Chairman's Report
2009 ULI Fall Meeting

SAN FRANCISCO—The Urban Land Institute’s Fall meeting is one of the greatest gatherings of knowledge in the worldwide real estate industry. I’m delighted that this year is no exception. There are over 6,000 of us here this week – in spite of, or perhaps because of - the recession. Others’ meetings may boast even bigger numbers but here in this room we have better quality, broader vision and quite dazzling professional scope !

I believe we can now assume that the global recession is behind us. This does not mean our difficulties are over. We still have to work out what is ahead of us. For the last year I have enjoyed saying that, if anyone claims to know what is going to happen, they must be lying; well, now more than I can ever remember, so-called experts openly admit to being uncertain about the future. Bouncing stock markets appear to be at odds with what we experience directly - especially the increase in unemployment. Today, there is no shame in being confused !

Part of our challenge is how we view real estate. Real estate must revert to being used as a reliable long term investment and less an opportunity for quick riches. In the past decade we got this balance wrong. We must remember that the only reason buildings exist is for occupation. They also provide an opportunity for us to earn a living – by their design and development, their leasing, financing, management….right through to eventual replacement.

The chance for more opportunistic types - traders and dealers - to ‘grab a fortune’ is there too. They play a very important role in efficient markets, but if they become the mainstream, copied and followed by pension funds, insurance companies, university endowments and the like…………well, it did end in tears.

Have we learned ? I am not confident that the fundamental reality of real estate is understood. This makes me nervous about the long term stability of real estate capital markets. The amount of ‘opportunity capital’ being raised or planned is too great, and risks another phase of over-pricing of real estate.

If this sounds somewhat pessimistic, don’t get me wrong. I am optimistic about the future of buildings. I am excited about the emerging agenda for cooperation to improve our towns and cities. My concern is about is the unstable structures we impose on top of real estate. I recall the comment earlier this year of Jeremy Grantham, Chairman of the Boston-based fund manager GMO. “ The real wealth of society,” he said, “lies in its stock of buildings, not in the hands of the buildings’ owners”.

As I’m a non-American and Chairman of the ULI, I’m often asked whether the ULI will now pursue a more global agenda. The answer is no. The fact is, ULI has had an international agenda for at least two decades.

There are people here from European, Asian, Middle Eastern, African, North and South American countries. The ULI is truly an international institute; not just because of all the places where it is a force for good, but also because the ULI is concerned with universal issues. Whether explicitly planned or spontaneously evolving, cities throughout the world grapple with the same challenges to create thriving communities. The world is really quite a small place when it comes to urban issues and many of these relate to land use.

It’s been said many times that ULI must be equally effective globally as well as locally. My take on this is a little different. I believe ULI can only be effective globally if it is effective locally. It is individuals at work in their own communities who have the knowledge, the personal commitment and the chance to create a direct impact. Overwhelmingly, our membership is made up of individuals.

In order to strengthen local ULI and to realise the full potential of international ULI, we must make our structure less rigid. We need the flexibility to promote local initiative and to harness the power of multi-national knowledge. Building on the work of previous chairmen my agenda will pay attention to both, based always around our common interest - cities.

I think we can see that the eventual structure has three levels where local ULI (District Councils) are coordinated through continental ULI (Americas, Asia, Europe etc) with an overarching ‘global’ ULI retaining an international agenda. Responsibility should be devolved as far as possible, implying a less centralised organisation in the future.

Some elements of self determination are already in place for ULI Europe, and plans are progressing to devolve more responsibility to District Councils. This structure may take time to implement fully – that’s in the nature of a member-based organisation. The end result will be a ULI that is more effective and more responsive to its members.

At the same time, I believe we should make more use of the breadth and depth of our knowledge outside our own membership. We punch below our weight. We have so much to offer policy makers and planners at all levels – from local volunteer groups through regional and national governments, right up to international agencies.

Of course, I recognise our great existing programs such as Reality Check with its admirable track record of building consensus around future growth. What I mean is, with a membership of around 35,000 and the potential for many more, we must get organised. The power of our organisation will increasingly lie in the coordination of our efforts.

We all know that it is easy to hold a conversation in a small group. It becomes more difficult to achieve coherence as the number of voices grows. We must find a way to do just that, to organise our ideas on issues that affect our industry and our communities. Those who seek ULI’s knowledge must find it more easily in future. We must be more generous in offering to others the distillation of our debates. We must become better at broadcasting ideas.

This does not mean that we have to reach a consensus on every issue nor that we seek any particular regulatory or legislative outcome. Ours must be a more intelligent approach whereby the knowledge and credibility we possess is used to stimulate the right debate, to point out great practice and to highlight bad practice.

