By Michael Parker*
[This is Chapter 5 of the book, The Pine Tree Paradox. Links to the previous chapters are at the bottom of this page.]
ON THE WATERFRONT
A world-class research university at the centre of an Innovation Cycle in New Zealand will remain just a concept until we put pencil to paper and follow it up with glass, concrete and steel.
A university anchoring a global centre of innovation requires a physical complex consistent with the audacity of the vision: we need a bold, innovative, architectural masterpiece to house the university, preferably on Auckland’s waterfront.
"The Bilbao Guggenheim is cause for collective pride … When a culture lets itself settle for anything less than great, there’s no telling how low it will sink."
Auckland is a city of almost a million and a half people. Yet, when sailing towards Auckland on the Hauraki Gulf, the overwhelming sense is of a region that is largely uninhabited. On a clear, still day, less than five miles from the centre of New Zealand’s biggest city, all you can see are green, unpopulated islands, blue skies and aqua water.
Aside from the sight of your fellow 'boaties' fishing and sailing on the Gulf, the feeling is one of near total seclusion.
Sailing west toward the city, the eastern suburbs of Auckland and the downtown skyline comes into view. You know you are approaching a large city and yet, all the same, Motutapu Island to the left and Motuihe Island to the right look like well-manicured golf courses. Rangitoto Island - which elsewhere in the world might be three miles of flat beachfront property dotted with multi-million dollar villas and controlled by gated access - is part of the Hauraki Gulf Maritime Park and therefore has no full-time residents and, from the water, almost no visible buildings.
As you enter the Waitemata Harbour, the Auckland skyline comes closer into view. Five structures stand out: the Sky Tower, the Auckland Museum in the Domain southeast of downtown, the Auckland Harbour Bridge west of downtown, and the Hilton Hotel and the Ferry Building on the waterfront.
However, none of these structures hold the eye or linger in the imagination like the waters and islands of the Gulf.
As the tallest structure in the southern hemisphere, the Sky Tower certainly draws your focus onto downtown Auckland and gives the landscape some composition. Aucklanders have embraced the tower to a greater extent than expected when it was built in the mid 1990s. However, the breathtaking lack of originality in its design means that it fails as a defining or memorable Auckland structure.
The Auckland Museum (completed in 1929) is a good example of neo-classical architecture and, as such, looks like similar buildings just about anywhere in the world. The Ferry Terminal (completed in 1912) is an attractive Edwardian baroque building with a base of Coromandel granite. However, its striking similarity to the larger, grander and earlier Flinders Street Station (completed in 1910) in Melbourne means that there is a limit to the amount of civic pride that Aucklanders will take in their Ferry Terminal.
The Harbour Bridge (completed in 1959) is too utilitarian and insubstantial a structure to achieve any special connection with the city. No one loves the bridge, although the additional lanes attached to the outside of the structure in the late 1960s by Japanese construction firm Ishikawajima-Harima Heavy Industries - and referred to ever since as the “Nippon Clip-Ons“ - at least give the bridge an endearing personality.
Of any building in Auckland, it may be the Hilton Hotel at the Princes Wharf (completed in 2001) - thanks to its clean lines and sly evocation of, well, the Love Boat - that most successfully reflects the city’s mood and its proximity to and relationship with the water. However, the ambition and architecture of the hotel are too modest to be the definitive Auckland building.
Of course, a city’s most important architecture need not be prominent or large. Los Angeles’ tallest building is the wonderfully anonymous US Bank Tower downtown which stands 73 storeys tall and yet manages to be almost invisible. L.A.’s most iconic structures are the 13-storey Capitol Records building near the corner of Hollywood and Vine; the positively diminutive, 77-foot Sleeping Beauty Castle at Disneyland in Anaheim, California; and the 45-foot tall HOLLYWOOD sign on the Hollywood Hills.
In fact, a city can actively shun its most prominent architecture. The only thing more difficult than avoiding the massive Monumento Nazionale a Vittorio Emanuele II while in Rome is finding a postcard of the thing. The locals - who refer to the structure derisively as “the Typewriter”, “the Wedding Cake” or “the False Teeth” - would prefer tourists to focus instead on the Coliseum, the Trevi Fountain, the Pantheon and Saint Peter’s Basilica.
