Shopping centres

= Heart of Europe Stifling Under Concrete Foreword =

Foreword
The Shopping Gallery Harfa opened fall 2010. The Fenix Shopping Gallery opened in 2008. They both lie in a driving distance of approximately 5 minutes from the biggest shopping area in Prague and the Czech Republic - OC Letňany built in 1999. I visited Fenix on the 23rd December and it felt like ghost town. On one of the busiest days of the year! This experience made me wonder, how is it possible, that energy and resources are wasted for redundant chapels of consume. In Czech Republic the so called area standard – square metres of shops per inhabitant – has tripled since 1989 from 0,331[1] to 1,1 in 2009[2]. That means that every citizen in this country has their own square metre for shopping. Compared to Brno for example, which announced a value of 1,78[3], Prague might seem quite empty with its 0,87[4]. The velocity of new shopping centre openings however teases common sense. Prague is fancied for its intimacy and was honoured to become a part of the UNESCO world heritage in 1992 thanks to its historical value. Does the construction boom present a threat for its uniqueness? Sýkora (2006) warns that new investments after 1990 contributed to densification in central city morphology including rapid growth in car traffic and consequent congestion, which turned out to be especially critical in Prague. Furthermore, Sýkora adds, there have been numerous conflicts between investors and the protection of historic buildings and urban landscapes. Another argument in the discussion is environmental sustainability. As the City Development Authority Prague points out, developing commercial areas significantly increase the proportion of built-up land and so decrease opportunities for setting up adequate proportions of greenery. Numerous civic petitions for maintaining parks or other free land in different parts of the city were signed. Rumour has it though that in the Czech Republic, the democratic governance of people is carried out without the people. I will take a closer look at the situation of shopping centre construction in Prague and try to find out, what is happening and whether there is a problem of some kind.

Landscape use
Taken from I.Smolová, Z.Szczyrba (2000): Large commercial centers in the Czech Republic - Landscape and regionally aspects of development. Palacky University Olomouc

The man’s impacts on the landscape are so heterogeneous and many-sided that it is not possible to consider each of them on its own. The intensity of the geographic objects location in the extent of their spectrum in a landscape is best expressed by a so-called gradient of landscape alterations, which begins with a natural landscape without any larger man’s impact and ends with a completely urbanized landscape (Forman et Godron, 1993). On a five-degree scale of landscape types, the urban landscape represents the highest degree of man’s impact (so-called artificialization). From the point of view of a historical development of landscape, towns represent completely different organization and specialization units, whose function is in a correlation, among other things, with the commercial function of seats in a general sense of the word. From the point of view of a recent development of the landscape structure, it is especially the landscape type called a suburban landscape that undergoes a dynamic transformation. It forms a transition zone between the town and a free landscape. This domain is significantly affected by the suburbanization, when an originally agricultural function of the land exploitation is replaced by other functions. It is a transformation of the suburban zone especially by the influence of commercial projects. Besides the construction of supermarkets and large commercial centers, it is also the foundation of industrial and stocking areas and a new construction of living houses. From the point of view of a recent development in the Czech Republic, the suburbanization adds to the existing spatial town structure an additional ring of urban structure (Sýkora, 1999). The socially spatial model of the town gets closer and closer to a polycentric model, based on a principle of the existence of multiple cores in the inner structure of urban landscape, each of them specialized in one of the functions (industry, commerce, housing etc.).

Conditions for development of Prague as a post-communist city
Taken from L.Sýkora (2006): Urban Development, Policy and Planning in the Czech Republic and Prague.I'n 'Altrock, Guntner, Huning and Peters: Spatial Planning and Urban Development in the new EU member states. Ashgate Publishing, UK

The post-1989 urban change in the Czech Republic has been conditioned by government-led reforms aimed at establishment of a capitalist system with market principles. This enabled spontaneous market-led transformations of economic, social and cultural environment. Urban change has been especially led by internationalization and globalization, deindustrialization and growth of producer services and increasing social differentiation. The most dramatic changes occurred in Prague where most of the new investments are concentrated. In the beginnings local and national government favoured unrestricted market development. After a decade tools as strategic planning and EU programming documents helped to apply new urban management for more coordinated and complex urban solutions.