We are experts in the built environment. Others are expert in the social interaction which occurs inside the places we create. One will always reflect the other; they are not separable, much as we might like to see our own roles as self-contained.

‘The city’ is the best way which we human beings have found to organise ourselves in the mechanised world. In spite of the technological advancements over the centuries, our basic tasks as members of society remain the same as they have always been – to use our time productively to satisfy our need for food and for housing and to secure a future for subsequent generations. This may sound over-simplistic, but it’s what
we do.

Cities are for people and about people. The geographic, cultural and political differences around the globe disguise the similarities between cities. Sharing knowledge and experience can help to manage the constant change in societies; change caused by our boundless capacity for invention and our success in growing our species. All nations and states are proud of their cultures and geographies and the way these have combined to create distinctly wonderful towns and cities. No single answer is the right one and I often think a little more humility and inquiry from city leaders would enable much quicker improvements.

Ultimately we all have to add some value to society. This can be in any number of ways. What has always attracted me to the ULI is the notion of ‘the Big Tent’. Ours is not a narrow organisation but one which thrives on a mix: of professions and perspectives; of the creative and the destructive; of the political and the practical; of leaders and their critics.

A good test of whether something is worthwhile is to ask what would happen if it didn’t exist. If the ULI didn’t exist, it would surely be invented. This is the reason why I think further growth in the organisation over time is inevitable, even though our membership has fallen in the past year, for obvious reasons.

The future for the urban agenda is a bright one with the chance of a new era ahead. I sense that it is gradually dawning on many disciplines and professions engaged in urban life that there can be a more enlightened approach than operating in a series of silos. I would like ULI to be in the vanguard of this approach for a couple of reasons.

At a time when resources are scarce, it is helpful to combine effort. There are many organisations covering similar territory. Research Institutes, think tanks, businesses, charities and universities are all investigating urban land issues. We can link our efforts with these groups. The results will surely be richer, quicker and less wasteful than we can each achieve alone.

ULI as a whole is credible and respected. As individuals, our opinions offered on behalf of our employers are often lost or discounted as being self serving. Those same opinions offered through ULI are not seen like this and allow us all to contribute something very positive to the process.

Turning briefly to more practical matters, the ULI is only as strong as the person in charge – and that’s not the Chairman ! I mean the one who must actually take the organisation to where we want it to go. So, the most important event of the year for ULI has been the appointment of our new Chief Executive, Patrick Phillips, who started work in mid September.

However successful it is, every organisation will benefit from fresh thinking from time to time. Rick Rosan has given ULI 18 incredible years of success and on behalf of all the membership of ULI, I would like to pay tribute to him and to thank him for all that he has achieved on our behalves.

After such a long period, a new leader is bound to bring changes and Patrick has quickly made his presence felt. I am very confident that Patrick will respect the legacy he is inheriting and will soon put his own stamp on our organisation. You will have the chance to hear from Patrick himself this afternoon.

Ironically, the recession gives him a certain scope; not in the sad loss of staff this last year which the ULI has experienced in common with many of its members but in the need for a review of what is really important in the future. There are so many great ideas, but ULI cannot do everything. I have asked that ULI adopts the mantra of ‘Less is More’ this year. By doing fewer things more effectively we will be able to achieve more – that is better value for our members, improved profile, greater influence and more obvious success in meeting our mission of leadership. In a nutshell, more bang from your buck !

I will certainly use my influence as chairman to concentrate on short term efficiency on behalf of members even as we think about the longer term future of ULI.

Great meetings like these do not happen by accident. Our program committee, chaired by Dan Van Epp since June and for two years before that by Bret Wilkerson, has achieved a great combination of large and small meetings with some outstanding speakers and panels. Joe Brown has chaired the local arrangements committee and with this group has added true San Francisco flavour in tours and workshops. I say thank you to all of those who have been involved, including ULI San Francisco Chairman Rick Disnica and all the hard-working members and staff of ULI San Francisco.

There is one other person to mention specifically and that is Mary Beth Corrigan, EVP Meetings at ULI. She is the one whose smile is getting broader as we get closer to the end of the week. More than anyone else we rely on her dedication to make this event happen.

Not everything will be perfect this week. In fact, I have often been part of a corridor conversation discussing what has been particularly good or not so good. My plea is that you don’t leave comments there but just take the trouble to tell us as well. That way, we can be sure to make things even better next year.

Finally, I would like to thank all of you. In some way, large or small, today or tomorrow, your presence here will make a difference !

Thank you.