For some cities, defining architecture happens by accident while others can afford to ignore their mistakes.
However, ambitious cities need defining architecture.
The power of good architecture is its capacity to signal aspirations both to the world and to a city’s own residents. The Sydney Opera House certainly gives the impression that Sydney is a more sophisticated and cultured city than it may have been at the time of the opera house’s commissioning in 1955 or its completion in 1973. However, Sydney has undoubtedly grown into its own cultural billing in the intervening half century.
The Twin Towers at the World Trade Center in New York, as financial historian Niall Ferguson41 has pointed out, failed throughout the 30 years they stood in drawing New Yorkers into lower Manhattan. However, the Towers were clear emblems to the rest of the world of a new era of globalisation of which New York City is undoubtedly the capital.
And the list goes on of buildings that signal civic intent: the Burj Dubai is clearly intended to signal rising economic power and sophistication. Conversely, the Bird’s Nest in Beijing suggests the desire on the part of the Chinese to engage with the rest of the world in something other than trade. Regardless of their success or failure architecturally, each sends a message to the rest of the world about the region’s aspirations.
Auckland lacks such a defining or iconic building. And Aucklanders feel this void in their civic identity. How else do you explain the fact that the Sky Tower was built at all?
Despite the tired design, ultimately all the aesthetic risk of the Sky Tower was to the upside. There was no existing iconic building in Auckland for the tower to upstage.
RNZ 2011, the entity organising the 2011 Rugby World Cup in New Zealand, understood the power of architecture. The World Cup organisers proposed the 60,000-seat Stadium New Zealand be built on the Auckland waterfront at Marsden Wharf specifically for the tournament. Cleverly, the promoters of the stadium peppered their public statements about the development with phrases like “truly world-class” and “international city”. They attempted to exploit what every New Zealander understands at some level: New Zealand in general and Auckland in particular lacks a single, defining structure that signals our aspirations to the world.
Given its scale and location, the proposed stadium would have almost unavoidably fulfilled this role on the Auckland skyline. And therefore our message to the world—courtesy of the stadium - was to have been: in the future, as a nation, we intend to really focus on rugby.
Standing on the Shoulders of Pygmies
Ultimately, the proposed waterfront stadium was abandoned. The impulse to build was right. However, the execution was wrong. In fact, the execution was so poor that we now have a chance to try again.
We now have a window of time - maybe five or ten years - before something is built on the Marsden Wharf and Captain Cook Wharf sites. Cities fill voids, and the failed waterfront stadium campaign has charted the course to fill this one. And there is another force at play that should make us pay close attention to developments on the Auckland waterfront: buildings say a great deal about the people who build them. Or, less charitably, people get the architecture they deserve.
If we simply let the current dynamics in Auckland regional planning play out, we will be rewarded with bars, cafes, restaurants and luxury apartments: Viaduct Basin Redux. However, if we act, we have the chance to build something substantial and defining on that space.
Collectively, New Zealanders know what kind of society we want: a modern, liberal, wealthy, egalitarian, democratic, open, capitalist, educated, green, multi-cultural, secular, meritocracy. If we have this collective aspiration, decisions like what kind of a structure to put on the most prominent and currently under-utilised real estate in our largest city should be simple. We should build an institution that celebrates and declares this aspiration.
The society that we aspire to be requires that we focus our economy on innovation rather than agriculture. To build the Innovation Cycle, we need a world-class research university. There is no better way to announce our national aspiration than by placing this world-class research university in an instantly recognisable and architecturally significant complex on a pre-eminent site in our largest city: right on the Auckland waterfront.
There is one caveat: if the university complex is to prophesise the future of the country as a global centre of innovation, then the concept and the execution of the complex had better, in fact, be innovative, bold and grand. We cannot simply create an Expo Pavilion showcasing New Zealand. We need an architectural masterpiece that embodies our drive to innovate and reflects the scope and scale of our ambition. The complex should imbue the institution with a sense of place, a sense of substance and a sense of ambition.
The best way to achieve all of these things - as the city planners and residents of Bilbao, Beijing and Sydney know - is great architecture.
All Hat and No Cattle?
There are three different and equally important tracks in creating the university: the enterprise itself, the physical university complex and the funds to pay for it all. I address developing the enterprise and fundraising later in the book. This chapter discusses the physical complex.
