them to move from their original housing.So the housing association can get the land back and the develop the project with the government. Since the government already organized and developed the station area, change the original tunnel into theshopping street that can link to the west area, also insert the platform and the plaza that link to the frontstation area. The housing associates should be willing to work with the government not only to make the benefits for theland itself also to greatly improve the living environment for the whole residential area, which they will geteven more benefits from it.

3 Estimate Plan A

3.1 CostsIn this part I will explain something about the costs that are included for this project. The costs as stated inthe assignment date from 2004. Therefore a corrected the prices with the annual inflation of 2,6% for sixyears. Both the 2004 price and the current price are listed in the costs table (fig. 3.1).

3.1.1 ProcurementI divided the costs of procurement in the land costs and the property costs. The only land that needs to beprocured is the strip next to the railway that is currently owned by Prorail. For the procurement of property Iused current market prices that I derived from www.funda.nl. The price of the Oude Heselaan is based onhouses in the direct neighbourhood. The prices per square meter for the offices are also based on prices ofoffices in Nijmegen. Because the prices varied very much per object I made an assumption of 1000Euro/m2.

3.1.2 DemolitionThe costs for demolish ion are based on the prices stated in the assignment form. The prices for thedemolition of buildings are calculated per square meter footprint. Per two storeys the costs are 160 Euro's.For the demolition of the tunnelweg I only used the price for removing the asphalt, the foundation can bereused for the new road.

3.1.3 Land preparationThe land preparation costs include the costs for preparing the land for building, making a new surface andthe construction of new sewerage systems and water drains The quantity of 1M for the sewerage system isderived form an example of a estimate of the municipality of Zwolle. I took the number of 1M as apercentage of the total project area surface.

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Fig3.1 Costs Plan A

There is a possibility that the area around the railway tracks is polluted, this is often the case with stationareas due to the fact that they used to be industrial areas when they were constructed. If so there should beextra costs reserved for cleaning the soil before developing it.

3.1.4 Building costsThe building costs include all the costs to develop the public space of the project area. These costs form arough estimate of the total costs.

As mentioned in the introduction there are often extra costs for the construction of temporary functions.Such as a temporary bus station, station, bicycle parking, park and ride etc. The station is not included inthe estimate but it is possible that temporary solution will be situated in the area. There should be areservation for temporary costs.

3.1.5 evaluation of the costsThe table in fig. 3.1 is very useful to get an understanding of which costs have the greatest influence on thetotal costs. The two things that really increase the costs are the procurement of the existing property andthe building costs for parking.

3.2 Revenues

Fig 4.1 shows the different revenues of the project. The determine the revenues I took the average of thelow and high price. The station area is located very close to the city centre and can therefore attract higherprices per square meter. But the presence of the railway also can cause pressure on the prises. That's way Itook the average of the two but when the balance in the estimate turns out to be a deficit this is one of thefigures that can be played with. For the cultural function (I.e. Popstage) I used the prices for catering and shops. Prices for the library arebased of the high prices for offices.

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Fig. 3.2 Revenues Plan A

3.3 Estimate

3.3.1 Estimate 1This estimate shows the results of the costs and revenues. For the costs I used and interest of 4% for anperiod of three years.

3.3.2 evaluation estimate 1This first estimate of the project shows a very large deficit of approximately 16.5 ml Euro's. The main causesfor this are the costs for procuring the property and the construction of parking places Revenues of the newdevelopment are not enough to cover the gap. There are a number of things we can do. Add more programto generate revenues, increase the prices per square meter, or keep the areas that cause the highprocurement costs out and let the area be developed by the current owner. Because the gap between costsand revenues is very large the first two options are less likely to solves this problem. Therefore I will makean adjustment where the area of the UWV building (building 1+2) and the area of the Vissers furniture(Building 5) are not taken in to account.

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Fig. 3.3 Estimate1 Plan A

3.3.3 Estimate 2

3.3.4 Evaluation estimate 2The new estimate shows a better result, a profit of approximately 3 ml Euro's. The excluding of buildingmeant that the costs of procurement, demolishing and parking were taken out of the equation, but also therevenues that those buildings provided. This results in a lower revenue but a positive balance.

A further decrease in costs can be achieved by changing some parking places from garages on the -1 levelto -0,5 level or even parking on surface.

