1 Recommendation report of the Consultative Committee on the Core Arts and Cultural Facilities of the West Kowloon Cultural District
Hong Kong Government, 12 September 2007

The Government today (September 12) released the recommendation report of the Consultative Committee (CC) on the Core Arts and Cultural Facilities of the West Kowloon Cultural District (WKCD) and started a three-month public engagement exercise to explain the recommendations and to solicit views from the public.

The Chief Secretary for Administration, Mr Henry Tang, extended his heartfelt gratitude to members of the CC and the three advisory groups, that is, the Performing Arts and Tourism Advisory Group (PATAG), the Museums Advisory Group (MAG) and the Financial Matters Advisory Group (FMAG).  He thanked the members for their efforts in the past 15 months in completing a thorough and pragmatic report.  Mr Tang pointed out that the recommendations in the report were a result of wide and in-depth consultation and discussion amongst the members of the CC and the three advisory groups as well as relevant sectors.

Mr Tang said, “WKCD is an important strategic investment to promote  the arts and culture and for the future of Hong Kong.  Investment in the arts and culture in a modern international city like Hong Kong is as important as investment in education, training, research and development or other major infrastructure.”

The CC and its three advisory groups were set up in April last year to re-examine the need for the core arts and cultural facilities of the WKCD and the respective financial  implications.  In the past 15 months, the CC and its three advisory groups had held 37 meetings, four consultative forums, seven focus group meetings, four briefings and 11 tea gatherings. They also invited museum experts from Australia, the United States, Japan and France to Hong Kong for exchange.  Besides, they had also visited a dozen or so museums and related organisations in the United States and Europe to conduct wide and in-depth consultations, studies and examinations.  The CC had studied three related consultancy reports on the WKCD which include the report by the Financial Advisor engaged by the Government to assist the FMAG, the consultancy on the relations between museums and performance venues in the WKCD and Hong Kong's creative industries by the Cultural Policy Research Centre of the University of Hong Kong and the economic impact assessment report completed by the Government Economist, as well as the reports submitted by the PATAG, MAG and FMAG in September, November last year and May this year respectively.

The report points out that the WKCD is more than a physical congregation and clustering of arts and cultural facilities. It is also an integrated cultural district for quality cultural, entertainment and tourism programmes.  The WKCD is a major initiative to meet the long-term infrastructure needs of Hong Kong's arts and cultural development.  In addition, it can foster organic growth and development of cultural and creative industries, attract and nurture talents, promote international exchange and co-operation, enhance the quality of life for citizens and make Hong Kong the cultural gateway to the Pearl River Delta.

The CC emphasises that there should be a balanced mix of arts and cultural facilities for organic growth in the WKCD. On the performing arts venues, the CC recommends to provide a total of 15 performing arts venues of various types and sizes.  Phase One will see the construction of a mega performance venue, a Xiqu (Chinese opera) centre, a concert hall, a chamber music hall, a great theatre, two medium-sized theatres, and four blackbox theatres and piazza areas.  Phase Two will include a great theatre and two medium-sized theatres, depending on market demand after the facilities in Phase One have come into operation. Land must be reserved in the master layout plan for Phase Two facilities there.

The CC considers that the concert hall/chamber music hall, Xiqu (Chinese opera) centre, great theatre and mega performance venue should be free-standing structures whilst the remaining performing arts venues should suitably cluster amongst themselves, or with other culture-related facilities, and commercial, catering and retailing facilities to achieve synergy. If the proposed facilities are implemented, the total seating capacity of Hong Kong's performing arts venues will be increased by 37%.

On the museum front, the CC recommends to set up a new cultural institution called M+(Museum Plus).  It is a flexible and forward-looking cultural institution with a mission to focus on 20th to 21st century visual culture, broadly defined, from a Hong Kong perspective, the perspective of now, and with a global vision.  Visual culture is selected since it is closely related to our daily lives and is the majority of the proposed themes received from the public during the consultation period.    M+ is also a brand new concept, a museum community with both indoor and outdoor space and  a platform for cultural exchange and activities.  M+ will initially include four  broad groupings, i.e. Moving Image, Popular Culture, Design and Visual Art (including ink art).  New groupings could be explored in the course of development.  The CC suggests M+ to be developed in two phases with a total Gross Floor Area (GFA) of 78 750 square metres.  If M+ is implemented, the total GFA of Hong Kong"s museums  will be increased by 52%.  The CC also recommends to set up an interim M+, before the permanent M+ is completed, to provide a platform to start training professional staff, provide arts education to the public, start collecting and research with a view to laying a solid foundation for M+.

