CHiFA Co-Founders Bonnie Burnham and Gary Hattem participated in the 17th World Congress of The Organization of World Heritage Cities. They shared valuable insights drawn from extensive experience and research on public-private partnerships. They focused on strategies for fast-tracking heritage-led solutions in historic cities, with a focus on sustainable development and cultural heritage preservation.
The Congress brought together city leaders, heritage professionals, and policymakers from around the world, fostering a global dialogue on the future of our shared heritage. Read their prepared remarks below.
Gary Hattem: Panel
I am representing the Cultural Heritage Finance Alliance – more easily referenced as CHiFA.
We are a New York City based Non-Governmental Organization that came into existence with the explicit strategy to advance opportunities for heritage sites and districts to provide for renewed investment and long-term sustainability. Our model facilitates a broad stakeholder approach to regeneration that engages governments, local communities, philanthropy, other non-governmental organizations, and the private sector.
Our early research yielded key factors for places that succeeded in achieving a new trajectory of renewal and resilience:
1) Leadership is key to success and having a charismatic champion to rally interest and resources can come from any sector including NGOs , the private sector and government . Historic places and sites have passionate advocates for their survival which needs to be harnessed.
2) Initiatives need to be vested in a framework of Measurement to ensure progress can be assessed on key social, environment and financial outcomes especially as emerging impact investors are seeking more than a simplistic return on capital.
3) Attracting private capital into unproven markets and places requires some level of Risk Mitigation. Whether subsidies, guarantees, subordinated debt or below market rate loans; governmental and philanthropic capital can be the catalyst for drawing new private investment to projects.
4) Building trust among diverse stakeholders requires a governance model with full Transparency at its core as to how decisions are made, how resources are invested and how returns are distributed.
Our president Bonnie Burnham comes from many years as the president of the World Monuments Fund. My own background as a city planner and former managing director at Deutsche Bank, provided me with the opportunity to put capital to work to grow mission -focused enterprises and to finance place-based projects and initiatives.
Many applicable tools and strategies, that I believe are relevant to meeting your cities’ challenges, were originated at a time of historic disinvestment and decline in New York City. In the mid 1970’s and 1980s the city was forced to declare bankruptcy and property abandonment led to the City itself foreclosing on properties for non-payment of real estate taxes –making it the largest property owner and landlord. Entire neighborhoods disappeared with certain landscapes in places like Harlem and the Bronx resembling Dresden after WW II.
The desperation of the situation stimulated an era of civic innovation that informs much of the DNA of bourgeoning field of Impact Investing that is currently addressing global challenges from poverty alleviation to climate resiliency to gender equality with new models of public/private partnerships.
We believe that many of your heritage sites and districts can deploy some of these fundamental approaches:
1) Engaging residents is key to defining a path forward that acknowledges the local community as a key constituency. Goals need to be defined that address their everyday needs; from improved public services to affordable housing options, to expanding green public spaces to employment and business startup opportunities, to new transportation modalities. Projects that recognize these objectives have residents working as partners and represent the social equity that mitigates risk and builds long term trust.
2) Private sector engagement and the provision of new financing is key to regeneration initiatives. New models have been developed with strategies that recognize the need for risk mitigation. While banks don’t instinctively work cooperatively, local leadership can help instigate new vehicles where shared risk by a consortium of banks can move projects forward without one institution alone taking on full risk. As well, bringing entrepreneurs to the work requires an understanding of market opportunities and well-crafted partnership agreements.
3) Government can play a key role in catalyzing private sector investment through the provision of subsidies, guarantees, early-stage seed capital, debt forgiveness and tax abatements. In the depth of the NYC abandonment crises, the City took the unprecedented step of floating municipal bonds to finance the restoration of abandoned properties as a long-term resource of affordable housing that remade entire neighborhoods. Public monies can importantly serve as the first-in capital that has a more patient timeline for repayment and an appetite to take greater risk than private capital markets.
4) New types of development vehicles that leverage the know-how and resources of residents, government and the private sector can bring a new entrepreneurial approach to overcoming challenges, moving projects forward and ensuring their long-term sustainability. In the US, community development corporations, business improvement districts, community development finance institutions and social impact bonds have yielded a new play book for urban revitalization. Globally, development banks and philanthropy are actively investing in these new vehicles known as social enterprises to further leverage their funds by participating in blended financing vehicles and investing equity in everything from microfinance institutions to initiatives that provide health care and educational services to the poor to small scale renewable energy projects.
CHiFA believes that the long- term viability of our historic places requires a vision of habitability that is equitable and vested in the self -interest of the local community. Collaboration across sectors has to be based on trust, transparency and a common vision. Innovative new vehicles for implementation of project goals may require new governance structures with government authorities being equal among broader stakeholder groups.
Bonnie Burnham: Closing Session
Thank you very much to the Organization of World Heritage Cities and to our host city Cordoba for inviting me and my colleague Gary Hattem to join this gathering, which has been a rich contemplation of a future strategy for livability in cities on our planet. Your World Heritage member cities having of course a special meaning and character for all people, and with that privileged status comes the obligation and opportunity to set the livability and sustainability standards for other cities around the world.
