Selling Milan in pieces: the finance-led production of urban spaces

ABSTRACT

The idea that the city of Milan is being ‘sold in pieces’, raised by one of the interviewees that collaborated with this study, is the perfect description of the piecemeal contractual urban planning approach that the municipality has relied on for the past decades. This paper will scrutinize the latest large-scale urban redevelopment project in the city, CityLife, and argue that this is the ultimate example of land being mobilized, produced, and negotiated, as a pure financial asset. The process occurring in Milan is not peculiar or unique to this city, as a matter of fact, many of the core elements that support CityLife are widely recognizable: financially constrained local governments in search of new revenue streams and looking to reduce expenses; the transition of non-financial firms into finance-led companies – the rise of shareholder value and other market metrics; the realization that real estate is ‘not just another asset class’, etc. This paper will rely on CityLife to discuss a growing trend in cities around the world, the financialization of the built environment and the different layers (actors) necessary to promote such finance-led urban ‘(re)development’ schemes.

KEYWORDS:

• Financialization
• Milan
• urban redevelopment project
• insurance
• real estate development
• Milano CityLife

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Stocks, shares, and bonds are some examples of traditional ‘pure financial assets’ due to their liquidity and mobility. As is the case of these examples, such assets do not require a physical form. Furthermore, their possession assures the owner a claim on future revenues/profits; their values and prices fluctuate according to external circumstances (demand/supply, macroeconomic condition, their degree of risk, etc.).

2 During the tender, the consortium was composed by Generali Properties, Allianz Italy (RAS SPA), Immobiliaria Lombarda (Progestim SPA), Lamaro Appalti SPA and Grupo LAR. Grupo Lar left the company immediately after the tender; interviewees involved with the project declared that the group was not satisfied with the aggressive financial strategy headed by Generali

3 The details of the deal between Allianz and Generali were not disclosed, but it is known that the German company bought the Isozaki Tower, some residential units, and sold its shares to Generali.

4 Since this is not a listed company there are no public reports on Lamaro nor its manager Silvano Toti S.p.A. However, on Silvano’s official website the last posts on the ‘media room’ section dates from 2013 and it is a report on the setbacks of the crisis on the Italian real estate sector.

5 The details of the contract between PwC and CityLife were not disclosed.

6 The Vigorelli Velodrome is the only one of these structures that, in theory, has been completed and inaugurated. In September 2016, the works were finally concluded and the space re-inaugurated (Gatti, 2016). However, more than a year after its official opening the space remains closed and very little information can be obtained as to why it is closed and when it will be reopened.

Additional information

Funding

This work was supported by Coordenação de Aperfeiçoamento de Pessoal de Nível Superior: [grant number 13086/13-8].