Puerto Madero dates to 1889 as Buenos Aires’ first port, built in front of Argentina’s federal administrative center (Plaza de Mayo) and the President’s residence (Casa Rosada). The port was rendered useless to vessels several years after completion due to faulty engineering, sending the area into decline. However, in 1918, the municipality of Buenos Aires started the construction of a public promenade along the shore that would become the Costanera Sur. The Costanera Sur functioned as a popular public beach up until the 1950s when water pollution made it undesirable. Many plans have been drawn for the rehabilitation of Puerto Madero, but none were implemented to revitalize the site until the Puerto Madero regeneration project of the 1990s.
The scope of the Puerto Madero regeneration project went beyond the transformation of the formerly industrial port area. From the project’s conceptualization, the goal of political leaders and city planners was the revitalization of Buenos Aires’ southern area, which includes the national administrative district (Casa Rosada), and some of the oldest neighborhoods of the city.
The main objective was to urbanize 170 hectares of land formerly belonging almost entirely to the national General Administration of Ports (AGP, for its name in Spanish, Administración General de Puertos). The regeneration of Puerto Madero was touted as a pilot for Argentina’s state reform due to the area’s visibility. The project would regenerate the port area into higher-value land use and would also help revitalize the central business district. Puerto Madero was conceived as a catalytic project that would overcome years of disinvestment in the Buenos Aires CBD and change the public’s perception of the downtown area.
The idea of developing Puerto Madero’s vacant area was not new. All planning efforts for the city since the 1960s had included ideas about new uses for this centrally located land. However, none of these plans had ever been executed because there were too many administrative and financial challenges which prevented implementation, most notably, with regard to transfer of federal land to the private sector. The creation of a quasi-private organization to take ownership of the vacant land and oversee its development would facilitate mixed-use development with commercial, educational and recreational aspects.
Two feasibility studies were finalized before project implementation. The first study was conducted by the Centre for Transatlantic Sailings (Centro de Navegaciones Transatlánticas) in 1985 (Study of the National Bureau of River and Maritime Transportation) was done for the AGP. It evaluated the area of the Old Puerto Madero from an operational perspective. The study concluded that the design of the docks was too small in size for the ships-in-service, deeming some seventy-five per cent of the area as unsuitable from a capacity perspective.
The second study done by the University of Buenos Aires (UBA) in 1986 included the area of Puerto Madero, the strip by the river known as Costanera Sur and the reclaimed area of the nearby Ecologic Reserve. It described the uses proposed by successive plans, and mapped the tenancy to date. In addition, it gathered information on the heritage buildings (docks and institutional and recreational buildings of the Costanera Sur). This research delved into the preliminary ideas and paradigmatic patterns for land development. Furthermore, it outlined alternative access routes and a connection with the 25 de Mayo Highway, south of the property, which has not been solved to this day.
The first notifications of the project were released to the local media after the Presidential Decree in November 1989. This prompted a planning process that would culminate in the final draft of a Master Plan for the project in 1992.
The development of the Master Plan took place in stages, building on previous initiatives for the area. The planning process and redevelopment program as a whole was initiated following the socioeconomic crisis that ended President Raúl Alfonsín’s administration in 1989 and the privatization of public services and state property, which were key to the redevelopment project. In 1989 two contentious laws— the Administrative Emergency Law and the Economic Emergency Law— provided the enabling regulations to make possible the quick implementation of the Puerto Madero project. In addition, Presidential Decree 1279/89 established the Corporacion Antiguo Puerto Madero Sociedad Anonima (CAPMSA), the quasi-private corporation created to implement the project. The Economic Emergency Law allowed for the privatization of federal property, enabling a simplified transfer of national land to CAPMSA. Notably, this was accomplished without requiring normal legislative approval procedures. CAPMSA created to take ownership of the land conceived of the Master Plan as an instrument of negotiation with developers. In this regard, the plan was envisioned as more than a strict regulatory framework.
The first draft plan, the Catalan Strategic Plan for the Old Puerto Madero, was completed in 1990. The plan was the first to define a high-density residential zone in the eastern section in front of Costanera Sur with buildings of up to 25 stories. An intermediate area comprised rows of buildings perpendicular to the docks and a strip of commercial 20-story buildings opposite the docks (including offices, hotels and clean industry). The plan’s total built-up area was 3,500,000 square meters for the 42 hectares intended for subdivision, with an average density of 500 inhabitants per hectare. It included mechanisms to allocate parcels to different types of private partners for mixed-use development.
A public debate over the sustainability and merits of the Master Plan led to the Buenos Aires Municipality commissioning the Central Society of Architects (Sociedad Central de Arquitectos [SCA]) to organize a National Competition to produce the Master Plan for Puerto Madero in June 1991. A consultative body, composed by members of the corporation, Municipality representatives and the SCA, was formed to write the terms of reference (ToR) for the competition.
