Working at Scale
Category Property News
Winter, 2021
In March, former Deputy Mayor Belinda Scott announced she was leaving the eThekwini Municipality to join Jonny Friedman's inner-city property regeneration company Urban Lime. The partnership offers prospects. One is a seasoned politician, the other an experienced businessman. The announcement comes at an interesting time. The commercial market has been pounded by the Covid pandemic and while the hustle and bustle has returned to the streets, there are swathes of vacant offices.
Friedman developed a reputation for property revamps in London in the 1990s, and after investments in Cape Town, turned his sights to Durban. Amongst the successes has been a make-over of Florida Road and the creation of a legal quarter around the old Nedbank building on Anton Lembede Street down from the City Hall.
Today the Urban Lime portfolio is 125 000m2, with over 50% of the R2,5-billion investment
in Durban.
Friedman is as affable as he is astute, a property entrepreneur able to do projects at scale.
During Scott's brief tenure as deputy mayor she was roundly applauded for social projects, especially involving the homeless. A straight shooter, Scott is a career politician known for grilling spendthrifts in government. Before being deployed to the eThekwini Municipality by the ANC she was KZN's no-nonsense MEC for Finance. Her executive role ended a parliamentary tenure of almost three decades.
Q What prompted the move?
Belinda Scott: Jonny and I synced around issues of inner-city regeneration, which is critical to Durban. I have always loved the built environment and I'd like to make the inner city a place not just for business, but for living too. It has beautiful infrastructure and is the face of eThekwini, but after-hours in the CBD is dead quiet. It has so much promise and we need to realise this opportunity. When I served on both the National and Provincial Housing Forum I saw massive degradation in cities and how badly this impacted on the economy, ranging from problems around the uncontrolled spread of informal settlements to immoral and illegal landlords charging the indigent rental on invaded property. We have to address these challenges to raise investor confidence. More inclusive development means less crime and more tenants paying rates while raising the quality of life of all citizens, rich and poor.
Jonny Friedman: Belinda has a set of skills and reach that complement Urban Lime. She is at the heart of the type of partnerships I see necessary to positively impact our cities. The sweet-spot in these public-private partnerships occurs when they are well thought out and leverage the experience and knowledge of each partner. No single company is going to turn Durban into a modern and smart city. It will take a change in investor perception and so we need partnerships that work powerfully and efficiently to do that.
Q What is the opportunity in Durban?
Jonny Friedman: There is an enormous amount of work that needs to be done in Durban, but when I look out of my window I see a city with world-class views, a great climate and prices that are materially out of tune with cities elsewhere in the world. Walking on the streets I see a cosmopolitan mix of people in the high street, people shopping and doing brisk business. It is a myth that Durban's CBD doesn't have successes as I encounter them every day. It is buzzing with a sizeable and vibrant formal and informal economy and masses of consumers. You will also find exciting entrepreneurs and many youngsters hustling as they do in New York, London or anywhere else. There are of course legacy issues and challenges such as the big distances people need to travel from home to the city but I'm excited about innovative ways in which we will respond.
Belinda Scott: My involvement in the built environment goes back to when I first started in the KZN Provincial Legislature in 1994. I sat on the Cato Manor Development board for 10 years which was responsible for the first inner-city housing project in South Africa. It is a concern that we are not providing facilities that are desperately needed by the disadvantaged masses, mindful that the backlog will never be eradicated in the short to medium term. And this is not a task the government can do alone. If you look at the problems of urban sprawl you can't get away from the fact that one of the solutions is in-situ upgrades to informal settlements and fixing existing buildings in the CBD. One challenge is the damage and degradation to city infrastructure, which is appalling in places. The reality is that there aren't enough places for people to live close to work. We have to provide alternatives in the CBD and in doing so we need to make the city a much more attractive place for a wider group of people. People often talk about grime in the city, which is usually as a result of insufficient infrastructure to support the number of people living or trading in this space. But at the end of the day, there is more opportunity than challenge. We can be a successful city. Walk around the City Hall. You won't feel threatened, you will feel the energy and the vibe.
Q How are you responding to Covid, how much is tenancy down and how do you turn things around?
Jonny Friedman: We are responding to every facet of our business, real estate and how people will want to work and live in the future. Headquarters - and in particular the more modern and hi-tech buildings - will need to be reconfigured as it is too risky for an employer to house all its staff together for health reasons. Headquarters will need to become partially decentralised. Critically, post-Covid cities are going to see more connected neighbourhoods with a much stronger emphasis on mixed-use buildings. I think there is going to be a transport revolution and ultimately a lot less space for roads and parking which means a lot more space in Durban that can be reworked for other purposes. One of the things Belinda looked at when she was deputy mayor was the rates rebate incentive programme for investors and it brought some relief to inner-
city landlords. Her response talked directly to inner-city regeneration. The city had a good policy but it benefited only new builds in uMhlanga where development was happening anyway, rather than regeneration of the inner city. Belinda was very quick and well directed around a set of objectives and delivered efficiently by pulling together the public and private sectors. We need
more of that.
Belinda Scott: A vibrant city has to deal with social ills and you can't fall over your feet doing that.
Homelessness, for example, is an issue we've had first-hand experience with in the run up to the Covid pandemic and at the height of the lockdown. We responded together: the city, Urban Lime, key NGOs, DUT, private medical practitioners, FNB and many other private sector companies. We got the Strollers building in Mansell Road - a facility for 20 vulnerable women and children - up and running quickly with seed capital from FNB and the construction by Urban Lime. Covid provided us with a window of opportunity to set aside bureaucracy to protect the homeless and vulnerable. This is the sort of partnership we can use to deal with almost any urban problem. Any business that doesn't recognise the value in trying to cure social problems is shortsighted. A vibrant city that wants to thrive must take all the dynamics - social and economic - into account.
Q Has Urban Lime bought political influence in this move; is this an example of business and politics cozying up for mutual benefit?
Jonny Friedman: Belinda is not for sale. Her career is proof of that. Are we working with someone with vision and networks and the ability to draw it together and make it happen - yes.
Belinda Scott: There is always going to be criticism. I'm unapologetic about bringing business and city leadership together. Many companies are hard hit in this economy. If we are going to support business we must do that meaningfully. Urban Lime has put its money where its mouth is by investing well over R1-billion in a short period of time. I have been in the public sector for 2 years and have reached a point where I want to do more than exercise oversight over the public service. It's not as if others in the ANC haven't done the same and for the public good. Valli Moosa, one of the most successful ministers of local government, is an example. I remain committed to making our country a better place. I am doing what I have always done, but now in the private sector. Bridging the gap between the public and private sector is critical. There is a need to understand how political decisions and governance impact on the economy, and visa versa.
Q What do you predict Durban will look like in the future?
Jonny Friedman: You have to have tremendous patience with property. I want to see a change in perceptions. I want to see confidence in this city as a place to do business and invest in. I want to lead projects that are exciting - where change becomes a tipping point. The beachfront is an example of that. It is a fantastic asset and the best of its kind on the continent. If we can activate it 24/7 and extend that connection down to Rivertown and the ICC and integrate the city and the beach, we'll start seeing change on scale. We need a tactical urbanism movement around public spaces where we identify a host of small interventions, activations and spaces that can be changed without a lot of money and implemented rapidly that brings great public benefit.
Belinda Scott: The city has invested millions into key development nodes such as the beachfront, Moses Mabhida Stadium and the Point promenade. But there is a critical need to harness this investment to become an economic game changer. This can only be done with the buy-in from the city and the province, planning together with the private sector.
Author: KZN Invest
