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Redevelopment potential of brownfields: A-B-C classification and its practical application

Abstract

Brownfields significantly influence the contemporary character of the majority of cities, towns and villages not only in the Czech Republic, but Europe wide. It is obvious that potential of individual brownfields to be redeveloped differs according to various factors. As a consequence of existence of thousands of brownfields classification of such sites has to be developed to enable their sorting and selecting for redevelopment. The majority of experts concerned with brownfields are familiar with the theoretical model of brownfield types A-B-C introduced by the Cabernet Project, funded by the European Union. This classification of brownfields according to their redevelopment potential could be applied in decision making on necessity of public funding for individual brownfields redevelopment projects. This proposal, however, has two caveats: The first one lies in the classification method used to sort brownfields into the individual categories. The second lies in applying the classification within the system of subvention programmes where regeneration has often different goals. This paper follows the theoretical debate on brownfields classification in its first part; the second part is devoted to analysis of the A-B-C model and its practical application on set of brownfields on the example of the South Moravian and Ústí Region (the Czech Republic). More than 20 various indicators were employed to evaluate redevelopment potential of studied brownfields

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Redevelopment potential of brownfields: A-B-C classification and its practical application

Author: Doleželová, Lucie
Publisher: Technická Univerzita v Liberci
Year: 2014
Source: https://dspace.tul.cz/bitstreams/015f1304-3001-46c6-b81d-0d641606bbc5/download
Ekonomie
34 2014, XVII, 2 DOI: 10.15240/ ul/001/2014-2-003
In oduc ion
The issue o b own ields and hei ede elopmen
aises a wide public deba e in many coun ies
wi hin he Eu opean Union. Exis ence o his
phenomenon, which is bo h linked o long
his o ical indus ial adi ions [16] in his egion
and ecen ends in he socie y like deindus iali-
za ion p ocesses, signi ican ly in luenced he
cha ac e and spa ial s uc u es o plen y o
ci ies, owns and illages. Jus o he a ea o
he Czech Republic, whe e also ansi ion o
economy in las wo decades has o be
conside ed, es ima ions a y be ween 8.5 and
11.7 housands o such si es on a eas be ween
27–38 housand hec a es [4]. These b own ields
si es a e loca ed in a ious loca ions. On one
hand, plen y o b own ields could be ound in
inne pa s o la ge ci ies, on he o he hand
some o b own ields a e ag icul u al ac i i ies
could be ound in almos e e y u al munici-
pali y [13]. I is ob ious ha ede elopmen
po en ial o di e en ypes o b own ields di e
acco ding o loca ion and i s consequences
(e.g. loca ion wi hin a ci y, p oximi y o he
cen e , p oximi y o highway e c.). Bu also
o he ac o s like poli ical, cul u al o en i on-
men al issues ha e o be se iously aken in o
accoun oo. The p oposed pape is ying o
ollow he heo e ical deba e on ede elopmen
po en ial o indi idual b own ields and i s
classi ica ion. Applica ion o one o me hods
(A-B-C classi ica ion) on example o se o
b own ields in he Sou h-Mo a ian Region and
he Ús í Region o he Czech Republic is
employed in he la e pa o his pape o
iden i y po en ial o a ious ypes o b own ields
and o show he p ac ical use o his me hod.
1. Ra ionale behind B own ields
Classi ica ion
B own ields classi ica ion, i.e. hei so ing in o
ca ego ies, is he nex s ep ha has o be
employed a e hei iden i ica ion, desc ip ion
and mapping [24]. I has o be s essed ha
classi ica ion in gene al is la gely a heo e ical
and concep ual ask. So ing o b own ields in o
ca ego ies should be i al o he choice o
egene a ion s a egies and concep s [20].
Se e al classi ica ion sys ems we e de eloped
wi hin esea ch s udies bo h in he Czech
Republic ([25], [9], [15]) and many o hem in
o he coun ies wi hin he Eu opean Union (e.g.
[1], [21]) o ou o Eu ope (e.g. [23], [10], [11],
[12]). Some o hese classi ica ions a e wo king
wi h mo e economic indica o s [1], o he s a e
mo e o ien ed on echnical and en i onmen al
aspec s [21]. Di e en app oaches a e also
employed i such classi ica ion is ca ied ou on
he local, egional o e en na ional le el [6].