The main patterns of spatial development in cities are commercialization and expansion of city centres and radical transformation of outer cities through commercial and residential suburbanization. Restructuring involved replacement of existing activities with new and economically more efficient uses and took the form of commercialization, gentrification, construction of new condominiums, brownfield regeneration, the establishment of new secondary commercial centres and out-of-centre office clusters. Prague has experienced a strong out-migration towards suburban areas, where the wealthiest Czech population is building new homes – the intensity of housing construction there is three times the national average.

Prague employs less than 15% of its population in manufacturing. This decline has been compensated by an increase in the service sector. Prague plays the role of a prime national centre, logistic hub and a gateway between national and international economy with most foreign direct investment.

Emerging urban problems Decline in areas omitted by investment cause economic, social and physical decline. However growth can have negative effects too – for instance commercialization of the city core implies growth of individual car traffic, damage to historical heritage and decline in population leaving block of central city properties without residential function. Another problem can be suburbanization itself. The compact character of the former socialist city is being changed through rapid commercialization and residential suburbanization that takes a form of an unregulated sprawl. Fragmented and non-contiguous suburbanization has negative social, economic and environmental consequences. For instance suburbanization of retail facilities has completely reshaped the pattern of commuting for shopping. While in the 1990s most retail wa concentrated in central city and in secondary centres within cities, at present a lare share of shopping is realised in suburban hypermarkets ad shopping mall where people travel by car from the inner city, which contributes to traffic congestion. Policies and planning

Sýkora (2006) In the Czech Republic, the responsibility rests primarily with city governments. However the functional urban region, i.e. the area that is tightly linked through commuting for work, services, education and culture, extends the administrative boundary of the core city. In the hinterland of Prague there are 171 independent municipalities. Fragmented metropolitan decision-making lacks coordination. Further more the metropolitan area of Prague is under the government of two regions: Prague itself and Central Bohemia who do not cooperate in the field of common metropolitan development and therefore is left to competition between governments. Municipalities are independent legal and economic entities which take decisions and bear responsibilities on their own behalf. The capital city of Prague as a statutory town divided its municipal territory into 57 boroughs establishing second tier of local governments. These take advantage of gained partial autonomy. Prague prepares two citywide planning documents at the municipal level – The Master Plan and the Strategic Plan. The former is a physical plan that specifies the special arrangement and land use in the medium term perspective, the latter specifies long term priorities of socio-economic development. The Strategic plan declares controlled development and coordinated management and decision-making in order to achieve prosperity, healthy and cultural environment and preservation of values, which make Prague one of the most beautiful cities in the world. It is an agreement between politicians, specialists, corporate sector representatives and citizens. One of the five pillars focuses on Quality of environment: “Prague endeavours to achieve a high quality of both natural and urban development, while observing the principles of sustainability. It wants to substantially reduce pollution in the city and create balance between human settlement and landscape in order to become a clean, healthy and harmonious city. Besides these two documents, Prague worked on policies according to the EU demands and created a Regional Development Strategy which matches the Strategic Plan.

Taken from I.Smolová, Z.Szczyrba (2000): Large commercial centers in the Czech Republic - Landscape and regionally aspects of development. Palacky University Olomouc:

According to the research results, majority of purchasing population got very quickly adapted to new possibilities that are offered by super and hypermarkets and these are more often preferred by them. Small traders whose contributions to town treasuries are not inessential perceive supermarkets as unequal fight and “unfair rivals”. They initiate petitions, call for market protection and its regulation. Unlike those who oppose construction of large markets, majority of both laymen and experts in this field think that “reasonable” construction of super and hypermarkets is necessary for trade competition. However, legal means in the sense of predefined principles on construction of large-scale stores in the area are minimal and towns are dealing with the situation Instead of that, we keep facing the situation that shows us that towns and cities are not able to direct the development. Moreover, they cannot co-ordinate procedures in the decision making processes in the field of territorial planning and thus the non – regulated construction of trade complexes is attributed wider regional aspects. From the perspective of the territorial development concept, development of retail network up to now can be considered as rather accidental than systematic whereas we do not speak of big trade companies but of bodies of public administration that are accountable for harmonisation of territorial development. Independent towns that recently used to be parts of bigger administrative units are nowadays of special issue because they do not communicate and co-operate properly as partners with their “counterparts” in the territorial development program. In lieu, development of retail networks in the Czech Republic becomes rather a product guided by visions of investors and “lobbying” groups in the town halls than the work of logical direction.With regard to lower financial resources of smaller towns and some cities, a potential strong investor is mostly viewed positively. His activities play an important role in improving traffic and technical infrastructure of towns (financial contributions to reconstruct sewerage, roads etc.). Frequent pros include new working opportunities and future tax contribution for the town. Possible negative ramifications concerning the location of shopping facility include primarily the overload of communication network and design of buildings that vary from the built up areas up to now. Experts agree today that non regulated and non co-ordinated development can cause the retail network grow beyond dimensions which would lead to subsequent unbalance of the system and bankruptcy of many, especially retail   salesmen. Merciless rules of market economy apply also to the trade area and therefore it is necessary to retain certain proportions. Who else than villages representing the interests of their population should strive for that. Implementation rules of the amended construction Law no. 50/1976 of the Code are very benevolent as for the interpretation, and thus the accepted solutions are results of a whole array of compromises. Starting with as-a-matter- of-fact arguments by town-planners, geographers, ecologists and other professionals and ending with “pressures” of interest groups that enforce the construction from different reasons. Equally the other relevant laws do not represent a real obstacle for the development of big commercial constructions (over 3000 m2 of the builtup area). It is especially the Law no 334/1992 of the Code about the Protection of the agricultural land and