I start with the physical space because that is where everyone else will start. The physical space that the university occupies is tremendously important because it sends a message to everyone: students and potential students, faculty and potential faculty, New Zealand politicians and citizens and any foreigner who sees the university in person, on a TV show, in a magazine or on a website. That message is: This is real. We have considered all the other available options to accelerate our economic growth as a country and this is the path where we are most likely to succeed. So we are doing it.
Setting aside the aesthetics, the power of the Sydney Opera House, the Guggenheim in Bilbao or the Bird’s Nest in Beijing is that these buildings are unequivocal and self-prophetic statements by and about the cities in which they are located.
Architecture provides a rare opportunity in life to twist correlation into causation. Cultural centres have beautiful opera houses. Sydney has a beautiful opera house. Therefore, Sydney is a cultural centre. The syllogism is flawed - except that, over time and thanks to its opera house, Sydney has become a cultural centre. The residents of Sydney and anyone who has ever seen the opera house knows this to be true. How do they know? Well, Sydney has the world’s most beautiful opera house. The Opera House made it so.
When Danish architect Jørn Utzon won the Pritzker Prize - architecture’s highest award, in 2003 - the judging committee noted that his masterpiece, the Sydney Opera House, is:
"… one of the great iconic buildings of the 20th century, an image of great beauty that has become known throughout the world— a symbol for not only a city, but a whole country and continent."
We need one of those.
In New Zealand, we can talk about the country as a centre of innovation and about how a New Zealand university may blossom over time into a world-class institution developing innovative ideas and driving economic growth. But that is just a concept. Until we put pencil to paper and follow it up with glass, concrete and steel, it remains just talk. Building the university complex itself is a first but important step to making it so.
There is also a more prosaic need for an architectural masterpiece to represent this national aspiration to innovate. Sooner than anyone thinks, the President of the University is going to be sitting across a table from a potential professor or student or administrator or donor trying to "sell" that person on our new university. The meeting may be in a private club in London, a coffee shop in New York or a restaurant in Buenos Aires. Perhaps coffee is being served, or maybe it’s a second bottle of wine. The University may have been courting this person for months, perhaps years. At some point during the conversation, the President will lean in, lock eyes and make the "ask".
At that precise moment, any number of thoughts will be running through the target’s mind: family, career, money, reputation, lifestyle, what to have for dessert. It is impossible for us to control most of those thoughts. But we can control one. We want to be sure that somewhere in the mix is the thought: "Gee, I would really love to work in / study in / have my name on the front of that building in Auckland."
Call it the Bilbao Effect.
The Bilbao Effect
The Guggenheim Museum in Bilbao, Spain was designed by California-based architect Frank Gehry and opened in 1997 to great acclaim. Architect Philip Johnson has called the museum "the greatest building of our time"; the New York Times architecture critic Herbert Muschamp referred to the museum as "the miracle in Bilbao". The museum is generally viewed as "the most celebrated piece of architecture in a generation"42. In fact, the museum has been credited with putting Bilbao, an industrial city in the Basque region of Spain, on the cultural map.
Bilbao, before the Guggenheim was built, is described as a gritty, industrial town reeling from the closure of its shipbuilding facilities in the 1980s. Reports from the early 1990s refer to a rundown city with unemployment rates in some areas of 35%, and to the stench from the Nervión river that runs through the town. It was during this period that the city earned the nickname "El Botxo", the Basque word for hole.
In the years since the Guggenheim opened, Bilbao has been boosted not just by its Gehry-designed museum but by an airport terminal and footbridge designed by Santiago Calatrava, and a metro system designed by Norman Foster. Zaha Hadid, Philippe Starck and Robert A. M. Stern have also lent their names to local projects. Even the river has been cleaned up. By the end of 2006, the museum had attracted some nine million visitors—the vast majority from outside the Basque region, and more than half from other countries43.
Gehry’s museum in Bilbao has been wildly successful architecturally, as a tourist attraction and as a source of urban redevelopment for the wider city.
The museum has also triggered a wave of public building commissions designed by Gehry and his contemporaries - Santiago Calatrava, Norman Foster, Renzo Piano, Daniel Libeskind - in "second-tier" cities around the world hoping to create the same level of tourism and urban renewal that Bilbao has achieved. The trend is generally referred to as the "Bilbao Effect".
