Optioneering

Link

Available on request at Arcadis NL (contact eric.schellekens@arcadis.com or Jolijn.posma@arcadis.com)

Description

The optioneering session is a city district specific session in which ways to increase climate resiliency of a specific city district are identified. Not in a ‘regular’ more traditional way, but in a way that supports cities to accelerate and fulfill city’s ambitions. As a result the ‘optioneering’ enhances quality and livability, raises attractiveness for investors and reduces risks of (climate change related) shocks and stresses.

The Master Session Optioneering is a recently and successfully applied methodology, based upon lessons learned in a variety of proven cases. The Master Session Optioneering will be customized to city specific needs and could be seen as an additional module within the e-guide.

Optioneering can be defined as a methodology to identify breakthrough projects, e.g. feasible and bankable city district developments to raise city’s resilience level. In these optioneering sessions the Bankability Resiliency Tool (BART) will be used to support the session.

Applying an optioneering session will:

  • Identify highly ambitious feasible breakthroughs to raise city’s resilience level;
  • Identify most effective ways to become resilient in time, e.g.  in order to:
    • raise livability level;
    • raise investment level;
    • reduce risks related to climate change;
    • avoid huge future socio-economic losses;
  • Identify main partners to cooperate with to make the breakthroughs real;
  • Create committed future partners for breakthrough projects.

The flowchart below shows even more city-specific and ambitious purposes for the Optioneering session.

optioneering-flowchart

Use in decision framework

 Select adaptation approaches
 Getting commitment for adaptation approaches
 Generate options for adaptation approaches
 Assess adaptation options

Input

Information needed in preparation of an optioneering session:

  • An overview of all developments planned and money flows; currently and planned.
  • Existing ambitions of the city (district) and plans/visions regarding resiliency, and social issues.
  • Furthermore, it is relevant to know how the city performs on resiliency in relation to similar cities.

Documents to consider:

  • Strategic documents and ambitions; such as Master Plan, Resilience strategy (or sustainability strategy/plan), City district ambition documents, Climate adaptation and mitigation plans, and Strategic city development.
  • Documents about developments: such as an overview of plans and projects in the city district (running and planned, if possible with expected investments and stakeholders), and/or documents about urban planning
  • Documents on vulnerability of the city: e.g. floodmaps, documents about social issues and/or city (district) challenges
  • Facts and figures; e.g. the most important stakeholders in the area, operation and maintenance plans.

Outline

The purpose of the Optioneering phase of the Resilience Pathway is to identify a portfolio of promising, bankable (meaning fundable and/or investible) and feasible business models around a development or a blend of developments. The figure below shows the optioneering phase (second circle) within the Resilience Pathway.

optioneering-2

Optioneering step-by-step approach

Preparatory activities

1.    Reflect on vulnerability assessment of the city (e.g. IVAVIA results); identify most vulnerable areas for shocks and stresses of climate change.
2.    Select most vulnerable areas where public and private developments are either started and/or planned (city agenda and area dynamics).
3.    Consult the city council to prioritise focus area(s) based upon vulnerability level, dynamics, and high level ambitions.

Optioneering session

4.    Identify key challenges and developments within the focus area(s)
5.    Identify all relevant stakeholders within the focus area(s) and prepare invitations for the  optioneering session
6.    Collect all relevant data regarding the focus area(s) (e.g. maps, facts and figures, investments)
7.    Arrange logistics for the optioneering session
8.    Develop time schedule and contents for the session
9.    Facilitate the optioneering session (including design, adaptation options, value adding and capturing, financial arrangements)

Elaborating the results

10.    Elaborate the results in an Investment Opportunity Report
11.    Discuss next steps with the city and committed stakeholders

In the optioneering phase, high-level engineering and financial thinking is integrated to identify feasible and bankable developments, while unlocking finance for resilience. This phase might also provide alternative routes to meeting climate and other objectives of projects that will be attractive to private and other investors.

Building blocks of optioneering

  • Adaptation options. Involves defining and designing at a high engineering level the development in a way that is effective, profitable, and fundable, while also meeting the ambitions and respecting the parameters identified during the scoping phase.
  • Financial arrangements. Fundamental to fundable and profitable solutions identifying socio-economic losses and benefits from the various options and to develop suitable financial arrangements for promising options, to test whether these financial arrangements align with the interest of investors and meet the needs of clients and to reduce risks.
  • Framework conditions. Tests whether the options identified fit in current framework conditions and or whether these framework conditions need to be modified.
  • optioneering-3

Output

The deliverables of optioneering are elaborated is a so-called Investment Opportunity Report (IOR) which encompasses:

  • An overview of challenging moments of change for focus areas;
  • promising bankability opportunities for focus areas, designed on a canvas;
  • proposed financial arrangements;
  • follow up steps.

Experiences

Vejle

After launching its Resilience Strategy the city of Vejle started immediately a process to make the strategy real and projects executed. Being defined by 100RC as a ‘lighthouse’ the City of Vejle is expected to become one of the frontrunner cities regarding climate change adaptation. A Resilience Pathway Accelerator sessions has been organized in which Vejle identified promising, viable and bankable opportunities to transform two of its city districts.

Several lessons have been learned. It became clear manageable chunk investments in blue green infrastructure ensured return on investment. The importance of timing became clear, bringing forward future income stream in blue green infrastructure. It also became clear a dedicated area fund would support private sector investments, because it ensures public investments beyond election periods.

Rotterdam

One of the lesson learned from the redevelopment of the old industrial harbor area in the ‘Kop van Zuid’ in Rotterdam is: Reallocate public buildings (e.g. municipal buildings) to the harbor area to catalyse investments and to ‘practice what you preach’. Most times, the hardest part of redeveloping an old industrial area is to mobilise the first investments into the area. This issue can be solved by being, as a municipality, the first investor yourself. Moreover, reallocation of municipal and public buildings to the area will increase movements and people in the area.

Bristol

Bristol City council identified the core function of Spike Island goes far beyond the land itself; as a metaphor Spike Island could be seen as the compass of the city. Being the area to make many city districts and attractive areas in the surrounding walkable or ‘bikeable’. Because of logistics, the current state and the energy already there, the area near to the lock gate could be the area to focus upon first.

Politicians and stakeholders need to be convinced first of this key quality of Spike Island, engaging them to support small additional investments to stimulate first developmental steps.

After or parallel to initial steps a participatory process needs to be organized aligned to projects already planned around infrastructure; convincing stakeholders of the Spike Island opportunities, engaging them to agree with a value capturing approach to transform Spike Island.

Bolton Town Centre (Greater Manchester)

To create a resilient Blue Green Bolton, a detailed design and business model is needed. Bolton Council has £1bn available to redevelop the city, including five selected neighborhoods. The first step is focused on make sure that stakeholders (public and private) have an opportunity to have their say in which measures needs to be taken according to their own needs, before any decisions are made. The five neighbourhoods have all their own focus area, demands and wishes so it is important that the potential partners agree to participate. The next step will be creating different scenario analysis. These analyses are a way of structuring thinking about the future, identifying potential problems and of increasing preparedness to handle them. Outcomes are visible given the different scenarios envisaged and so are the paths that lead to them from the current situation, giving an organization more scope to refine and adjust plans accordingly. This will help the partners to move to step 3 and 4: divide the responsibility and accountability and start with a MCA and BART to select which measures are needed to be implemented.