The ToR called for the redevelopment of the derelict area, and set a maximum land occupancy of 1.5 million square meters (the lowest of all the preceding plans for the area). It also emphasized the development of green spaces and direct access to the river. The area would be mixed-use, including residential, commercial and office space. In addition, the plan established the need to preserve the warehouses because of their patrimonial value.
There were 100 entries for the competition, among which three finalists were selected to work together and produce the final Master Plan. Meanwhile, the city rezoned the warehouse area to allow for mixed-use.
The Preliminary Urban Plan for Puerto Madero was presented in October 1992. Not surprisingly, CAPMSA managed to increase the total built-up area back to 3 million square meters, which was much closer to the total initially estimated density proposed by the Catalan Plan. Another significant strength of the final plan was that it was based on the existing regulatory framework. In April 1994, the plan was formally approved through Ordinance 001/94.
The plan was altered through a course of iterations as the result of dialogue with partners (e.g. international consultants, local professional associations, and organizations representing the users of the port area). However, the surrounding communities were not involved in the planning process through any participatory consultations because at the time Puerto Madero’s area was not residential. Consultation and project discussion did take place with the professional Chamber of Architects.
The Puerto Madero area is located in the heart of the Autonomous City of Buenos Aires (Ciudad Autónoma de Buenos Aires [CABA]), an independent district established by a 1994 Constitutional Amendment. It is neither officially part of Buenos Aires Province nor of the Province's capital. At the time of the creation of the Puerto Madero project (1989), Buenos Aires was a Federal District led by a Chief of Government directly appointed by the President of the Republic. In 1996, after the amendment was enacted, the first Mayor was elected.
The relevance of the initial administrative arrangement for Puerto Madero is that the city administration had a direct connection to the federal government during the conception of the project, as well as during the very first critical tasks such as the transfer of land to the administrative body. This arrangement changed though because, since 1996, CABA’s administration has been in the hands of the political opposition.
The implementation of Puerto Madero’s regeneration project did not rely on direct subsidies to promote private sector participation. At project inception, there was no international investor interest given the project’s many perceived risks. Nor did the municipality contribute any financial resources. Therefore, project was self-financed by proceeds of land sales by a quasi-private corporation (CAPMSA) which gained ownership of the port lands through government decree.
CAPMSA did not issue debt, use public housing subsidies, or tax incentives to attract private sector investment. Aside from tenant rents in the first stages of the project, other early financial resources for CAPMSA consisted of the sale of demolition material, the rental of parking lots, and space rented to be used as television and film sets.
Between 1991 and 1993, CAPMSA received USD 54 million for the sale of the warehouses on its property, plus the first lot on the east side of the project site. The peak of sales would come in the third and last stage of the project, once zoning was in place and the infrastructure investment plan had been published. Between the years 1997 and1999, CAPMSA recorded nineteen sales for more than USD 173 million— over 50 percent of total sales in the life of the entity. According to the Master Plan, there were 60 hectares of land available for sale. During the life of the project, CAPMSA recorded sales amounting to US$ 300 million
Decree 1279/89 established the Corporacion Antiguo Puerto Madero Sociedad Anonima (CAPMSA), the quasi-private corporation created to implement the project. Under the Decree, CAPMSA was formed by the spin-off of the AGP and the municipal enterprise Autopistas Urbanas Sociedad Anónima/Urban Highways SA (AUSA). The AGP represented the national government and contributed the land. The city was responsible for land use planning and project design. According to CAPMSA’s first charter, the Board would be initially composed of six directors: four on behalf of the federal government and two representing the city of Buenos Aires.
While CAPMSA was regulated by the country’s Commercial Code as a Public Limited Society, the financial and administrative provisions for public entities were not applicable. As a result, CAPMSA functioned almost as a private company, in that it was allowed to buy, sell, exchange, rent, and/or lease, all kind of assets and conduct any other contract, create joint ventures with other companies, promote or establish new companies or take part in the existing ones, hire, or agree to any kind of union or lawful cooperation.
The Decree transferred the property of the 170-hectare Puerto Madero area to CAPMSA in 1989. It declared all existing concessions and leases terminated and set a deadline to make the possession effective. The implementation strategy for Puerto Madero was simple and the development rollout proceeded in three stages:
First Stage: The launching and anchoring of the project (1989-1993). This included the preparation of the land (regularization of land ownership, surveys, security guarantee for the area, and call for proposals for the master plan), and the sale of the 16 port warehouses on the west side of the docks. During the first stage, the project advanced by converting the port’s warehouses into mixed-use buildings. Without resources to invest in public infrastructure, CAPMSA demonstrated commitment to execute the project through selling the warehouses for conversion. Execution, completion and sale conditions were clarified in the bidding process. The clause of completion meant that if the completion date of 48 months was not met, the property would return to CAPMSA. Penalties for delays were significant, and re-selling structures was prohibited to discourage speculation. CABA’s Ordinance 44945/91 modified the zoning for the western area where the warehouses were located from Future Urbanization to Determined Residential District (U32). The first investment from CAPMSA consisted of surveying the 170 hectares, mapping 70 users in the former AGP domain; and providing security to prevent trespassing. After the tenant mapping, a plan was developed to end the concessions and begin charging rent.