The CC proposes to launch an architectural design competition by invitation for M+, the Xiqu (Chinese opera) Centre, and the Concert Hall/Chamber Music Hall to attract innovative iconic designs.

In addition, the CC recommends the provision of an Exhibition Centre which should give priority to uses relating to arts and culture, creative industries as well as events/activities related to WKCD.  The CC also proposes that space should be reserved for uses by the resident companies; meeting rooms and common facilities for artists and arts groups; arts education venues; arts and cultural information centre; space for international meetings/functions/events etc.; as well as space for office of international arts and cultural organisations in Hong Kong.

In response to the rising public aspiration for quality of life, the CC recommends that the following planning parameters should be strictly followed:

(i) setting the maximum overall plot ratio for the whole WKCD site at 1.81, giving a total GFA of about 726 000 square metres;

(ii) capping the residential development at no more than 20% of the total GFA;

(iii) building height restrictions ranging from 50 to 100 metres PD; and

(iv) providing 23 hectares of public open space (mostly at ground level).

Based on the above development parameters, the development mix recommended by the CC, in terms of GFA, is 57% for core arts and cultural facilities and related facilities, 15% for office, 8% for hotel and 20% for residential development.

 “The CC has put forward a prudent and transparent financing approach which separates the arts and cultural facilities from the commercial and residential developments in WKCD, whilst enabling WKCD to develop and operate on a financially self-sufficient basis,” Mr Tang said.  

The CC accepts the assessment of the Financial Advisor which estimates that none of the core arts and cultural facilities can recover the costs of operations and maintenance as well as the capital costs.  Besides, cultural facilities in general could hardly be operated on a financially self-sustainable manner,  hence they need to be subsidised by Government, with private sector involvement in development/operation.  The most important principles the CC subscribes to when drawing up the financing approach for the WKCD project are that the approach should provide funding stability conducive to arts and cultural development without long-term subsidies from the government.  In addition, the approach should remain flexible, ensure early delivery of the project and be affordable to the Government.

Based on the principles listed above, the CC proposes that the financing approach should be to finance the capital costs through an upfront endowment appropriated by Legislative Council (LegCo), vest the retail/dining/entertainment (RDE) part of the commercial sites with the WKCD Authority to provide a steady source of recurrent income through rental proceeds to subsidise the operating costs of the arts and cultural facilities.  With this financing approach, the Government will need to apply to LegCo for an upfront endowment of about $20 billion for developing WKCD's arts and cultural facilities.

Mr Tang pointed out that WKCD was a timely and worthwhile investment which would  bring about substantial tangible and intangible economic benefits: creative industries being enhanced, the overall cultural and arts development in Hong Kong being strengthened, employment opportunities being created and local cultural and arts talents being nurtured.

“According to the study and estimates done by the Government Economist, WKCD will bring to the Hong Kong economy a value-added contribution of $71 billion accumulatively (in present value terms) in the first 46 years of operation; construction works in WKCD (including residential and commercial) can create over 11 000 job opportunities in the construction industry, the various facilities will create more than 21 500 job opportunities for the community after 30 years, and over 4.5 million tourists will be attracted to WKCD every year, bringing an extra $3.7 billion spending annually to Hong Kong,” he said.

The CC recommends that the Government should proceed to draw up as soon as practicable the requisite legislative proposals for the setting up of the WKCD Authority to take forward the WKCD project.  The CC entirely agrees that the successful realisation of the vision and objectives of the WKCD hinges on timely implementation of measures for developing cultural software, including more effective support  for the development of major professional performing arts groups, nurturing budding and young artists, improving operation of performing arts venues and museums, enhancing training in the arts and culture, and strengthening cultural exchange and co-operation.
 