The Bilbao museum demonstrates that good architecture works both at creating zones of urban redevelopment and at announcing a region’s ambitions to the world. And it works at a surprising modest price: the budget for the construction of Gehry’s museum was 14,028 million Peseta (equivalent to US$127 million based on the prevailing exchange rate at the time that the budget was agreed in 1992). The museum was completed on time and on budget in 1997.
Still, US$127 million is a considerable sum and construction occurred 15 years ago. Prices might well be higher today. But Te Papa in Wellington - built at the same time - cost NZ$300 million thanks in part to the costly dynamic compaction of the reclaimed lands on which the museum is built. Further, the waterfront stadium was estimated to cost NZ$497 million and third-party estimates ranged as high as NZ$900 million. The Eden Park redevelopment for the World Cup will cost between NZ$320 million and NZ$385 million. The Otago Stadium currently under construction is budgeted to cost NZ$198 million.
As a country, we can and we do spend the kind of money required to build public buildings like the Bilbao Guggenheim.
But we spend that money on modest designs and on stadiums. The notion that we might build something on the scale and ambition of Bilbao is not fanciful. We can do it. But we have to decide to. The decision to build an iconic building on Auckland’s waterfront is certainly not beyond our financial capability as a country.
The decision to build significant architecture in New Zealand should be based on the same - or ideally more stringent - criteria that we use when spending money on our sports stadiums. As New Zealand author Steve Carden has pointed out, there are "trade-offs when we plug money into a sports stadium over a science park… In a country the size of New Zealand, the legacy of $500 million decisions like that will last for generations."44
But beware the false choice: we can be a modern, dynamic, multicultural, innovative society and we can be good - great even - at rugby. Further, building a world-class research university does not mean that we cannot host or win a World Cup. However, it does mean that we have to state and truly embrace a national ambition, in addition to winning the World Cup.
So let’s embrace the debate.
Marsden Wharf will inevitably be converted into some kind of public space over the next decade. We have the chance to decide whether we get more cafes, bars and restaurants, or a sports stadium, or a university complex designed by a world famous architect, or something else. Based on the metrics used to justify the waterfront stadium - project economics and the opportunity to turn Auckland into a “world-class” city - converting Marsden Wharf to a university is simply the best and highest use of the space.
The Poor Economics of Stadium Construction
In Chapter 3, I suggested that there is a trillion-dollar opportunity for New Zealand if we follow a path of innovation rather than basing our economy around agriculture.
Obviously, this figure is illustrative and open to debate. However, few would argue that New Zealand would be worse off if we were a nation of research centres, start-ups, innovators, entrepreneurs and other creative enterprises anchored by a world-class research university, rather than a nation primarily based around agriculture. As a financial proposition, the conversion of New Zealand to a centre of innovation offers a very attractive return on investment, if we get the execution right. There are risks involved, but there is a handsome pay-off for getting it right.
The same cannot be said for New Zealand rugby stadiums. And yet what do we continue to build? We build new and redeveloped rugby stadiums—in every major city in the country. Whatever the rationale for building stadiums with public funds, it cannot be economics.
Based even on the broadest definition of economic impact, the financial return on a waterfront stadium in Auckland would have been poor. Strangely, no one seems to have focused much on this issue in either the government reports or other consultants’ documents prepared during the waterfront stadium campaign.
The feasibility studies that were commissioned in relation to the stadium dealt with timing and cost. The requirement to provide a 60,000 seat stadium had already been agreed to as part of winning the hosting rights to the Rugby World Cup. Studies reviewing the profitability of the venture do not appear to have been undertaken or, at least, published.
The waterfront stadium’s cost was estimated at between $500 million and $900 million. The government’s own estimate was $497 million. The Eden Park Trust Board commissioned two independent quantity surveyor firms - WT Partnership and David Langdon - to estimate the cost to complete a waterfront stadium in time for the 2011 Rugby World Cup45. Both estimates were greater than $900 million and reflected the costs of iconic design provisions to meet the expectations of the New Zealand public for a national stadium; costs to get the stadium completed on time; and relocation and land purchase costs for the current tenant, Ports of Auckland Limited.