the Law no 244/1992 of the Code about the assessment of the environmental impact of constructions – a socalled “EIA” (Environmental Impact Assessment). With exception of the construction law, governing the territorial planning, and some other laws, there is no general legislative framework which would clearly define the regulations concerning the construction of big commercial centers in the Czech Republic. Development of the Czech trade is frequently confronted with the development in the new German Federal countries. Their development of retail capacity in the early 90s led to network of stores beyond dimensions with a whole array of negative effects on public facilities of towns such as Leipzig, Dresden and other (“dead” town centres, excessive and unbearable cumulation of stores in a certain location etc.). Similar to many foreign examples, also the development in the former GDR proved that it is not possible not to regulate processes with failed market self-regulation as a result of different conditions of social and economic system. In the EU countries the admissible limits for construction of large units in the region are defined by a law and local as well as regional authorities can veto projects exceeding a certain size. The rules are often very strict (e.g. in Portugal, an approval of the Ministry of Commerce and Tourism is required for a construction of any retail outlet with a total sales area exceeding 2000 m2). The question of keeping the retail network in town centres becomes prior in the territorial development. Almost all new stores are located in urban estate, in some cases as completion of public facilities of big housing estates, many times directly in town centres. Classic department stores are also built.

Taken from the City Development Authority Prague, Planning Analytical Materials, 2008

The lasting pressure on building new shopping centres and office complewex is seen as a threat to the content of a lively metropolitan structure and to the transport network. New European trends turn their attention to mixed compact constructuon with lower capacity facilities. Newly constructed and reconstructed big capacities of retail and offices, such as the newly opened Palladium complex, stress traffic because of parking demands and with their 100% built-up land limitate areas for new parks or greenery for relaxation of local inhabitants and workers. Due to more interest in investment the survival of existing parks in the Prague city centre is endangered as well.

The negative trend is low support of the private sector it fulfilling financially less atractive functions of the city, which includes public facilities, greenery and recreation areas. There also exists a disproportion between customer interest in tradinional dispersed retail network and the new fashion of travelling to big shopping centres in the outskirts of Prague which generates traffic and so causes damage to the environment.

A Problem solvable by the Mater Plan is insufficient coordination of store and logistiv areas in the city surroundings. What is beyond the competences of the plan however is regulation of retail network in favour of smaller units as well as the pressure of economic land use at the expense of urban aspects and environmental protection.

The Planning Analytical materials of 2008 reccomend that no more land is dedicated to big shopping centres except for newly suggested district centres.

Influence of Globalization on Shopping Centres
Taken from J.Temelová (2004): The Reflection of Globalization in non-housing estate in Prague after 1990. In M.Ouředníček: Social Goegraphy of the Prague Region. Charles University in Prague, 2006

The growing connectedness of parts of the world, internationalization and globalization are demonstrated in economic, social and political aspects of functioning of modern cities. The competing ability of city regions is emphasized, architectural styles become more varied, project carrying the symbolic of global success are spreading and so local identities and historical uniqueness are exposed to risk. Following the revolution in 1989, the economic attractiveness of Prague rose. The capital city has been welcoming foreign and international corporations, which want to do business and invest here. Lack of modern office and retail capacities from the socialist era augmented the intensity of commercial non-housing estate construction, which presented and important part of the building development in Prague after 1990. Together with international funds came foreign architects, developers and suppliers, who have played important roles in the current commercial construction. The 1989 transformation opened architectural barriers and enabled diversification and also brought construction to city centres.

