Flagship Development in Transitory Cities – The Case of Bucharest

Executive Summary The following paper will analyze the main issues with investments in flagship projects in transitory cities, with special attention given to the new national Romanian Stadium “Lia Manoliu Arena” in Bucharest. The need for this research arises from the nature of transitory cities. The communist regime has given different development opportunities for Eastern-European cities and now, twenty years after the fall of the Iron Curtain, there still is the need for these cities to keep up with Western-European cities. Competitiveness is becoming more and more an issue in the globalized world and transitory cities need to reach the levels of Western-European cities, as well as remain competitive and develop further. It is therefore that flagship projects are implemented in these cities. Examples are not only to be found in Bucharest, but also in other cities such as Prague or Warsaw. This paper will analyze the main parties implicated in the process as well as the three main angles from which one has to operate in order for a project to be successful. These will be applied to the main empirical example, namely the “Lia Manoliu Arena”, as to understand the main issues with these projects and whether they are able to improve a city’s competitiveness. The research conducted has been done in order to analyze the topic of flagship projects in transitory cities into detail. It is of great importance to focus not only on accepting cheap projects from financial perspectives, because otherwise it will be impossible for private actors to invest in the immediate vicinity of the project. Furthermore cheap large-scale projects can be detrimental towards the aesthetics of a city, which will afterwards affect the happiness and living standards of the citizens. A further aspect to be taken into account is that most of the investments are only coming from the public sector. This is in accordance with the nature of the flagship projects. Most of these projects imply very high costs in the first period, but low dispersed revenues. The implications are vast, as from an economical point of view; such projects would never be feasible. Therefore the public sector is the only one willing and able to invest in such large-scale projects, albeit some are not public goods, e.g. stadia. Besides understanding the implications of the factors affecting a flagship project’s success, the parties involved can have an important say in the matter as well, as not only the public sector is affected by flagship projects but also the community and the private sector.