GIS me hods (e.g. [22]), whe e he ex en and
loca ion o b own ields a e conside ed as he
mos impo an ac o s [13], a e e y use ul o
de elopmen o b own ields classi ica ions and
o modelling o impac o b own ields on
neighbou hoods. Such classi ica ions o e
suppo o decision make s o iden i y indi idual
b own ields o g oups o b own ields ha a e
wo h o be ede eloped [5] o could also se e
as he base o s uc u al help o economically
weak egions [18], [19], [26].
REDEVELOPMENT POTENTIAL OF
BROWNFIELDS:
A-B-C CLASSIFICATION AND ITS PRACTICAL
APPLICATION
Lucie DoleÏelo á, Michal Hadlaã, Milada Kadleco á,
S anisla Ma iná , Milan Polednik
EM_02_14_zlom 4.6.2014 8:54 S ánka 34
Economics
352, XVII, 2014
Fo example he ci y o B no has one o he
less p ac ical classi ica ion sys ems. C ea ed
as a pa o he Pha e p og amme unded
p ojec , i con ains 9 ca ego ies: 1a, 1b, 2a,
2b e c..., (which a e oo complica ed and do no
de ine he egene a ion po en ial o he si e).
Mos o hem saw a li le p ac ical use, o
example in di ec ing public unding o b own ield
egene a ion. In ou opinion, he classi ica ion
ecommended in he Eu opean P ojec
Cabe ne [3] is he mos use ul o decisions
abou public unding. This classi ica ion, simila
o he classi ica ion used in he Uni ed Kingdom
Na ional B own ield Regene a ion S a egy [4],
di ides b own ields in o h ee A-B-C ca ego ies
as o hei de elopmen po en ial. The A si es
a e so called sel -de eloping si es. Thei
egene a ion can be ealized in he ee ma ke
economy wi hou he need o public unding
( o mo e commen s on impo ance on ma ke
o b own ields ede elopmen c . [21]. The
Bsi es a e "po en ial de elopmen " si es which
equi e some (possibly indi ec ) o m o public
unding. These p ojec s can be ealized only
wi h a ma ginal p o i abili y, he e o e hey
appea oo isky o p i a e in es o s. Regene a ion
o he C ca ego y "non-de eloping" si es
ep esen s a inancial loss o he in es o . I is
ca ied ou in jus i ied cases (en i onmen
p o ec ion, sa e y, eal es a e ma ke suppo
e c.) wi h public unding and o en by public
en e p ise. P i a e en e p ise is no in e es ed
in C si es, because he egene a ion cos s will
no gua an ee he inc ease in alue o he si e
ha would enable u u e de elopmen . Such
in es men made by public adminis a ion could
pay o la e , o example i he si e becomes
sui able o building. Some la e s udies include
aDca ego y o pe manen ly de elic si es [2]
ha equi e no in es men , bu may become
egene a ed by he p ocess o na u al succession.
In he condi ions o he Czech Republic his
ca ego y is jokingly e e ed o as he "sel -
des uc ing" ca ego y. The e a e usually
de elic buildings which a e g adually (and mos
o en illegally) aken apa o cons uc ion
ma e ials, and he emnan s a e o e g own.
The A-B-C classi ica ion, commonly known
among expe s, was used in he documen
app o ed by he go e nmen o he Czech
Republic – he Na ional S a egy o B own ield
Regene a ion [4] ha was acknowledged by he
Go e nmen o he Czech Republic. I was no ,
howe e , used o public decisions ega ding
b own ields and hei managemen , because
he heo y, in ou ci cums ances, is only
ca ching up o p ac ice.
The A-B-C classi ica ion is highly
in o ma i e abou he ede elopmen po en ial
o b own ields, because he a io o
egene a ion cos s o he u u e si e alue akes
in accoun bo h he loca ion and he s a e o he
b own ield, see Fig 1.
Fig. 1: B own ield ede elopmen ypes – he A-B-C Model
Sou ce: h p://www.cabe ne .o g.uk
EM_02_14_zlom 4.6.2014 8:54 S ánka 35
Ekonomie
36 2014, XVII, 2
Aco ec classi ica ion o a b own ield in o
he A-B-C ca ego y equi es no only he
knowledge o i s cu en s a e, bu also he
knowledge o he in ended u u e use o he
si e, so ha he egene a ion cos s can be
p ope ly assessed. Al hough we do no know
he me hods used in a ious na ional s a egies
o b own ield classi ica ion, classi ica ion
esul s a e o en used in documen s. Acco ding
o a F ench s a egy om 1980s [7], only an
es ima ed 10% o si es we e in he A ca ego y.
ACanadian s a egy [17] es ima ed ha
60–70% o all b own ields belong o he B ca ego y.