“The Government would not neglect the other measures that would support the development of WKCD. Knowing the importance of hardware, we are also mindful of the importance of software development and other supporting measures. This was also pointed out in the CC’s report.  The Government would work together with local cultural and arts groups to implement appropriate measures.  This will include enhancing support for arts groups and young artists; a comprehensive study of the supply and demand situation of cultural and arts talents with a view to introducing measures to strengthen manpower training; augmenting arts education and audience building; enhancing cultural exchange and co-operation; improving the operational modes of existing performing arts venues and promoting private sector participation and development, including venue partnership scheme and the corporatisation of museum management,” the Secretary for Home Affairs, Mr Tsang Tak-sing said.

Mr Tang said: “The WKCD project is very important to Hong Kong and should be implemented as soon as possible.”

"At this stage, we will invite the public to participate in and promote the project.  If the public supports the CC’s recommendations, the Government will proceed as quickly as possible to set up the WKCD Authority, which will take over WKCD’s planning and preparatory work,” Mr Tang added.
 
The Government will launch a three-month public engagement exercise to explain the CC's recommendations and solicit public views.   Members of the public are welcome to visit the website www.hab.gov.hk/wkcd for the CC's report and the details of the public engagement exercise.

2 Transcript of press conference on West Kowloon Cultural District project
Hong Kong Government, 12 September 2007

Following is the transcript (English portion) of the question-and-answer session at a press conference on the recommendation report of the Consultative Committee on the Core Arts and Cultural Facilities of the West Kowloon Cultural District today (September 12):

Reporter:  Mr Tang, some lawmakers said it's not enough to allocate only 40% of the buildings to arts facilities. Could you explain how you have reached this percentage and what's your response to that comment?

Chief Secretary for Administration Mr Henry Tang:  I think we've made very elaborate explanation as to how we have arrived at this percentage. First of all, the Consultative Committee and the three sub-committees have made extensive discussion and consultation with the arts and cultural community in Hong Kong and this is generally supported by the arts and cultural community. Indeed, we have a number of leading members of the arts and cultural community here today, sitting in the first two rows. We will welcome you to ask them questions afterwards. As far as government policy is concerned, our policy is that in any major metropolitan city, arts and culture is one of the fundamental cornerstones. So it is our policy that we want to develop this on a supply-led basis and not on a demand-led basis. This is our vision in developing West Kowloon Cultural District. On top of that, if you have visited many of the arts and cultural facilities overseas you will see that they are not isolated from the rest of the world. They are normally integrated into the city very well, in the sense that they are near commercial districts, near residential districts, or a mixture of commercial, residential as well as shopping and entertainment facilities. This is what we set out to create - an integrated community with arts and culture as its core function, but supported by dining, retail and other leisure activities, so this kind of place will not be dead if there is no cultural event. So this is how you can make a place more vibrant, more cosmopolitan as well as for people who live around that area that they will have a place to go even when they are not attending a particular cultural affair.

Reporter: How do you respond to that 40% is not enough?

Chief Secretary for Administration: I think the plan speaks for itself. If you just look at, for example that picture, you will see the whole planning intention is to turn it into an arts and cultural-led facility.

Convenor of Performing Arts and Tourism Advisory Group Mrs Selina Chow: Perhaps I can supplement. If you compare the two lists, the one that was originally in the IFP before and now, in fact, after the consultation with the arts and cultural community, we have increased quite substantially, the facilities at least for performing arts definitely. Also in terms of fine-tuning all the facilities we have actually taken into consideration the aspirations of the arts and cultural community. If you look at it, for example, it didn't have a concert hall before. Now it has a concert hall, a chamber music hall. It didn't have a Xiqu Centre before, now it has that. So, all these have been proposed by the arts and cultural community. It's not something that was dreamt up either by the Government or any one of us in the committee. It's all in response to extensive consultation with the people who are going to use these facilities ultimately and therefore we are very confident that with their input it is more likely that we will make a big success of the facilities rather than just to sort of build some hardware and put it to the arts community.

Convenor of Museums Advisory Group Mr Victor Lo: I don't think we should be too indulged on the percentage because it's a big piece of land. Speaking on behalf of the museum committee, we also had extensive discussion. Yes, the size, long-term, would have been more ideal if it wasn't reduced by 30%. But still, after being reduced by 30% it's still a fairly sizeable museum. As we said in the paper, it's roughly the size of MoMA in New York and Tate Modern in London. If any one of you has been to those museums, they are very large. Lastly, a museum is not a hardware-driven activity, it's a content-driven activity. For us to say we want a world-class museum, it's only a wish at this stage. A world-class museum requires 10, 20, 30 years if not longer and tonnes of energy to be pumped into it. First and foremost we need to recruit world-class people to lead the development, then we need to develop world-class content so I don't think size is the deciding factor at this stage. Not even for the next 10, 15, not even 20 years in my opinion.

