February 01, 2003

Stopping the Downward Spiral of Derelict Land: The Story of Sternberk

Recognizing that the legacy of communist planning and the transition to a capitalist economy have left a remarkably large amount of derelict land in many Central European towns, ITDP has worked to remove the barriers to recycling this land. Without intervention, this land will remain as “holes” in city centers, even as new development pushes the city sprawling outward into the agricultural fringe. The story of Sternberk shows how training local authorities can empower communities to tackle the redevelopment of this derelict land.

With extensive brownfields, some of them heavily polluted, Sternberk was highly motivated to explore brownfield redevelopment, and in 2001 sent a representative to the ITDP brownfield seminar, co-organized by the Region of Olomouc. Over the course of three more seminars, it cooperated in preparing and testing the first version of ITDP’s Brownfield Audit Project (BAP) in cooperation with Union of the Central Moravian Communities.

The audit highlighted several key findings, including the fact that seven percent of the town’s total area (63% of its former industrial holding) was brownfield. The audit allowed Sternberk officials to identify a key prospective site for redevelopment and made clear that in order to achieve its objectives of providing jobs for its citizens and improving its environment, the local authorities would have to work very closely with various local private owners.

In analyzing its own real estate ownership, the town realized that it had missed the boat on privatisation in allowing private owners to acquire large portions of strategically located land. To act now to reuse this land they would have to work indirectly, in partnership with these land owners.

Most importantly, the town drew on ITDP training to identify a large brownfield site that was still covered by the state National Property Fund environmental guarantees for cleanup of privatised properties. This already fragmented site was in danger of become even further broken up because of the imminent bankruptcy, which would force a piecemeal hurried sale of the remaining property.

Not only would bankruptcy make future consolidation and development of the site almost impossible, it would probably strip the property of this precious government guarantee. This would have made the site truly intractable.

Thus, bankruptcy would lead to a deeper and entrenched dereliction of the property, and the resulting degradation of surrounding properties, including some owned by the local authority. Realizing the urgency and implications of the situation, the local authority approached the private owners of the site.

The seminar had emphasized that a risk assessment was a prerequisite for eligibility for the environmental guarantee; since the site owners had no money to do this, the town agreed to step in and provide the risk assessment.

This assessment enabled the property owners to enter into an Environmental Clearance Contract with the National Property Fund and obtain money for site clearance – a value of 50 million crowns (about $1.7milion). With the prospect of a cleanup, their property regained a measure of commercial value, allowing the owners to buy back their bad debts at substantially reduced rates.

The Contract will not only remove environmental pollution and ensure that site ownership remains relatively consolidated, but it established a culture of partnership between the town and the owners.

The town then drew on some of the models of creative partnerships between local authorities and the private sector presented in the workshops. In consultation with the owners, the town created a site development plan, and negotiated an exchange whereby the owners would give over some of their property in exchange for the development of supportive infrastructure by the city.

The city has now applied for EU PHARE funding to help to redevelop this former industrial site as a mixed-use site for industry and housing.

The story is far from over. The site represents only one third of Sternberk’s brownfields, and even if this is cleaned up and prepared it remains to be seen whether the market will take it up. But the town is well aware of the hurdles, and is building on its experience of partnership with the site owners to approach local entrepreneurs to develop their businesses in a way that could eventually come to occupy the site.

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