The Uni ed Kingdom na ional s a egy also uses
aclassi ica ion sys em. In 2007, he Czech-
In es agency concluded he Sea ch S udy o
Loca ion o B own ields, execu ed be ween
2005 and 2007 in 13 egions ou o P ague.
The S udy mapped 2,355 si es wi h he o al
ac eage o 10,362 hec a es. The pu pose o he
s udy was no o achie e a cumula i e mapping
o all b own ields. I egis e ed only a ep esen-
a i e sample o 100, 200 o 250 si es pe
egion. Si es ideal o p epa a ion o egene a ion
p ojec s and possible inancing om s uc u al
unds we e la e selec ed in he so called 2nd
and 3 d s age. This is o en o e looked when i
comes o in e p e a ion o he s udy esul s.
Al hough he s udy does no yield he o al
numbe o b own ields, some o i s esul s
p esen in o ma ion alid o he en i e Czech
Republic. The idea o apply economic analysis
o he s udy da a o he de elopmen o
aclassi ica ion sys em sugges ed i sel .
2. The Economic Analysis o he
De elopmen Po en ial Pe o med
on a Sample o B own ields
A ep esen a i e sample o 36 b own ields om
he Ús í Region and 44 b own ields om he
Sou h Mo a ian Region was selec ed o he
economic analysis. Simila ly o he abo e
men ioned Sea ch S udy, si es bo h cen ally
loca ed and emo e, o a ying ac eage, a ious
o me and u u e use and di e en deg ees o
land co e age we e selec ed. The egions we e
selec ed so ha bo h economic si ua ion and
loca ion o he egion would ma kedly in luence
he A-B-C classi ica ion o he si es.
The pu pose o he s udy was o e alua e
he pos - egene a ion "comme cial po en ial" o
he si es based on he collec ed da a. The
esul ing pos - egene a ion plo (o eal es a e)
p ices, including in es men cos s and e en ual
sub en ion unding, we e compa ed wi h eal
es a e ma ke p ices ypical o he loca ion.
The p incipal aim o he s udy was an
assessmen o economic easibili y o egene a ion,
i.e. compa ison o in es men p o i abili y om
he in es o iewpoin . The esul o he analysis
was a s a emen o how many and possibly
wha kind o p ojec s/si es a e ealizable on
"comme cial basis", ha is wi hou sub en ions,
and belong o he A ca ego y, how many and
wha kind o p ojec s equi e public unding and
belong o he B ca ego y, and how many and
wha kind o p ojec s a e no ealizable e en
wi h he assump ion o public unding, and
he e o e belong o he b own ield C ca ego y.
Bo h gene al and ai ly de ailed in o ma ion
abou indi idual si es was collec ed du ing he
i s s age o he Sea ch S udy. The da a
included loca ion iden i ica ion, desc ip ion o
he ac eage and he land co e age o he si e,
and i s o me , cu en and an icipa ed u u e
use. Owne ship o he si e was de e mined, and
limi a ions imposed by na u al and echnical
condi ions and zoning. Da a on anspo a ion
access, exis ence o ecological bu den and
e en ual in es men goals we e collec ed, and
a ough es ima e o si e e i aliza ion cos s was
p oduced. This i em in he si e desc ip ion caused
many di icul ies o he Sea ch S udy au ho s.
The es ima es could signi ican ly de ia e om
eali y ei he as an o e alua ion, o unde alua ion.
Simila ly o he Sea ch S udy, si es bo h cen ally
loca ed and emo e, o a ying ac eage,
a ious o me and u u e use and di e en
deg ees o land co e age we e selec ed. The
es ima es p esen ed a simila hind ance o he
economic analysis, pa icula ly he lack o mo e
de ailed so ing o egene a ion cos s, whe e
he i em " eal bu dens" we e omi ed, as well as
di ec and consequen ial in as uc u e cos s.
Real bu dens (ecological bu dens) in pa icula
can be ealis ically es ima ed o many si es,
and al hough hey we e men ioned in he si e
desc ip ions, hey we e no quan i ied. While
he es ima e o in as uc u e in es men would
be possible in he o m o an o e all cos
ac ion ela i e o ac eage, he es ima e o
consequen ial in es men s ou side he loca ion,
namely hose associa ed wi h p o iding
anspo a ion access, could pose a p oblem.
In es men needs would ha e o be adequa ely
checked o all ypes o in as uc u e
EM_02_14_zlom 4.6.2014 8:54 S ánka 36
Economics
372, XVII, 2014
( anspo a ion access o a loca ion is o en
in e connec ed wi h b oade anspo a ion
p oblems o i s espec i e municipali y). Wi h
ega d o he ci ed issues, he inal e alua ion
was ocused p edominan ly owa ds a gene al
p o i abili y assessmen o he in es men s.
