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ANMSM and land-use policies

Mr. Alain COLSON - GIE France Montagnes, representing Mr Gilbert Blanc-Tailleur, France

 

Good morning Ladies and Gentlemen,

Allow me first of all to say that if I am speaking to you today it is because I am replacing Gilbert BLANC TAILLEUR who unfortunately cannot be with us. He has asked me to apologize on his behalf.

The National Association of Mayors of Mountain Resorts (ANMSM), which is a member of France Montagnes in its capacity as the institutional representative of the main French mountain resorts, closely follows issues relating to the pressures exerted by use of land and to the intended purpose of buildings which are used as accommodation.

Gilbert BLANC TAILLEUR, its President, who is also President of GIE France Montagnes and Mayor of Saint Bon Courchevel, chairs a working group called “land-use and development” in the scope of the National Tourist Council.

The group has met on several occasions. Its objective is to draft a report which will list the procedures and means available to enable relevant local authorities to have efficient tools at their disposal to control land-use and the intended purpose of buildings.

How:

By reviewing the legal and regulatory situation based on the notes drawn up by the Minister for Ecology, Sustainable Development and Town and Country Planning.

By interviewing the various people involved.

Pinpointing the problem:

The group has highlighted three negative effects:

• Negative effects on the economy:
• Change in the intended purpose of ‘beds in the rental sector’ into ‘beds in secondary homes’;
• Curb in the development of public infrastructures covering a large surface area;
• Restrictions for agriculture;
• Social effects:
• Employees’ accommodation;
• Accommodation for permanent residents.
• Effects on the environment:
• Deterioration of the appealing features of the resort.

Possible avenues for discussion:

• Do the existing tools allow for positive and interesting action plans?
• Are new tools required?

Classification of current “levers for change”:

• “Control of land-use offers and/or real estate offers” lever
• “Lessening of the negative social effects” lever
• “Lessening of the negative environmental effects” lever
• “Information” lever
• "Control of competition involving an area of space and/or common natural resource" lever

Nothing can be efficient if there is no local development project (the Local Urban Planning Scheme provides a perfect example of the urban equivalent) which is combined with a project for the area (SCOT – Territorial Cohesion Plan) and which are themselves part of a Territorial Directive on Planning (DTA).

The group is looking for good practices, i.e. practices which have enabled coherent policies to be elaborated using these tools.

The group has found that the PLU (Local Urban Planning Scheme) does not result in a drop in prices: on the contrary, land studies have shown that districts with POS (land use plans) obtained higher prices for the land sold than those without POS.

The PLUs ensure that the rise in local taxes is not too high as there is regular planning of public amenities which allows for the corresponding financing requirements to be spread out over time.

It is better to use the tax or special schemes which are currently available in terms of urban planning.

The SCOTs and the DTAs require an ‘intercommunal’ (covering several municipalities) approach: these tools involve areas which are more or less vast and similar in nature, and which exceed the boundaries of individual municipalities.

But the very selective localization of the income gained from tourism does not favour this type of cooperation.

Management of changes in the intended purpose of buildings:

The Urban Planning Code is not suitable.

Reserves of land:

Money and available land is required. What are good practices?

What further action is going to be taken?

Once the group is in possession of “the good practices” it will be able to carry out a more detailed review of the current situation, detect problem areas and suggest, where required, the creation of new tools.

I am consequently launching an appeal now to everybody present today: please tell us what you have been able to achieve; make your successes known as the group needs to be informed of local action plans.

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In addition to the fantastic work carried out by the National Tourism Council, I would like to talk to you about two types of tools which could be implemented by municipalities if they so desired – however, desire to do something should not be confused with the notion that it is easy to implement.

The first concerns the Public Land Management Authority (EPFL). This agency of a kind may be created by municipalities, groups of municipalities, departments …

Its purpose is to constitute land reserves on behalf of the municipality which subsequently places an order for a plot of land: On the basis of an action programme covering several years, the EPFL purchases land and pays for all costs pertaining to the land until the municipality finds a use for it. The EPFL can exercise the right of pre-emption on behalf of the municipalities if requested to do so by the latter.

The EPFL may be financed by a tax, the Special Amenities Tax (optional), subsidies and loans.

There are a number of EPFLs in a host of French departments, including departments in mountain areas. However, such authorities are rarely to be found in tourist zones despite the fact that their work is permitted by the Urban Planning Code: there is consequently no reason why this tool should not be implemented by municipalities in mountain areas.