Although this estimate looks like we going to make profit there are a few costs that should be taken intoaccount that are not in the estimate. First the reservation for temporary situations and the pollution of land.The pollution is part of the unforeseen costs that are not part of the estimate. To get the current landownersof UWV and Vissers furniture to develop their property an extra investment has to be made in theimprovement of living environment in order to generate a increase in property value.

The station wasn't taken in to account for this estimate. But the costs of the station will be partially befinanced with the revenues of the western and eastern development. A estimate of 3 ml for the western partmight be to low to be a proper investment for the station. This could however be compensated by theeastern part of the project.

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Fig. 3.4 Estimate2 Plan A

4 Estimate Plan B

4.1Costs

The most of the cost above are the land and the property buying, and also the buildings demolishing for thenew landscape belt’s area and the hotel’s site, the rest are the cost on greenery, sound wall or thepavement.

4. Revenues

There will be a huge amount of money which will be paid by the government. But the government can earnso money back by selling the concession of the hotel to the private company. After this area are developed,there will be huge needs for living in Nijmegen, this hotel sets at the great location, so there will be a lot ofbenefits which the government can get from this project. You can see the revenues above.

4.3 Estimate

There is no profits at the end because the government has to pay a lot of money for the landscape and theplatform that link to the pedestrian path under the rail road, but it does not make any profits at all. But it is the important facilities to brake down the barrier cause by the rail road also to improve the wholeenvironment for this area. After the housing associations completed the whole development of the museumand art area, more and more people will coming into this area, by identify this area and give it a new life toreally change the atmosphere of the whole back station area and link up the connection with the frontstation area.

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5 Conclusion

We have now made two different estimates for the same area with some variations. What can we concludeform these tables? We will make a sort comparison of the two plans in terms of costs revenues and theactual feasibility.

5.1 Costs & RevenuesBoth plans have problems with costs for procurement of the property. The most problems can be aspect withplan B where a lot of residents have to be moved to make room for the new development. Both estimatesdeal with the problem of high procurement costs by letting a private investor or housing cooperation developthe area. This however means that the revenues can not be taken in to account. This solves the problem forplan A because there is enough other program left to cover the costs for the development of the publicspace. Plan B however has only the hotel to cover the costs. This turns out not to be sufficient to cover thecosts to construct the surrounding landscape.

5.2 FeasibilityAlthough the west part isn't making very much profit in our estimates we think that the development of thewest part is crucial to improve the living quality of the western neighbourhood. Because the west is just apart of a bigger project the deficit could be covered by the development in the east part. However thedevelopment around the station should also provide funds to finance the station itself. Maybe we have toconsider intensifying our development in order to make the plans more feasible.

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Appendix

A. Reference cost model Zwolle.

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Naam project: Trapjeswoningen in de wijk Holtenbroek

ALGEMEEN UitlegGemeente: ZwolleContactpersoon: C. WaalewijnProject: Trapjeswoningen in de wijk HoltenbroekOnderwerp subsidie: riolering- en drainagestelselTotaal tekort: € 798.993-Gevraagd subsidiebedrag: 446.530,--Andere dekkingsbronnen: bijdrage corporatie SWZ

VOOR ALLE PROJECTEN UitlegStart bouw: in 2003 gestart met de besprekignen met de bewoners, start bouwrijpmaken1 januari 2007Looptijd: 3 jaarPrijspeil: januari 2006 Prijspeil van de opgevoerde kosten en opbrengsten.Rentekosten: €600.000,=

Indexkosten: neutraal ook verhoging van de opbrengsten.

BTW-kosten: € 1.215.658,= Over de grondexploitatie kosten.

WERKWIJZEEr zijn 5 typen projecten onderscheiden. Graag de format invullen die het meest past bij uw aanvraag (gele vakjes). Indien geen enkele format van toepassing is, dan graag uw toelichting invullen bij punt 6: overige projecten.Indien beschikbaar kunt u ook uw eigen grond- of gebiedsepxloitatie toesturen.Alle kosten en opbrengsten invullen exclusief BTW (tenzij anders is vermeld).De opgegeven eenheid kan eventueel worden aangepast. Ook kunnen regels worden toegevoegd of niet worden gebruikt.