The a e age egional esul s es ima e he
gene al ecological and o he eal bu dens in he
amoun o 10–15% o he o al egene a ion
cos s ( equi ing a co esponding inc ease in
g an unds).
3. The Assessmen Me hod o
aSi e De elopmen Po en ial
Alocal ma ke p ice and a eal es a e saleabili y
coe icien we e de e mined o each si e based
on i s p incipal unc ion and loca ion, including
e alua ion o anspo a ion access ( he de e mi-
na ion o local ma ke p ice and saleabili y o
eal es a e was based on sou ce ma e ials om
he Regional In o ma ion Ins i u e, L d., pa icu-
la ly om a da abase moni o ing apa men p ices
and en (also known as KISEB – Komplexní
In o maãní Sys ém Ekonomiky Bydlení – he
Complex In o ma ion Sys em on Housing Econo-
mics), es ablished by he Ins i u e in 2000).
Asynop ic in en o y including a loca ion
map was p epa ed o each si e.
The o al p ice o he plo was de e mined
om he si e ac eage and he ma ke p ice
o he plo pe m2(pos - egene a ion).
To al loo space o building s uc u es and
loo index we e used o de e mine an
es ima ed ep oduc ion cos o buildings
wi h ega d o hei unc ion, u he adjus ed
by he a e age amo iza ion es ima e and
saleabili y.
In indi idual cases, he in es men
expendi u e o e i aliza ion es ima e was
compa ed wi hin building ep oduc ion cos .
Cases whe e e i aliza ion cos s exceeded
100% o ma ke p ice we e ma ked in he
synop ic in en o y, as well as cases whe e
he cos s ep esen ed less han 10% o
ma ke p ice. Such a iabili y in he
e i aliza ion cos s indica es dissimila
app oaches o e i aliza ion cos s
assessmen .
Acompa ison o he p e- and pos -
e i aliza ion ma ke p ice was pe o med,
and he need o in es men s was de e -
mined o a 40% s. 85% g an inancing
scena io.
The esul was an e alua ion o he
in es o 's ne p o i o loss wi h espec o he
an icipa ed ma ke p ice inc ease and
in es men p o i abili y.
Local plo ma ke p ices we e de e mined
based on esiden ial eal es a e saleabili y
coe icien s (i.e. esiden ial eal es a e ma ke
p ices), assuming ha a eal es a e ma ke
p ice equals he building ep oduc ion cos plus
he ma ke p ice o he plo . Known p opo ions
o plo ma ke p ices based on hei use
(indus ial, s o age, esiden ial, comme cial) we e
also u ilized. The saleabili y coe icien was he
s a ing pa ame e o in es men p o i abili y
e alua ion. Real es a e saleabili y was
de e mined o each loca ion by he Regional
In o ma ion Ins i u e, L d., which moni o s eal
es a e p ices in he Czech Republic since 2000.
Real es a e saleabili y (saleabili y coe icien )
was de e mined as he a io be ween ma ke
p ice and he ep oduc ion cos (i.e. he building
cos minus amo iza ion). I exp esses he
ela ionship be ween building in es men s and
he cu en p ice o which he building could be
sold a he p esen ime. The saleabili y
coe icien o esiden ial eal es a e exp esses
he s a e o supply and demand equilib ium in
agi en loca ion. Al hough i was de e mined
pa icula ly o he esiden ial ype o eal es a e,
i would be simila o saleabili y coe icien s o
o he ypes o eal es a e a he ime. Saleabili y
coe icien s a e commonly lis ed in he egula ions
o he Minis y o Finance o he Czech
Republic on p ope y alua ion, e.g. Regula ion
No. 617/2006 Sb., amending Regula ion No.
540/2002 Sb., on implemen a ion o ce ain
p o isions o Ac No. 151/1997 Sb., on P ope y
Valua ion and Amendmen s o Ce ain Ac s
(P ope y Valua ion Ac ), as amended. The
o e all assignmen o saleabili y coe icien s o
municipali ies g ouped acco ding o hei size in
indi idual dis ic s o he Czech Republic limi s
he applicabili y o such coe icien s.