I represent the Cultural Heritage Finance Alliance, a US non-profit organization. CHiFA was created to address a funding gap that makes it difficult to create a systemic, integrated approach to heritage management, and represents a barrier for heritage preservation to be widely embraced as a goal of sustainable development and supported by private finance and large scale funding from non-governmental sources. Our goal is to facilitate the creation of heritage conservation projects that engage blended capital finance – the watchword of financing sustainable development – meaning funding from governmental, inter-governmental, philanthropic, and return-seeking private investment, each with a different delivery vehicle and a different expectation of outcomes and returns on investment.
This conference is the culmination of a dialogue that began with the World Heritage Cities secretariat and the Cultural Heritage Finance Alliance a couple of years ago, when you were preparing for your last meeting in Quebec. It is clear now at this meeting how far your Board, advisory committee and Secretariat have taken this discussion with the adoption of your 4 strategic axes and through the discussion that has taken place here. CHiFA hopes to be part of the action plan that will shape your future discussions. Gary Hattem has already spoken in the workshop on mobility and I would like to expand on his comments from the viewpoint of a US organization.
From my experience, sometimes big challenges and big opportunities occur in tandem. A great meltdown occurred in New York in 1975, during a time of recession when the city went into bankruptcy, together with many of its residents whose properties then went into public ownership. Ultimately it was bailed out by private finance, which came to the rescue with development bonds and saved the day. This emergency coincided, serendipitously, with the celebration of our U.S. national bicentenary in 1976. This convergence led to the development of new finance tools for cities in America, which have strengthened our capacity to guide and steward their development and to protect our urban heritage as the backbone of sustainable growth. The enactment Federal Historic Preservation Tax Credits was one of those visionary programs. It resulted in the blossoming of non-profit initiatives in cities across the country to take advantage of and complement this governmental investment. It led to wide investment in the reuse of heritage buildings and the revitalization of historic city senters. Some of these initiatives are based on unique US tax structures, and they couldn’t be easily replicated elsewhere. But others are precedents that could be more widely used. One is the heritage revolving fund, of which there are now more than 50 in the US, at least one in every state, that make a pool of funding available to property owners at low cost to ensure that they can comply with local regulations and take advantage of national incentives.
As we know, heritage preservation is not just the conservation of individual buildings. From my own experience — as the long time president of the World Monuments Fund — I can attest to the challenge and necessity of going beyond the identification and conservation of monumental heritage sites, to ensure that these investments in places and monuments result in their remaining relevant and continue to thrive. And so at CHiFA, with a goal to achieve heritage sustainability, we began by researching both international precedents of heritage-led regeneration and US community development initiatives that show promise for wider applicability and impact. We were particularly struck by the model of Living Cities, a network of US cities that needed to discuss economic disparities. Some of the world’s largest banks and foundations developed a partnership to put this discussion into action and Living Cities was born. Initially it developed two vehicles. The first is an accelerator – which borrows from a Silicon Valley model of fast-tracking innovative start-ups to ready them for capital investment. The Accelerator mentors each of its participants to develop a consensus-building strategy for its community, and at the same time it provides collaborative learning opportunities with the goal of increasing the participants’ capacities to access to potential sources of capital. During the Accelerator, participants work together to each articulate their own Pilot Projects. Then, to launch these projects, they have access to a Catalytic Capital Fund that provides early stage, lower cost, flexible financing to backstop more conventional investment.
Our plan is to launch this model — of the Accelerator and Catalytic Capital Fund — to benefit a pilot group of international projects in historic cities as and inaugural class of “Heritage Innovators”. The process deploys standard design thinking methodologies, organized toward a goal through a series of rational steps. Accelerator mentors help the participants articulate their goals, develop strategies toward reaching them, project the expected outcomes, and the present their synthesis to an audience of potential investors, enablers, and the interested public.
We hope we will be able to work with a cohort of World Heritage Cities to develop this program and to achieve meaningful progress through it in order to create successful approaches to the issues identified as the 4 Axes of the New Urban Project of OWHC.
In addition, we hope this vehicle will produce a group of compelling success stories, that not only demonstrate the results of good practice, but also contribute meaningful data to argue the case of the key role of heritage in achieving urban sustainability. This case, in my view, has not been made effectively enough to influence decision-makers, private investors, and the general public. From my viewpoint, that would be success.
I will close in saying that although the issues we have been discussing here — how to return showcase cities to comfortable livable human habitats — sometimes seem complex and intractable –- I believe there is impressive positive change happening. I have seen it over the last week as I visited cities in Europe for the first time in several years. I found far less traffic in the historic centers, cleaner air, and people enjoying themselves in leafy open space that didn’t exist before. Bicycle use, bike lanes, improved public transit options, and more public space for personal use – these innovations may be in part the legacy of the pandemic and a manifestation of our concerns about climate change. But these challenges are resulting in new positive public thinking and public-sector decision making. That new thinking has been evident in the presentations at this conference over the last few days.
We need to be sure this kind of public thinking is made available to people everywhere, throughout the world, not just in our most prestigious cities. I am sure that is the explicit and implicit goal of the World Heritage Cities organization. I salute your efforts, look forward to the next phase of your progress, and thank you for including us in your discussions.