Indien u vragen heeft bij het invullen van dit format kunt u contact opnemen met: ECORYS Vastgoed Rotterdam mevr. S. Nieuwenhuizen 010-4538539 mevr. M. Munnik 010-4538528

Indien het gevraagde subsidiebedrag lager is dan totaal tekort, graag aangeven welke andere dekkingsbronnen er zijn.

Voor maximaal 35% van het gevraagde subsidiebedrag mag gedurende 3 jaar rente- en indexkosten worden opgenomen.Van toepassing bij niet-aftrekbare BTW en bij compensabele BTW.

Saskia.Nieuwenhuizen@ecorys.comMarjan.Munnik@ecorys.com

1. (BREDE) SCHOOL / MAATSCHAPPELIJKE FUNCTIES Aantal Eenheid € / eenheid Totaal ToelichtingGrondkosten grondprijs m2 bvo € - € - De te betalen grondprijs per m2 bvo.

Bouwkosten functie 1: m2 bvo € - € - Graag toelichten wat er gebouwd wordt. functie 2: m2 bvo € - € -

Inrichtingskosten gebouw m2 bvo € - € - buitenruimte m2 bvo € - € -

NCW aantal jaar Exploitatiekosten gebouwonderhoud/ jr m2 bvo € - € -

gebruikslasten/ jr m2 bvo € - € -

Bijzondere/ overige kosten overig post € - € - Graag nader toelichten.

gekapt. waarde rendement Huuropbrengsten Maatsch. Voorzieningen / jr m2 vvo € - € - 0%

Kinderdagverblijf / jr m2 vvo € - € - 0%Scholen / jr m2 vvo € - € - 0%

Overige opbrengsten Bijdrage derden post € - € - Bijdrage van overige partijen, niet zijnde gemeente.Subsidies post € - € -

Totaal tekort (nominaal) € - Totaal tekort (contante waarde) € -

Graag een bedrag per jaar aangeven en hoeveel jaar gerekend wordt.

Graag een bedrag per jaar aangeven en met hoeveel rendement gerekend wordt.

2. PARKEERVOORZIENING Aantal Eenheid € / eenheid Totaal ToelichtingGrondkosten grondprijs m2 bvo € - € - Indien van toepassing

Bouwkosten parkeren maaiveld 367 parkeerplaats € 5.000 € 1.835.000 parkeren half verdiept 22 parkeerplaats € 12.000 parkeren verdiept 30 parkeerplaats € 20.000 € 600.000

Inrichtingskosten buitenruimte m2 bvo € - € - Indien van toepassing

Bijzondere/ overige kosten overig 2 post € 30.000 € 60.000 speelvoorzieningen

Opbrengsten Verkoop pp bij woningen 180 parkeerplaats € 8.500 € 1.530.000 100 parkeerplaats € 2.000 € 200.000 Bij verhuur pp graag de bedrijfswaarde opnemen.

Opbrengst betaald parkeren parkeerplaats € - € - NVT

Overige opbrengsten Bijdrage derden post € - € 745.000 de corporatie neemt de ontwikkeling voor haar rekening.Subsidies post € - € -

Totaal tekort (nominaal) € 20.000-

Verkoop/verhuur pp bij commercieel

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3. INRICHTING OPENBARE RUIMTE Aantal Eenheid € / eenheid Totaal ToelichtingSloopkosten vastgoed m2 bvo € 80 € -

openbare ruimte 11.800 m2 € 5 € 59.000 verharding en groen

Bouwrijp maken grondwerk 14.000 m2 € 5 € 70.000 kabels/ leidingen 3.380 m1 € 370 € 1.250.600 riolering 300 m1 € 600 € 180.000 € 4,1420 drainage 4.400 € 30 € 132.000

Milieukosten divers m2 bvo € - € 45.000 reservering voor grondvervuiling

Woonrijp maken groen 13.500 m2 € 20 € 270.000 verharding 10.500 m2 € 90 € 945.000 water m2 € - € - rest: verlichting, brandkranen etc. post € - € 75.000

(Hoofd)infrastructuur divers post € - € -

Bijkomende kosten overige kosten post € - € 300.000 ontwerp van leidingtrace en begeleiding uitvoering

Planvoorbereidingskosten VAT/ VTA etc. post € - Planontwikkeling post € -

Opbrengsten Bijdrage derden post € - € 2.545.000 de corporatie neemt de ontwikkeling voor haar rekening.Subsidies post € - € -