The tool will undoubtedly not work the miracles that everybody is expecting it to, but it has the advantage of outsourcing the burden of land buying for a long period of time.

The efficiency of the tool will naturally depend by and large on the municipalities urban planning as indicated in their Local Urban Planning Schemes.

The second tool is the Ninety-Nine Year Lease (BE).

We have seen from the various work carried out that ultimately the most important element is the local authority’s ability to control the intended purpose of both the land in its district and the buildings built on that land on a long term basis, even on a very long term basis.

That is why, in my opinion, the BE is an appropriate tool, even if I have to add, on a par with the EPFL: it is not a miraculous invention created by lawyers which discreetly solves all the problematic issues that the representatives of the population may have.

But, taking into account the length of time this device has existed (it was already used in Roman times) we can safely say that if it had been inadequate, positive law would not have kept it for so long.

It is consequently one of the oldest devices of multiple-use ownership that may be used by municipalities in general and those in the mountains in particular to maintain complete control over land and over the intended purpose of whatever is built on that land.

How does it work?

The owner of the land leases it out to a lessee for a long period of time (from 18 to 99 years) at a low price, even at a token price.

The lessee is obliged to comply with the clauses of the lease, which in truth represent the owner’s desires. They generally cover the exploitation and improvement of the land in question (this is undoubtedly due to the fact that it was used at the outset for rural property).

The lease may be cancelled in advance if the lessee fails to comply with the clauses resulting, where applicable, in heavy losses for the wrongdoer.

At the end of the lease, full ownership of the land and everything built on it at that time is recovered by the owner at a price agreed in advance. The price is generally low or alternatively no price is paid at all as the property in question has been depreciated in full due to the length of the lease.

It is a kind of financial partnership between the owner and lessee; the former does not want or cannot exploit the land and the latter cannot buy it: both reach agreement, with the owner waiving the right to receive the equivalent of the price of a sale and the lessee waiving the right to increase their assets. The length of the lease enables the owner to compensate for the fact that the asset has not been immediately valued and enables the lessee to avoid building up their assets.

Throughout the duration of the lease, the lessee is for all intents and purposes the holder of the land rights on the leased property: they have the same obligations as an owner in all respects bar one very important right: the right to dispose of the property.

How can it be applied to a mountain resort?

The municipality which is the owner of a plot of land could entrust it to an investor using a BE. The investor could construct a building on the plot to be used as tourist accommodation, such as a hotel for example.

The particulars of the building (surface area, type of hotel, design, etc.) would be stipulated in the lease and the use of the building as a hotel would be an essential feature of the contract. The contract could also stipulate that the intended purpose of the building as a hotel must not be altered throughout its duration.

Failure to comply with these clauses would result in an early cancellation of the contract, in other words the property would resume its position as one of the municipality’s assets in advance, before depreciation.

The cost of the investment would be borne by the lessee who is able to calculate their return thanks to the length of the lease.

At the end of the lease, full ownership of the land and hotel is recovered by the municipality, either free of charge or not in line with the initial agreement. In all events, payment would represent a small amount or token gesture.

At this point, the municipality would regain full use of its asset: it may choose to keep the hotel, entrust a professional with its management, demolish it, change its intended purpose…, in short, it is able to adapt its assets to the realities and requirements of the moment.

By way of example, I would like to mention the town of Macot La Plagne. The town signed a BE with a SCI (a real estate investment company) comprised of shopkeepers from the La Plagne resort to enable the SCI to build a block of flats for their seasonal workers. This is a perfect example of mutual assent between the shopkeepers and the municipality: both parties made reciprocal commitments in the lease contract (placing of the land at the disposal of the SCI free of charge, building of a block of flats for the seasonal workers and maintaining this intended purpose for a very long period of time, to name the most important).

At the end of the lease, the building will be registered as part of the municipality’s assets and it will be free to choose how it is to be used.

The town of Courchevel is considering using a BE to build a four-star hotel.

Both cases highlight the same objectives: controlling land-use, controlling private investments which may be carried out on the land and recovering full ownership of both land and buildings on a long-term basis.

Moreover, the BE, in a form adapted to public law, is one of the possibilities available to public / private partnerships which would like to build police stations or hospitals for example.

Again, it is not the ultimate weapon. It is a means of ensuring long-term control of the town’s land or of enabling private investments on public property: The Romans did indeed know what they were talking about! the alliance of strengths allows the asset as a whole (land and building) to progress. Today, we call this PPP in French or PFI (Private Finance Initiative) in English.

Thank you very much for your attention.