Global influences on commercial estate 1. Participation of globally active artist, who create the international image of cities 2. Important role of foreign investors. Reflected even in names of objects (Anděl Bussiness Center, Office Park Nové Butovice…) 3. Similar methods of financing and construction – the groundscraper model (sprawling low-height building or complex with offices and other functions as shops, entertainment, restaurants.). The developer designs the outer look, the client chooses the inner composition. 4. The trend of buildings as symbols. Investing in prestige buildings creates a part of the marketing and image strategy

Homogenous environment and differentiation According to one theory cities in the globalized world are becoming homogenous because of global products and actors, construction of unified suburban shopping centres and residential zones etc. Most of recent projects are realized in the modernistic spirit of uniformity and functionalism. Stores and shopping centres in the peripheries and along motorways serve as best examples. They express rationality and purpose of machines of mass consume and create an atmosphere of a placeless city (Harvey 1989). Moreover the strategy of some companies strictly desires uniformity of their shops – such as fast food chains(KFC) or even retail stores (Lidl). On the other hand different places reply to globalization differently which leads to local variety. Especially those owners, who need to look different, prefer symbolic capital encompassed by luxury. So besides shopping machines in the periphery consumer spectacles orientated towards wealthier customers are emerging in the inner city (e.g. The Dancing House by Frank Gehry). Retail chains present important actors in the realty market as new plot demanders and constructors. Since the mid 90s Prague has experienced construction of big monofunctional objects. Firstly hobby and furniture chains, since 1997 also grocery hypermarkets. Since 2000 shopping centres have reflected the growing importance of entertainment and gastronomy - multifunctional complexes were born.

Localization of shopping centres
Taken from I.Smolová, Z.Szczyrba (2000): Large commercial centers in the Czech Republic - Landscape and regionally aspects of development. Palacky University Olomouc

The most profitable locations for retail trade are edges of Prague and high streets in its centre (but office construction dominates here), availability by transport plays an important role.

For the present and future character of the retail netb development in the Czech Republic, conditioned especially by the expansion of foreign retail chains, it is possible to delimit the degree of their territorial investment activity in the following order (Viturka et al.,1998): 1. Factor of the market proximity 2. Factor of the transportation 3. Factor of the development area offer 4. Factor of the construction lot price ad 1) The market proximity is the most important partial business factor for the case of distribution activities, trying to achieve a central localization within the serviced area. From the point of view of urban-oriented investments, this factor accentuates a long-term inertia of urban structure determining the territorial potentials of the population’s final consumption. ad 2) Transportation infrastructure factor is generally considered to be one of the most important localization factors of the development of new large-space sales outlets, especially with the hypermarkets and regional shopping centers. The evaluation of the investment attraction corresponds with the evaluation of the present and planned road network, especially motorway networks and high-speed four-lane thoroughfares. From the point of view of the convenient position of the selected cities, Prague and Brno have become the most important motorway junctions

ad 3) The offer of development areas is a partial local factor, identifying the potential possibilities of the acceleration of the social-economic development of municipalities and regions. For their plans (i.e. investments on a green field), investors very often require sufficient development areas fulfilling at least minimum criteria of the shopping zone services. For one-storied large-space commercial establishments in suburbs, the ratio of the total sales area and the total requirements of areas necessary for the sales outlet service may be 1:7, and possibly even higher. The most requirements from the point of investor’s view, concern thoroughfares (parking lots), representing usually 30–50 % of the total construction area. Green areas represent appr. 20–30 % of the construction area (Szczyrba, 2000).

ad 4) The criteria influencing the price of the construction lots are especially their location, infrastructure equipment and the limiting factors of the construction. In the context of the Czech Republic, one could add the purpose of exploitation defined by the territorial plan and, with respect to an incompletely developed lot market, even the subjective influence generated by the nature of ownership. The offer prices are generally based on administrative prices of construction lots defined for different categories of municipalities by the Law no 151/1997 of the Code, in a better case they are based on price maps respecting the available data on market prices. An overwhelming majority of development areas for large-space commercial buildings are localized on the periphery of municipal areas, sometimes even beyond their borders where lot prices are lower.

Figure 1: CB Richard Ellis Shopping centre development.jpg

Figure 2: Area of retail in Prague, CB Richard Ellis Prague SC area.jpg