I he saleabili y coe icien is less han 1.0
e.g. 0.5, hen i is p obable ha he owne can
sell he building o a 50% o he ep oduc ion
cos . I such building should be newly cons uc ed,
a100% o ep oduc ion cos would ha e o be
conside ed. (Va ia ion o building cos s in he
Czech Republic depending on loca ion is ai ly
small.) I he saleabili y coe icien is g ea e
han 1, i is sa e o assume ha he inc ease o
eal es a e p ices abo e he ep oduc ion cos
EM_02_14_zlom 4.6.2014 8:54 S ánka 37
Ekonomie
38 2014, XVII, 2
will be e lec ed in an inc ease o plo p ices
(e.g. plo s in ci y cen es and a ac i e ci y
loca ions sui able namely o he comme cial,
adminis a i e and accommoda ion use).
P e alen saleabili y o eal es a e wi h he
coe icien alue less han 1 e lec s:
aless han ideal loca ion o such eal es a e
(namely be o e 1990),
aless han he ideal s uc u e o such eal
es a e (i does no ep esen he bes
possible use o he si e),
asu plus o such ype o eal es a e in he
en i e Czech Republic o on he local ma ke
(e.g. ag icul u al eal es a e be o e 1990).
The saleabili y coe icien gi es new
in es o s a clea signal abou in es men isks
o a gi en loca ion and eal es a e ype. On he
o he hand i indica es he need o public
unding, i such eal es a e should be sus ained.
4. Economic Analysis Resul s
I can be said ha he loca ion o he Sou h Mo a ian
Region and Ús í Region wi hin he Czech Republic
adically in luenced he a e age plo ma ke p ices
and he saleabili y o all eal es a e (buildings),
and he e o e also he egene a ion p o i abili y
o all si es. The o al ac eage o b own ields
subjec o he s udy was app oxima ely 342 ha
in he Sou h Mo a ian Region (44 si es) and
243 ha in he Ús í Region (36 si es). Bu den
magni ude can be exp essed ela i ely o he
numbe o inhabi an s o he Region. The Sou h
Mo a ian one hus exhibi s a pe capi a bu den
Tab. 1: Summa y esul s o he economic po en ial analysis o b own ield si es
Line Indica o Uni Sou h Mo a ian Region Ús í Region
1Si e ac eage m23,418,330 2,431,963
2Floo space o buildings m2308,939 652,373
3G oss es ima e o si e e i aliza ion cos s mil. CZK 5,235 4,409
4Si e e i aliza ion cos s as a pe cen age o ep oduc ion cos % 39% 31%
5A e age amo iza ion es ima e % 69% 63%
6Fu u e si e use coe icien (a e age) - 0.90 0.89
P ices as o 2007
7Plo ma ke p ice CZK/m2471 341
8Saleabili y coe icien - 0.85 0.58
9To al plo ma ke p ice mil. CZK 1,610 829
10 Building ep oduc ion cos wi hou amo iza ion mil. CZK 13,430 14,319
11 Building ep oduc ion cos wi h amo iza ion mil. CZK 4,148 5,289
12 Ma ke p ice o buildings be o e e i aliza ion mil. CZK 3,509 3,065
13 Ma ke p ice o buildings a e e i aliza ion mil. CZK 7,719 5,587
14 In es men s needed wi h 40% g an unding mil. CZK 3,141 2,645
15 In es men s needed wi h 85% g an unding mil. CZK 785 661
16 Building ma ke p ice inc ease mil. CZK 4,210 2,522
17 Plo ma ke p ice inc ease* mil. CZK No e alua ed No e alua ed
18 To al eal es a e ma ke p ice inc ease mil. CZK 4,210 2,522
19 P o i /loss on in es men a 40% g an unding mil. CZK 1,069 -124
20 P o i /loss on in es men a 85% g an unding mil. CZK 3,425 1,860
21 In es men p o i abili y a 40% g an unding % 34% -5%
22 In es men p o i abili y a 85% g an unding % 436% 281%
* No e alua ed because o missing da a on eal bu dens, ecological bu dens in pa icula .
Sou ce: Regional In o ma ion Ins i u e, L d.
EM_02_14_zlom 4.6.2014 8:54 S ánka 38

Economics
392, XVII, 2014
o 3.02 m2/inhabi an and he Ús í Region only
ma ginally lowe alue o 2.95 m2/inhabi an .
The esul s we e p ocessed in o he synop ic
in en o y o each si e (a p i a e ou pu ), in o
summa y ables con aining selec in o ma ion
o all si es and in o an o e iew able (Tab. 1).
The a e age saleabili y coe icien was 0.85
in he Sou h Mo a ian Region, 0.58 in he Ús í
Region. 38 ou o 44 si es we e ound o ha e
saleabili y less han 1 in he Sou h Mo a ian
Region. 33 ou o 37 si es we e ound o ha e
saleabili y less han 1 in he Ús í Region.
