Station areas are organic and locally driven entities

Experts from MDI and FCG have been exploring models for the development of station areas, op-portunities for EU funding and ways to projectise the development work of different types of station areas during the autumn.  

This study is part of the ‘Urban Regions’ Vitality’ theme network project, which includes a sub-project focusing on developing station areas through business cooperation. The work has been conducted in collaboration with the MAL network. The results are based on data collected from interviews with representatives of station areas, VR real estate ownership, Senate properties and the business community. During the autumn, two workshops related to the topic were also organised, the first focusing on drafting a roadmap for EU funding and the second specif-ically on projectising smaller station areas. 

In this blog post, we present the results of the work and provide recommendations for development, EU funding and projectisation. 

Challenges and targets for the development of station areas 

Station areas share common challenges, evident in the similarities between fast and slow develop-ment targets. Quick targets typically include minor beautification measures, zoning and the devel-opment of individual entities like travel centres. Slow targets usually involve extensive initial capital investments and large-scale infrastructure modifications. 

The progress of development can also be slowed by the differing levels and pace of stakeholder engagement. The business community may not, for instance, be ready to invest even if zoning allows for development activities. This highlights the need for coordination. In the absence of unified de-velopment models and agencies, coordination is done locally. 

The government’s strategic decision to largely divest itself of station property in station areas and shift towards being, primarily, a passenger operator, signals that there is an even greater need for property ownership and management at the local level in station areas. 

The slow recognition of the need to re-develop station areas in the 2010s is evidenced by the fact that many station area development projects are still in their early stages. Future development targets and goals are likely to focus on core station areas. It is here however that the interface between private and public development often becomes prominent. 

Station areas are not however the only development focus for cities and the business community, even though they are important and often attract special development attention. Moreover, while station areas may not always appear attractive in investment terms if their primary function, that is, to service rail traffic, is no longer applicable, they nevertheless remain important from the perspective of business entities. 

Boosting development with EU funding 

As national development resources decrease, it is possible to supplement them with EU funding, especially international EU programme-related funding. Thus far however, station areas have them-selves utilised EU funding opportunities only to a limited extent. The process of applying for funding is perceived as burdensome, while the threshold for using it is high. In terms of station area devel-opment, EU funding has primarily been utilised in the form of project funding offered by regional councils. Once the application threshold is crossed however and EU funding is applied for and ob-tained, experiences with the funding and its various processes have been positive. 

The first steps in respect of obtaining EU funding require national-level solutions for joint develop-ment work in station areas, as well as local investment in terms of strategic planning to better utilise the funding. In the medium term, project activities could grow as a result of coordinated develop-ment work, while station areas could more actively seek to develop join international networks. In these networks, they could highlight their strengths, for example, in green and digital transitions, as well as in achieving carbon neutrality and managing the energy transition.

Recommendations for Development Activities 

Recommendation 1: Towards a More Holistic Approach to Development 

In terms of holistic development, the process of ‘developing’ should be a common endeavour for all. Station areas are part of a cohesive travel chain and offer a striking experience for travellers. Functionality and experiential aspects are considered in the mutual cooperation of public entities and in the collaboration between private entities. Relevant partner organ-isations participate in the development process at an early stage and support the identifica-tion of the best local solutions. In terms of development cooperation, the future aim is to utilise tailored development models for differently-sized station areas, such as the alliance and corporation models. 

Recommendation 2: Fully Utilise EU Funding Opportunities 

The second recommendation is to fully utilise EU funding. This means integrating EU funding opportunities more closely with every development phase of the station areas. By fully uti-lising EU funding opportunities, station areas would use their own development visions and key development themes as guidelines for seeking funding. As part of utilising these oppor-tunities, various types of actors and forms of cooperation would be an essential part of the overall development. 

Recommendation 3: Systematise the Application for EU Funding 

The third recommendation is to systematise the application for EU funding. Initially, it is cru-cial to create a network-like form of cooperation to better utilise and coordinate EU funding. Early actions in 2024 could, for instance, include creating a national level cooperation struc-ture for project collaboration and coordination, while at the local level, issues relating to project preparation and defining a strategic project portfolio should be addressed. In the long term, from 2025 onwards, monitoring activities and sharing information will be systematic and operating in international networks will become routine. From 2028 onwards, utilising EU funding and international network cooperation will be an integral part of the develop-ment activities of station areas. 

Recommendation 4: Explore the Establishment of a Real Estate Development Company for Station Areas 

In relation to the most significant change relating to these station areas in the coming years, namely, the state relinquishing most of its real estate in these areas, it is recommended that the setting up of a corporate entity to continue smooth development operations is explored. Such an organisation would manage, develop and maintain the real estate of the core station areas. A corporate entity could create structures for development activities and could be responsible for real estate development in more than one station area. The development company could be publicly owned or consist of publicly owned entities, such as municipalities and cities. A corporate form of entity would also enable cross-development of the involved station areas and would solidify the concept of a travel chain as part of these ongoing devel-opment activities. The recommendation for a corporate and publicly owned structure for real estate development in the core station areas across multiple locations arose out of a series of interviews and workshops with station area experts. 

Authors

Henri Helve, Specialist, henri.helve@mdi.fi

Jaana Myllyluoma, Senior Specialist, jaana.myllyluoma@fcg.fi

Reference

Development of station areas through business cooperation – cooperation models and financing