In terms of funding, the government announced it was willing to commit “half the funding required for the national stadium, after other national or central government funds, trust funding and private funding such as naming and sponsorship rights have been deducted”. The full extent of the government’s commitment was never discernible as plans were scuttled for the stadium in late November 2006 when the government announced a change of heart.
Of course, large, outdoor stadiums in previously low-income or industrial areas can succeed from an urban-planning perspective and can turn some level of profit when they create incremental activity, attracting businesses and residents to a previously neglected neighbourhood, rather than simply transferring activity from another part of town.
The best example of this trend in the U.S. is Camden Yards in Baltimore. The home stadium for Baltimore’s perennially unsuccessful baseball team, the Orioles, has transformed a low-income area by drawing people to the district to watch baseball and - at the same time - support the bars, restaurants, cafes, shops, hotels and apartment buildings that have flourished in the area. The team still loses 60% of the time, but now people go to the games. The stadium opened in 1993 and has since become a model for downtown stadiums in the U.S, drawing an average of over 43,000 fans per game for the first ten years of the park’s existence.
A study by the Brookings Institute46 in the U.S. commissioned four years after Camden Yards opened suggested that the net gain to Baltimore’s economy in terms of new jobs and incremental tax revenues is about US$3 million a year. However, given that the stadium cost US$200 million, that kind of return on investment is still pretty poor.
A key difference between the successful baseball stadiums in the U.S. and the proposed Stadium New Zealand is that the American baseball season is 162 games long. That is 81 home games, attracting - on average - 40,000 fans per game. That is approximately 3.2 million unique visits to the area per year for each new stadium erected.
In the Stadium New Zealand example, an Auckland rugby stadium would host - from 2011 - six Super 15 matches (two go to North Harbour, the other province in the Blues franchise) and two All Black test matches each year. Add in another five Air New Zealand Cup games, a cricket test match and a couple of one-day or 20-20 internationals. That is 22 playing days in total. Assume that average attendance is 50,000 people. That is 1.1 million unique visits to the area. Even if some level of attendance for provincial cricket matches is included, total annual attendance is still likely to be far less than half the number of visits to an American baseball stadium each year. And 50,000 fans each day for a cricket test match or a provincial rugby game are very generous - or simply unrealistic - assumptions.
The economics for a downtown stadium can work - if the stadium is the home field for a team that plays a lot of games, preferably in warm weather. At an American baseball stadium, the teams do not usually play before the first week in April or after the last week of September. In those six Northern hemisphere “warm weather” months, there is a game being played at the home stadium the equivalent of every other day. The economics of running a restaurant or a shop at such a location become a lot easier when that kind of activity is guaranteed.
However, these “downtown stadium” economics do not work when dropping annual attendance by half or even two-thirds and, at the same time, increasing the cost of construction by a factor of two or more. Camden Yards cost US$200 million (say NZ$350 million) to build and attracted 3.2 million people annually for the first ten years of its existence. Stadium New Zealand would have cost - say - $700 million and would have attracted 1.1 million people a year. The “downtown stadium” model has marginal economics to begin with. It turns into a trail of red ink in an Auckland setting.
But surely the economic impact of the World Cup should be considered? The estimate is that the 2011 World Cup will increase New Zealand GDP by $500 million. But that would be true regardless of whether Stadium New Zealand was built or not. None of that revenue was going to be generated because of the waterfront stadium. The additional expenditures on the waterfront stadium, beyond the Eden Park redevelopment costs, would drive no additional revenue.
I acknowledge that rugby fans coming to the World Cup from South Africa or England or Australia would no doubt have enjoyed the Auckland waterfront views on their walk to the stadium to watch the World Cup semi-finals. However, that view was not going to be the reason any of those fans made the trip to New Zealand. Rugby fans at a World Cup care about sight lines, cold beer and winning. The location of the stadium is not relevant. Therefore, the claim that the cost of the waterfront stadium should be matched to revenue streams from the World Cup simply does not stand up.
But at its core, the waterfront stadium proposal was not about money. On 10 November 2006 Minister for the Rugby World Cup Trevor Mallard - in announcing the government’s short-lived support for the stadium - summed up the underlying rationale for building a waterfront stadium: “a waterfront location is the option that can most meaningfully contribute to the Government’s vision for Auckland as a truly world-class, international city”.