(Please also refer to the Chinese portion of the opening remarks.)

2 Construction Output for the Second Quarter of 2007
Hong Kong Government, 12 September 2007

The total gross value of construction work performed by main contractors increased by 2.2% in nominal terms from a year earlier to $22.9 billion in the second quarter of 2007, according to the provisional results of the Quarterly Survey of Construction Output released today (September 12) by the Census and Statistics Department (C&SD).

After discounting price changes, the total gross value of construction work performed by main contractors decreased by 0.1% in real terms over the same period.

Gross value of construction work in real terms is derived by deflating the corresponding nominal value with an appropriate price index to the price level in 2000.

Analysed by type of construction work, the gross value of construction work performed at private sector sites totalled $7.4 billion in the second quarter of 2007, up by 20.7% in nominal terms from a year earlier.  In real terms, it increased by 16.8%.  The increase was mainly associated with the progressive stepping up of works at some large commercial building sites and some sports and recreation projects.

The gross value of construction work performed at public sector sites decreased by 11.4% in nominal terms from a year earlier to $3.5 billion in the second quarter of 2007.  In real terms, it decreased by 10.1%.  The decrease was mainly due to completion of works on some large transport projects.

On the other hand, the gross value of construction work performed by contractors at locations other than construction sites amounted to $12.0 billion in the second quarter of 2007, down by 2.7% in nominal terms compared with a year earlier.  In real terms, there was a 6.1% decrease.  Construction work at locations other than construction sites includes minor new construction activities and renovation work at erected buildings and structures; and electrical and mechanical fitting work at locations other than construction sites.

Analysed by end-use group, residential building projects accounted for the largest share in the gross value of construction work performed at construction sites in the second quarter of 2007.  The gross value of construction work performed for these projects amounted to $4.1 billion, up by 10.3% in nominal terms from a year earlier.

Commercial building projects constituted the second largest category of construction site work.  The gross value of construction work performed for these projects totalled $2.9 billion, representing a significant increase of 84.3% in nominal terms from a year earlier.

On a seasonally adjusted basis, the gross value of construction work performed by main contractors increased by 2.8% in nominal terms or increased by 2.1% in real terms in the second quarter of 2007 compared with the first quarter of 2007.

Table 1 shows the gross value of construction work performed by main contractors in the second quarter of 2007 and Table 2 shows the revised figures for the first quarter of 2007.

Owing to the widespread sub-contracting practices in the construction industry, a construction establishment can be a main contractor for one contract and a sub-contractor for another contract at the same time.  The gross value of construction work performed by main contractors covers only those projects in which the construction establishment takes the role of a main contractor, but not projects in which it takes only the role of a sub-contractor.  However, sub-contractors' contribution should have been included in the gross value of construction work performed by main contractors for whom they worked.

More detailed statistics are given in the "Report on the Quarterly Survey of Construction Output, 2nd Quarter 2007".  The publication is now available for download (in PDF format) free of charge from the website of C&SD (www.censtatd.gov.hk/products_and_services/products/publications/index.jsp).  The print version of the publication can be purchased in the following ways:

* Purchase in person at the Publications Unit of C&SD (Address: 19/F, Wanchai Tower, 12 Harbour Road, Wan Chai; Tel.:2582 3025) at HK$25 per copy.
* Complete a mail order form which is available for downloading from the website of C&SD (www.censtatd.gov.hk/products_and_services/other_services/provision_of_stat/
mail_ordering_ of_publications/index.jsp) and return it to C&SD.  The price (excluding postage) is the same as above.
* Purchase online at the Statistical Bookstore of the Department (www.statisticalbookstore.gov.hk) and the Government Bookstore of the Information Services Department (www.bookstore.gov.hk).  Print versions if purchased online are offered a discount, at 85% of their original prices.  After discount, the price (excluding postage) is HK$21.30 per copy.