Si es wi h he eal es a e saleabili y
coe icien g ea e han 1.1 can be conside ed
unequi ocally comme cially a ac i e o
in es o s e en wi hou g an unding (unless
excessi e eal bu dens o in es men isks
exis ). These si es belong in o he ca ego y A.
Ano he g oup, classi ied B acco ding o he
P ojec Cabe ne , con ains si es wi h he
saleabili y coe icien equal o smalle han 1.1,
bu g ea e han 0.75. These si es can be
some imes egene a ed e en wi hou di ec
public unding (e.g. when public in as uc u e
is imp o ed, namely anspo a ion access o
he si e). These si es ep esen lowe in e nal
cos s o he in es o , o he in es men
p o ides compa a i e supplemen al ad an ages.
The ac ha in some cases he egene a ion
cos s we e no p ope ly es ima ed needs o be
conside ed. The e o e he ca ego y B is de ined
a he b oadly. Remaining si es wi h he
saleabili y coe icien less han 0.75 make up
he g oup o unp o i able p ojec s, ma ked by
he le e C.
The majo i y o b own ield si es in bo h
egions ell in o he ca ego y C. The ollowing
able (Tab. 2) p esen s an o e iew o he
numbe and ac eage o si es and hei
espec i e A-B-C classi ica ion.
Tab. 2: Classi ica ion acco ding o he P ojec Cabe ne
Region Ca ego y A Ca ego y B Ca ego y C To al
Numbe To al Numbe To al Numbe To al Numbe To al
o si es ac eage o si es ac eage o si es ac eage o si es ac eage
in m2in m2in m2in m2
Sou h
Mo a ian 10 507,380 12 544,490 31 2,366,460 44 3,418,330
Ús í 2 128,997 7 665,466 28 1,637,500 37 2,431,963
Sou ce: Regional In o ma ion Ins i u e, L d.
Si es in ci y cen es o a anspo junc ions,
ep esen ing oppo uni ies o business, accom-
moda ion, o adminis a i e use we e comme cially
he mos a ac i e o in es o s. Ag icul u al eal
es a e (plo s o buildings) appea ed comme -
cially unin e es ing – bu hei con inuing nega i e
de elopmen could no be unequi ocally
an icipa ed in he long un (wi ness he ecen
signs o ag icul u e p oduc ion e i al).
The a e age plo ma ke p ice was ound o
be 471 CZK/m2in he Sou h Mo a ian Region
and 341 CZK/m2in he Ús í Region. The plo
ma ke p ice anged om 45 o 1,254 CZK/m2
in he Ús í Region and om 98 o 1,397 CZK/m2
in he Sou h Mo a ian Region.
40% g an unding would help achie e
p o i abili y in 14 ou o 37 si es in he Ús í Region,
and in 27 ou o 44 si es in he Sou h Mo a ian
Region, bu only on he assump ion o ze o
ecological o o he eal bu dens, o example
in as uc u e cos s.
5. Upda e o he Yea 2012
The economic analysis was execu ed in 2007,
when he eal es a e c isis was jus looming on
he ho izon, and did no ye a ec he applied
eal es a e p ice s a is ics. Real es a e p ices,
pa icula ly esiden ial eal es a e and plo s,
g ew sha ply be ween 2005 and 2008 (see
Fig. 2). The apid inc ease o eal es a e p ices
boos ed he building ade and in es o s'
p o i s. Inc easing esiden ial eal es a e p ices
a e 2005, coupled wi h s agna ion o en al
incomes, led o he decline o annual a es o
g oss eal es a e en al income, which was
e iden in he decline o he building cons uc ion
ac i i y. The dec ease o eal es a e p ices
con inuing om 2008 un il he p esen ime
EM_02_14_zlom 4.6.2014 8:54 S ánka 39
Ekonomie
40 2014, XVII, 2
somewha cu bed he all o en al incomes, bu
only by a ew pe cen age poin s (compa ed o
2000, he g oss annual e u n a e is lowe by
app oxima ely one hi d, and he ne e u ns –
capi aliza ion ell e en sha pe (because
main enance, adminis a ion and ope a ion
cos s g ew as e ). The all o eal es a e p ices
since 2008, di e en ia ed acco ding o he eal
es a e ype, led o a decline o in es men s and
dep ession o he building indus y. Public
sou ces (namely EU g an s, no as much
go e nmen spending which is being cu ailed)
and he Czech Na ional Bank policy o "cheap
money" esul ing in a dec ease o mo gage
a es seem o o se he decline in comme cial
in es men s. The p incipal cu en esul o his
pa icula mac oeconomic policy mix is a g oss
domes ic p oduc decline, and mos no ably
adec ease o amily consump ion and a enua ion
o he in es men po ion o public budge s.