Second Stage: Consolidation of the west side and first sale on the east side (1993-1997).The second phase began with the sale of a narrow strip of land opposite the docks. The commercialization of the land on the east side was initiated with the very first sale. However, the new zoning had yet to be approved. The second stage started with the sale of a 20-hectare block located on the east of dock 1 to the developer, Newside S.A., for a price of USD 9 million. The zoning for the east side had not yet been amended, and the land was still labelled for port operation uses. According to the final Master Plan published in October 1992, the plots east of dock 1 would be destined for use as fairgrounds, an exhibition and convention center, a hotel, and other uses.
Third Stage: Consolidation of the east side (1997-2012).The Urban Planning Code was amended in 1997 to allow for the new zoning of the east side. In 1998, a USD 40 million investment in infrastructure was publicly announced. The project muddled along during the Corralito Crisis (bank freeze) crisis in late 2001 and subsequent recession. The implementation ended with the sale of the majority of the land and transfer of ownership and maintenance of public roads and parks to the city. The transfer was completed by the end of 2012. During the third stage, Puerto Madero was officially incorporated into the city with the status of a barrio (district). In September 1997, the opening ceremony of the neighborhood was held in the presence of President Menem and the newly-elected head of government, Fernando De La Rua.
As part of the Third Stage, the program for major infrastructure investments was publicly launched. In September 1998, the corporation announced a USD 40 million infrastructure investment for the east side comprising potable water, sewage and storm water pipes, electricity, telephone, cable television and data transmission. It also included the construction of 15 kilometers of new roads and street lighting. By 2011, CAPMSA estimated that it had spent USD 113 million on public works.
Following the completion of the Third Stage, the maintenance and sustainability of project infrastructure was incrementally transferred from CAPMSA to CABA. In February 1999, CAPMSA finalized the first transfer of rights for the infrastructure and public spaces to the CABA. Some streets, piers and pedestrian areas were transferred to the city for maintenance. In 2011 CABA agreed to take over provision of maintenance for public spaces once CAPMSA transferred the spaces to CABA. In late 2012, the complete transfer of maintenance had been accomplished. According to CAPMSA, USD 3 million in annual expenses were eliminated from the operating costs of the corporation as a result.
By 2010, a total of 2.25 million of square meters of space had been built in Puerto Madero (L.J. Ramos Realty 2009). The acceleration in the construction occurred during the Third Stage of the development. After the 2001 economic crisis, real estate was considered a safe investment, and construction consequently picked up until 2009. Public and private investment as of 2009 amounted to USD 1.7 billion, and was estimated to reach USD 2.5 billion upon project completion (Cuenya Beatriz y Corral 2011). The value of a square meter for residential use almost doubled between 2005 and 2013 (USD 2,647 to USD 4,948) (Real Estate Survey Report 2014). This implies millions in profits from commercialization.
While the general consensus is that the Puerto Madero Project was a success, some of the administrators recognize that in order to maximize profits for CAPMSA, land sales could have been paced more strategically. If less land had been released between 1997 and 1999, the project could have yielded much greater profit for the corporation. Instead, the profit went to private developers.
Some of the lessons learned from the implementation of the project include:
- Fast implementation. Speed gave project sponsors discretionary powers to execute the project without extensive political interference.
- Simple development instruments. Maintaining the proposals within the existing zoning and only modifying what was strictly necessary helped facilitate project implementation and minimized confrontation with other affected interests.
- Skillful incorporation of decades of urban planning into a single, long-lasting Master Plan. The final Master Plan for Puerto Madero had a long-term vision for the neighborhood, building on the history of the area, as well as on past plans.
- Flexible zoning allowed for mixed-use developments (residential, retail offices, recreational uses) and medium to high densities. The Plan advocated for commercial uses on the ground level to create an active pedestrian area.
- The lack of public financing gave credibility to the corporation with the private sector, and reduced continuous scrutiny and reporting. The fact that Puerto Madero implementation was independent of public sector budget allocation made it more appealing for private sector investors.
- A flexible approach to negotiate with investors, especially during economic downturns allowed for the adjustment to contractual terms, the negotiation of extensions, and alterations in land uses when market conditions rendered project financial feasibility difficult.