For enquiries about the survey results, please contact the Construction and Miscellaneous Services Statistics Section of C&SD at telephone no. 2805 6426 or email address building@censtatd.gov.hk.

3 Developers gung-ho despite restrictions on height
Stephanie Tong, The Standard 13 September 2007

Hong Kong's famed harbor view is still too much an attraction for developers to resist despite the government reducing the height limit of residential development to 100 meters at the West Kowloon cultural district.

According to the government's latest consultation paper, the proposed maximum height will be slashed from 130 meters to 50-100 meters.

But developers yesterday said they are still interested in the site.

"Lowering the maximum height will not dampen developers' interest to bid. We will consider the risks involved," said Hang Lung Properties (0101) chairman Ronnie Chan Chi-chung.

"In fact, property sales in the region will not be affected," Chan said, adding: "Hong Kong's biggest asset is Victoria Harbour."

Henderson Land Development (0012) general manager for sales Tony Tse Wai-chuen said they are also interested. "It is an ideal location as it is near to the harbor. No further research is needed to confirm the value," Tse said.

K Wah International Holdings (0173) and Swire Properties also welcomed the new cultural hub proposal. K Wah Real Estate managing director Alex Lui Yiu-wah said the company is interested in developing residential projects in the cultural hub.

"We have the desire to join the bidding but we will have to study the sales conditions," Lui said.

Vigers Appraisal and Consulting executive director Tony Chan Tung-ngok calculated the site may hit HK$10,000 per square foot.

"It is an excellent place for low-density luxury residential projects as it has museums and cultural facilities nearby," the consultant said.

Meanwhile, Chan at Hang Lung praised the government for abolishing the "single-developer approach."

He said: "It is good the government listened to the public and introduced the new proposal. Abolishing the single-developer approach is great as it prevented small-to-medium-sized developers from bidding."

A Sino Group spokesman also welcomed the proposal and said they will also join the bidding.

4 West Kowloon project to be self-sustainable
Staff reporters, SCMP 13 September 2007

The government would inject more money into developing arts and culture in Hong Kong to complement its plan to build a HK$19-billion cultural hub in West Kowloon.
Permanent Secretary for Home Affairs Carrie Yau Tsang Kai-lai said on Thursday this would help make it a self-sustaining project.

Mrs Yau told local radio that thorough evaluations of the project had been made by financial experts.

“We foresee the operations of the cultural facilities, including the new museums, theatres, concert halls and museums would lose more than HK$60 billion in the coming 50 years after completion of the West Kowloon Cultural District,” Mrs Tsang said.

She explained that under a new financing model, the cultural authority would be sustained by income from the retail, restaurants and entertainment venues.

“Our financial experts predicts the rental returns and income generate from the retail, restaurants, and entertainment venues would be able to generate more than HK$70 billion in revenue, which would be used to subsidise the losses from operating the cultural facilities,” added Mrs Yau.

Selina Chow Liang Shuk-yee, who is on the Consultative Committee on the Core Arts and Cultural Facilities of the West Kowloon Cultural District, said the facilities could lose money.

“According to evaluations by financial experts, other than the art and exhibition centres and the performance venues which have more than ten thousand seats, some facilities and centres could lose millions of dollars,” Mrs Chow said.

Carrie Yau said groups, such as the Arts Development Council and the Chinese operas associations, would be given more resources to support their development and to nurture local talent.

This would mean new museums, theatres and concert halls would be put to good use.

Mrs Yau expressed confidence that enough local talent existed to support the project.

She also said the government would ensure there would be enough representatives from the community and cultural sectors to join the West Kowloon Cultural Development Authority.

Under the new scheme revealed by Chief Secretary Henry Tang Ying-yen, the government would inject HK$19 billion into the project.

This would come from the sale of more than 40 per cent of the district’s gross floor area for residential and commercial development. It will pay for construction of 15 performing arts venues, museum, a convention centre and transport and public facilities.

The amount is about 40 per cent less than the HK$30 billion proposed in 2003.

To ensure the hub is financially sustainable within the 40-hectare site, the size of a flagship museum, dubbed M+, would be reduced by 30 per cent in an exchange for more offices, a government report said on Wednesday.



5 Developers will not be let loose on waterfront Official places the emphasis on open space for public in repackaging of arts hub
Denise Hung and Olga Wong, SCMP 13 September 2007