Totaal tekort (nominaal) € 781.600-

4. GRONDEXPLOITATIE PROJECTEN Aantal Eenheid € / eenheid Totaal ToelichtingVerwerving boekwaarde/ verwervingen 27.900 m2 bvo € 180 € 5.022.000 301 woningen

verplaatsingskosten m2 bvo € - € 2.800.000 bewoners uitverhuizing etc kosten tijdelijk beheer post € - € 100.000 bewoners paticipatie

Sloopkosten sloopkosten 16.560 m2 bvo € 80 € 1.324.800

Bouwrijp maken grondkosten 14.000 m2 € 93 € 1.302.000

Woonrijp maken inrichting openbaar gebied 24.000 m2 € 55 € 1.320.000

Bijkomende kosten overige kosten post € - € -

Planvoorbereiding VAT/ VTA etc. post € - € - Planontwikkeling post € - € 1.121.000

VON-prijs/ bedrijfswaarde

Grondopbrengst wonen Koop appartementen 60 won € 200.000 € 4.600.000 Graag de VON-prijs (incl. btw) aangeven. Koop eengezinswoningen 107 won € 225.000 € 5.500.000 Huurappartementen 160 won € 145.000 € 2.047.407 bedrijfswaarde aangegeven.

Grondopbrengst comm. Winkels m2 vvo € - € - Kantoren m2 vvo € - € -

Grondopbrengst overig Maatschappelijke functies m2 bvo € - € - NVT

Overige opbrengsten Bijdrage derden post € - € 845.000 de corporatie neemt de ontwikkeling voor haar rekening.Subsidies post € - € -

Totaal tekort (nominaal) € 2.607

5. GROND- EN OPSTALEXPLOITATIE PROJECTEN Aantal Eenheid € / eenheid Totaal ToelichtingVerwerving boekwaarde/ verwervingen m2 bvo € - € - Graag toelichten wat er verworven wordt

verplaatsingskosten m2 bvo € - € - Wie/ wat wordt er verplaatst? kosten tijdelijk beheer post € - € - Voor welke periode wordt wat tijdelijk beheerd?

Sloopkosten sloopkosten m2 bvo € - € - Graag omvang (oppervlakte of inhoud) aangeven.

Milieukosten divers post € - € -

Bouwrijp maken grondkosten m2 € - € -

Woonrijp maken inrichting openbaar gebied m2 € - € -

Bouwkosten functie 1 m2 bvo € - € - Graag aangeven om welke functie het gaat.

Onderhoud/ renovatie functie 1 m2 bvo € - € - Graag aangeven om welke functie het gaat.

Kosten parkeren aanleg half verdiepte garage parkeerplaats € - aanleg verdiepte garage parkeerplaats € -

Bijkomende kosten overig post € - € - Graag nader toelichten.

Planvoorbereiding VAT/ VTA etc. post € - € - Indien niet opgenomen bij sloop/brm Planontwikkeling post € - € -

Opbrengst wonen Koop appartementen won € - € - EG type A won € - € - EG type B won € - € - Huurappartementen won € - € -

Opbrengst commercieel Winkels m2 vvo € - € - Kantoren m2 vvo € - € -

Opbrengst overige functies Maatschappelijke functies m2 bvo € - € - Graag aangeven om welke functie het gaat.

Opbrengst parkeren Verkoop parkeerplaatsen parkeerplaats € - € -

Overige opbrengsten Bijdrage derden post € - € - Bijdrage van overige partijen, niet zijnde gemeente.Subsidies post € - € -

Totaal tekort (nominaal) € -

6. OVERIGE PROJECTEN Aantal Eenheid € / eenheid Totaal ToelichtingGraag zelf hier een toelichting opnemen van uw aanvraag:

projectleiding,ontwerp, bestek en tekeningen, directie voering

Graag aangeven welke milieukosten van toepassing zijn (asbest, bodemsanering, geluidsvoorz. etc.)

Indien bouwkosten zijn opgenomen, dan hier verkoopprijzen (ex. btw) of bedrijfswaarde opnemen.

Indien bouwkosten zijn opgenomen, dan hier de verkoop- of bedrijfswaarde opnemen.