And there it is: the ambition that Auckland would become a truly world-class, international city was at the heart of the waterfront stadium.
Here we switch from the realm of flawed economic analysis to the realm of flawed logic.
A large stadium that sits empty or nearly empty for 344 days of the year will not make Auckland a world-class, international city. If it did, then add Nashville, Tennessee; Jacksonville, Florida; and Glendale, Arizona to the former Minister’s list of world-class cities. Each of these cities has massive NFL stadiums that sit empty for 350 days or more each year. And yet, unfathomably, these cities remain distinctly un-cosmopolitan.
The notion that a sports stadium in a New Zealand city does anything for urban development, economic development or status as a “world-class” city is simply wrong-headed. And yet it seems like the only kind of architecture that we are able to get built.
Sending a Message
If we want a world-class, international city, we need to create a “variety of economic opportunities, stimulating environment and amenities for every possible lifestyle”47 that is at the heart of the creative centre.
If the objective is to build a world-class city, don’t build a stadium, or bars, or shops, or apartment buildings. Build a university.
If we want to bridge the US$1 trillion gap between New Zealand as an innovation-based economy and New Zealand as an agriculture-based economy, we need the Innovation Cycle discussed in Chapter 4.
If we want Auckland to be a world-class city, we need an Innovation Cycle. To build that Innovation Cycle, we need a “Boom Generator”. That means a university.
And, if we are embracing the idea of New Zealand as a centre of innovation, then we need to send that message to the world and to ourselves in bold and unequivocal terms.
The best way to do this - as Sydney, Beijing and Bilbao can attest - is architecture.
The details around, and design of, the complex will be determined over time: maybe we hold an open competition and invite public comment. This was how the designs for the Sydney Opera House and the redevelopment of the World Trade Center were decided. Maybe we short-list three prominent architects from the very beginning, as was the case in Bilbao.
Maybe the Marsden Wharf space will prove insufficient over time. Perhaps the university campus will need to expand across the harbour to the Devonport naval base.
For now, process can take a backseat. Right now, we need consensus around building a waterfront university complex. We need to set aside expectations of using a New Zealand architect, New Zealand materials or of reflecting iconic New Zealand design. We are not building an Expo Pavilion to showcase New Zealand. We are building an architectural marvel to capture the world’s attention and announce our aspirations.
We have to follow the lead of Bilbao, Beijing and Sydney and build a complex that speaks to our global ambitions and that speaks globally. We must ensure that we do not settle for anything less than great. The building will be stunning. That will be enough.
And, while we build it, we will also need to establish a world-class university to house inside it.
40. "Miracle in Bilbao", New York Times Magazine, 7 September 1997
41. "New York: A Documentary Film", Episode 8, "The Center of the World", PBS 2002, Directed by Rick Burns
42. New York Times, 23 September 2007, "Bilbao, 10 years later"
43. New York Times, 23 September 2007, Bilbao, 10 years later"
44. Carden, Steve with Murray, Campbell, "New Zealand Unleashed", Random House, 2007, page 221
45. Eden Park Trust Board Media Release 16 November 2006 "Waterfront stadium to cost $900 million plus"
46. Sports, Jobs, and Taxes The Economic Impact of Sports Teams and Stadiums, Taxes, Competitiveness, Corporate Taxes, Corporations, U.S. Economy, Andrew Zimbalist and Roger G. Noll, Brookings Institution Press 1997 c. 525pp.
47. Richard Florida, page 11, Rise of the Creative
This is the sixth part of a serialisation of the book, The Pine Tree Paradox. It will be published online here in eleven parts.
The Introduction is here »
Chapter 1 is here »
Chapter 2 is here »
Chapter 3 is here »
Chapter 4 is here »
Chapter 5 is here »
Chapter 6 is here »
Chapter 7 is here »
If you would like to buy a copy of the full book, you can do so by credit card here » (Visa or Mastercard only.)
Michael Parker is an equity analyst living in Hong Kong. Originally from Wellington, he has spent the last decade in San Francisco, New York and - on good days - Waiheke. He has a law degree and bachelor of commerce from the University of Otago and an MBA from NYU. You can contact him here »
Used with permission. © Michael Parker. This book was originally published in 2010.
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