BOTSHABELOTOWARD GREATER SELF-DEPENDENCE

PRESENTED BY:DIANE ABRAHAMS

GM: ECONOMIC DEVELOPMENTMANGAUNG LOCAL MUNICIPALITY

SOUTH AFRICA

PREPARED BY:DERRICK LANARDO WOODY

COORDINATOR – GREAT STREETS INITIATIVEGOVERNMENT OF THE DISTRICT OF COLUMBIA

WASHINGTON, DC, USA

April 2006

N8 DEVELOPMENT CORRIDOR

APPROXIMATELY 50 KM BOTSHABELO

BLOEMFONTEIN

N8 DEVELOPMENT CORRIDOR

• A development spine stretching from Bloemfontein CBD through Botshabelo to Thaba Nchu

• Activity nodes identified along the corridor

• Aim is to upgrade infrastructure and intensify economic activities along the N8

• Botshabelo Industrial area one of the priority nodes along the corridor

• Focus for the ICMA consultant was on planning for the Botshabelo Industrial area in the broader context of the N8 Corridor

N8 DEVELOPMENT CORRIDOR PARTNERSHIP• Partners Involved

N8 Corridor Steering Committee:

Development Bank of Southern Africa (DBSA)South African National Roads Agency (SANRAL)Airports Company South Africa (ACSA)Interstate Buslines (IBL)Private DevelopersFinancial InstitutionTransnetBloemfontein Chamber of Commerce & Industry Government officials from:

Mangaung Local MunicipalityMotheo District Municipality Free State Provincial Government

DBSA and MLM are co-funding this plan.

BOTSHABELO INDUSTRIAL AREA

• Botshabelo means “A Place of Refugee”

• Settled in 1978 after non-Tswana speaking were

forcefully removed by the Bophuthatswana Government

• Located 50 km east from the Bloemfontein CBD along

the N8 Corridor - which links the Municipality to Lesotho

• Population estimate ± 180,000

• Reportedly the largest township in the Free State

• Continues to grow in population, land area, public

infrastructure needs and need for jobs

ABOUT BOTSHABELO (2)

• Large under-utilised industrial complex in Botshabelo• Factories owned by the Free State Development

Corporation (FDC)• Botshabelo industrial complex contains 150 factories which

employ more than 12,000 in textile, plastics and other forms of manufacturing

• Most residents are employed in Bloemfontein and commute daily via bus or taxi

• Large portion of Botshabelo residents are employed in the informal economy

• Contains significant unused or underused public owned land in Botshabelo and along the N8 Corridor

ACTION PLAN

• PROBLEM STATEMENT:

Botshabelo unemployment is high and the area’s housing supply, public facilities and infrastructure (i.e. roads, sewage and water removal, open spaces and recreation facilities, schools, libraries, police substation facilities, etc.) are in poor condition and act as a deterrent to private investment which would assist assist residents in becoming more self-dependent.

• GOAL:

To leverage improvements and economic growth for the Botshabelo area (in the context of overall N8 Corridor planning) using innovative public+private tools to create jobs, public infrastructure improvements and new and rehabilitated housing and retail opportunities.

PROPOSED TOOLS (1)

1. ESTABLISHING A COMPELLING VISION

• What is the “BIG IDEA” for redevelopment along the N8 Corridor?

• Structure the vision – As an asset and market-based tool; – Guide for private investors in which strategic public

actions are clearly outlined and then successfully implemented

– Private investment opportunities are amplified and dissected

PROPOSED TOOLS (1)

• Make traditional economic analysis more proactively oriented towards realizing private investment sooner by asking:

At what zoning allowances and minimal public infrastructure investments will private investors find opportunities sooner and at which zoning allowances might the private sector be willing to fund and construct infrastructure improvements?

• Implement all public sector recommendations after plan approved by the Councillors, especially zoning

• Market the plan! Be realistic about results.