Abundan ly a ailable eal es a e ep esen s
a u u e bu den, as he si ua ion ends o u he
dep ess ma ke p ices. The e ec i e use o
olde comme cial eal es a e wi h high
ope a ion cos s and excessi e p opo ion o
econs uc ion cos s is di icul unde hese
condi ions. This applies o b own ields di ec ly.
Fig. 2: The de elopmen o selec ed eal es a e indexes in he Czech Republic
Sou ce: Czech S a is ical O ice, Regional In o ma ion Ins i u e, L d.
Following he A-B-C si e classi ica ion in
2012, a decline in saleabili y o all si es can be
expec ed, coupled wi h he dec ease o he
saleabili y coe icien and lowe e u n on
in es men ( he decline in ne e u ns). The
decline a e is de e mined pa icula ly by he
decline o capi aliza ion ( he annual e u n a e)
o comme cial p ojec s, which is he highes o
apa men s (up o 20%), and es ima ed 10 o
15% o comme cial eal es a e, whe e i is
ob iously signi ican ly lowe o new
cons uc ions and signi ican ly highe o olde
comme cial eal es a e wi h high ope a ion
cos s and excessi e p opo ion o econs uc ion
cos s (which again applies o b own ields).
The c isis has a ec ed mo e deeply egions
wi h la ge sys emic p oblems: he Ús í Region
expe ienced he mo e p onounced decline o
ma ke p ices and saleabili y. The Sou h
Mo a ian Region belongs, on he con a y, o
he egions wi h he less p onounced decline.
The e u n a e by he egion is, on he o he
hand, highe in he Ús í Region, bu he
( ela i ely) highe e u ns he e come wi h
EM_02_14_zlom 4.6.2014 8:54 S ánka 40
Economics
412, XVII, 2014
highe en e p ise isks and he deepe
dec ease o eal es a e p ices, and he e o e
wo se u u e p ospec s.
Fu he changes since 2007 necessi a e an
upda e o loca ion signi icance o indi idual
si es ela i e o new de elopmen hubs and
co ido s. This conce ns p incipally si es nea
he highway D8 in he Ús í Region and p oximi y
o he Îa ec-Ha aÀ-Lo osice indus ial zone,
whe e he supply o g een ield cons uc ion
plo s dampens he in e es in b own ields. The
Sou h Mo a ian Region is in a mo e s able
si ua ion.
Impac o he economic dep ession on com-
me cial eal es a e and concomi an inc eases
o en e p ise isks lead o he conclusion ha
he limi alues o he saleabili y coe icien –
asyn he ic c i e ion o he assessmen o si e
de elopmen po en ial – will equi e an
adjus men . In he cu en si ua ion i would be
app op ia e o mo e up he limi alues o he
saleabili y coe icien o A-B-C classi ica ion
( o he ca ego y A g ea e han 1.1 e c).
The cu en b own ield ma ke is e y
na ow, i no dead. Mos b own ield si e owne s
ha e no choice bu o wai un il he si ua ion
imp o es, while in many cases hey will ha e o
adjus hei expec a ions o he income om an
e en ual b own ield sale.
6. Adjus men o G an Funding
P og ammes o he B own ield
Regene a ion
The app oaching end o he 2007–2013
p og amming pe iod will ma k he conclusion o
he i s , and likely he las , massi e in lux o EU
unding in o he Czech Republic. A pe iod o
in ensi e p epa a ion o unding p og amme s
o he suppo o b own ield egene a ion
anspi ed in 2006 du ing he ime o apid eal
es a e p ice inc eases. Owne s, de elope s
and in es o s we e a ac ed o in es men in o
b own ields, and unding p og ams we e
supposed o accommoda e he p ocess. In he
inal e sion o mos p og ams, de elope s
we e excluded om g an unding o b own ield
egene a ion p ojec s, and he p inciple o
unding gap was abolished. In addi ion o g an
unding p og ammes o b own ield ede elop-
men , he Real Es a e P og amme, a pa o he
Ope a ional P og amme En e p ise and
Inno a ion (Podnikání a Ino ace), has become
he mos signi ican b own ield egene a ion
p og amme. To-da e he Real Es a e
P og amme has alloca ed CZK 11 billion, he
majo i y o which had been used o comme cial
eal es a e egene a ion by small o medium-size
manu ac u ing businesses. Aside o he Real
Es a e P og amme, o ganiza ions go e ned by
public law, namely municipali ies, can also
acqui e g an unding o b own ield egene a ion
h ough egional ope a ional p og ammes.
