The financial feasibility analysis of urban transformation projects: An application of a quick assessment model

Abstract

In the field of urban planning processes, the territorial redevelopment initiatives are important for the sustainable development of the cities. With reference to a real case study in the city of Pontedera (Italy), the aim of the present work is to highlight the usefulness of the Cost-Volume Profit Analysis (CVPA) as a tool to support the decisions of the public and private operators involved in three urban redevelopment initiatives. Specifically, for each identified transformation plots, two scenarios have been analyzed, by considering for each one all the building rights allowed by the General Regulatory Plan (GRP) of the city, and the requests of public and private subjects involved. The results achieved prove the inadequacy and rigidity of the forecasts of the GRP which, therefore, need to be checked in advance to avoid the expenditure of public money. In this way, the proposed model allows the public subject to correctly calibrate the extent and type of requests to be made to the private entrepreneur, who will be able to verify its own financial balance sheet and its expected amount of revenues and costs. The implemented methodology can be a useful support for the municipal administration in order to favor a quick financial assessment and to activate a negotiation on the building parameters of the different analyzed interventions.