TOOLS (2)

2. LEVERAGING A GOVERNMENT ACTION

• Zoning … Zoning … Zoning!!!

… perceived as confusing and complicating bureaucracy, but… conveys private and public property value,… determines what can and can not be done and other conditions, … is controlled entirely by the Municipality, … is a grossly underutilized yet powerful tool and incentive, and … can leverage public benefits when very carefully structured.

• These benefits can flow to Botshabelo and help to bring about improvements and opportunities.

TOOLS (2) cont…• Planned Unit Development (PUD)

N8 Corridor rezoning to provide an incentive for private developers to seek significant return on their investments by applying for PUD approval from the Municipality.

In exchange for bonus density, the Municipality asks for a reasonable combination of:

Employment & training opportunities for targeted populations;

Affordable housing funding & production;

Social services/public facilities maintenance or upgrades;

Preservation & maintenance of open space;

Transportation & infrastructure improvements or resources; and

Non-negotiable, superior project outcomes in urban design, architecture, landscaping; site planning & efficient land usage; environmental benefits; and effective & safe pedestrian & vehicular access.

TOOLS (2) cont..• Land Disposal

Roughly 1/3 of the land abutting the N8 Corridor is under public control.

Disposal of that public land should result in the highest project outcomes to set the example for development of all other property which is to be developed on the N8 Corridor and in Botshabelo.

Disposal should also trigger required compliance with production of public benefits such as employment & training opportunities for targeted populations; affordable housing funding & production; and transportation & infrastructure improvements.

TOOLS (3)

3. PROCUREMENT & OTHER ACTIONS• Develop a Mangaung First Source Hiring Agreement which will be

agreed to and strictly adhered to by anyone requesting public financial assistance, zoning allowances, land disposition, construction or contracts equaling a minimum amount or more. The developer must hire local and/or targeted residents at a minimum percent of jobs created by the public action and planned private development.

• Establish a citywide Housing Production Trust Fund (HPTF) which receives continual revenues from a dedicated funding source(s), such as taxes, fees, or loan repayments to the Municipality particularly from real estate transactions. Use revenues generated to fund competitive rehabilitation of existing residential structures in Botshabelo and construction of moderate to higher income (note that use was not necessarily “high income”) housing. Require employment of targeted residents for 35 to 50% of all construction jobs.

TOOLS (4)

4. LINKING PRIVATE INVESTMENTS TO BOTSHABELO NEEDS

• Use existing Restructuring Grant to develop a Botshabelo industrial sector attraction, retention and expansion strategy (within broader N8 plan) and a Botshabelo Phased Public Facilities & Infrastructure Improvement Strategy and require private funding and construction of the Strategy when N8 public owned land disposed; require training & employment of Botshabelo residents

• Leverage bonus zoning requests citywide through a Planned Unit Development process which requires developers to provide public benefits (payments into an affordable housing pool, construction of public facilities & infrastructure in less advantaged areas, etc.) in exchange for the added value to their property and target improvements to places including and like Botshabelo

IMPLEMENTATION VEHICLE• Public and private actions to develop the N8 Corridor over the 50km

between the CBD and Botshabelo will require extensive coordination at many different levels, akin to private sector timelines and over several decades.

• Evolve the Steering Committee into an full-fledge quasi-public N8 Corridor Redevelopment Authority (N8-CRA) – with a Board of Directors to act across Mayoral terms, municipal

and national agencies and– as a private sector development agent in the acquisition,

disposition, development and oversight of N8 Corridor actions and investments which should lead to economic growth, investment attraction, job creation, infrastructure development, public facilities and open space planning and development, design review, development financing, local business development, etc.

NEXT STEPS FOR MANGAUNG

• Integrate ICMA recommendations and tools into final N8

Corridor Planning & Implementation Framework

• Internal discussions around establishment of

development agency for implementation of specific EDS

projects

• Marketing and investment brokerage for N8

• Source funding and appropriate budgeting for

infrastructure upgrade along N8 Corridor

THANK YOU