Howe e , he p ojec numbe s and alloca ion
amoun s in hese p og ammes a e signi ican ly
lowe . G an unding is also u ilized o
econs uc ion o egene a ion o a ms o
ag ibusiness h ough he Ru al De elopmen
P og amme (P og am oz oje enko a).
I is impo an o poin ou ha he g oup o
b own ields iden i ied in he Sea ch S udy o
2007 does no o e lap wi h he g oup o b own ields
co e ed by g an unding p og ammes almos
a all. The eason is ha g an applican s, mos
o en en ep eneu s, a e in e es ed in business
p o i abili y, and i hey op o b own ield
egene a ion, hey p e e well loca ed si es ee
o obs acles in he o m o massi e con ami-
na ion o p ope y igh s complica ions.
Consequen ly he g an unding suppo s mos
o en he egene a ion o A- o B- ype si es,
which heo e ically would no need such
suppo , o i could be e ec ed in ano he han
di ec inancing o m. The only Regional
Ope a ional P og amme in he Mo a ian-
Silesian Region in ended o p e- ede elop-
men o b own ield si es ia demoli ions and
land eclama ion, which could be applicable
also o C- ype si es, is no achie ing
success ul alloca ions.
Conclusion
The economic s udy o b own ield ede elop-
men po en ial in he Ús í Region and he Sou h
Mo a ian Region has shown ha C- ype si es
a e he mos p e alen b own ield ca ego y. In
s uc u ally challenged egions his ca ego y a
ou numbe s he ca ego y B. Economically
s onge egions ha e a highe numbe o
B- ype si es, ye only app oxima ely 10% o
b own ields all in o he ca ego y A, which
co esponds wi h he es ima e gi en in he
abo e quo ed eigh ies F ench egene a ion
s a egy. Con empo a y unding p og ammes
a e adjus ed in such way ha hey suppo
namely " eady" egene a ion p ojec s, o en on
EM_02_14_zlom 4.6.2014 8:54 S ánka 41
Ekonomie
42 2014, XVII, 2
A- ype b own ields. This app oach, whe e
egene a ion is suppo ed by p ojec selec ion
ins ead o sys ema ically, ollows he egene a ion
pa e n ypical o Wes Eu opean coun ies in
he eigh ies. I is a na u al cou se o p og ess.
The Czech Republic will appa en ly miss he
chance o egene a e he p oblema ic b own ields
in he ca ego y C while he e is he oppo uni y
o d aw a la ge olume o inancial suppo om
he Eu opean Union. Public adminis a ion is
no eady o ake his s ep a any a e, because
sys ema ic b own ield classi ica ion was no
pe o med, p io i ies among he C- ype si es
we e no es ablished (The Ope a ional P og am-
me En i onmen (Îi o ní p os fiedí), on he
o he hand, has me i s goals in he clean-up
decon amina ion a ea, because classi ica ion
and se ing o p io i ies we e i s pa , and i is
no e en clea who should be pe o ming hese
asks. Only hope emains ha he unded
p ojec s con ibu e o a be e look o ou ci ies,
illages and landscape, and a leas pa ially
imp o e he si ua ion on he comme cial eal
es a e ma ke . Municipali ies will be le wi h
anumbe o p oblem si es wi h many ecological
and o he bu dens dep essing he alue o eal
es a e in hei neighbou hoods. Fo he sake o
u u e, when massi e public suppo o
egene a ion canno be expec ed, i is desi able
ha sys em measu es a e pu in place ha
would assu e mo e e ec i e suppo o
b own ield egene a ion, o example in he
sphe e o u ban planning and de elopmen as
well as in he iscal sphe e.
The ou come o P ojec NPV II No.
2D06025 "New Ins i u ional Ins umen s o
Land De elopmen and Plo P epa a ion in
P oblem A eas Focused on Re i aliza ion o
Unused Buildings and Plo s", sec ion Economic
analysis o de elopmen po en ial o
ab own ield sample in he Ús í Region and he
Sou h Mo a ian Region, execu ed in 2007,
adap ed in 2012.
This pape was suppo ed by he Minis y o
Educa ion, You h and Spo s wi hin he
Ins i u ional Suppo o Long- e m De elop-
men o a Resea ch O ganiza ion in 2014
(School o Business Adminis a ion in Ka ina,
Silesian uni e si y in Opa a)
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