They Paved Paradise

by Sven Triloqvist
Sun May 18th, 2008 at 05:14:18 PM EST

Malls are big business in Finland, as elsewhere. Most have been developed by Finnish construction companies and then sold to real estate investors or operators. The profits are now seeping into Finnish politics.

An entertaining scandal awaits below the fold. At the end of the diary, there is more business information and less comedy, for those who want to mall over more serious matters.

diary requested by DoDo...


A group of well-heeled businessmen control `an association for developing communities in Finland'. That association gave a total of 50,000 € to various candidates in the last General Election. The PM, for instance, got 10k. The 'donations' went to leading figures in the Centre Party, The National Coalition and the Social Democrats. All of these since-elected politicians now claim to have known nothing about the people behind the association.

 The scandal came to light because another elected MP, and secretary of the Centre Party, 'forgot' to declare the origin of his donations from this association.

 One of the key movers/funders behind the association is a Mr Sugary (not his real name, but close to it) - a man who made billions selling crappy cheap furniture all over Finland, by using crappy TV ads that featured, for example, buxom scantily dressed bimbos playing phalluses with electric drills. Huge signs float outside the stores - `'Good people, why pay more?' That business is worth 100 M€. is all owned by Mr Sugary. Mr S was not very good at school, but his life changed when he was given 20 pigs to look after at age 15. He's never looked back, and the average shape and colour of his customers seem to indicate that he still serves the same species. The man is a monster of bad taste, so it is little wonder that he was literally stabbed in the back, round Christmas, by one of his business partners, after a heavy boozing session at his dacha.

They were not even bright enough to claim that the catastrophic collapse of one of their dining chairs (rustic table and 6 chairs, 109€), caused the business partner to tip violently against his host at the dinner holding a steak knife, while the host was turned to his wife on the other side, worried that she was in difficulties as her face had slumped into a large tureen of Koskenkorva.

 No, they didn't claim that.

 Anyway, the recent flight of kitsch fancy that our entrepreneur cooked up is a super mall with outdoors indoors (if you see what I mean) and specially built olde worlde nests of alleyways hired out to crafts people. Mr S owns 200 M€ of it. It's the idea of an 'experience' shopping centre. They also planned to have a system, run by the Finnish Post Office, such that your purchased goods were whisked away to be collected at the exit to the car park. Thus, in theory, happy shoppers would shop on, undeterred by the mounting physical evidence of their consumerism that they would have to push round all the wonderful 'experiences'.

 This is called an Ideapark. It professes green values, responsibiity to the community and to existing local shopkeepers - professes, but ignores, and the principle idea in this park is an advanced method of parting people from their money. I have some knowledge of all these things because I was peripherally involved in the project at its earliest stages, before Mr Phallic&Decker came in with elusive spondulex. At which point I and several other consultants left. I admit with shame to getting involved, but the guy who came up with the concept was a nice guy and his green/caring spiel was believable.

 So here's the twist. Mr IdeaPark wants to build another of these countryside-wrecking monsters (and I can now see that they are) in Vihti - very close to an old wooden house I once lived in. It is a beautiful area.

 Many politicians are against the project and the Environment Minister has consistently refused to give planning permission. However just before the scandal broke, the PM came out in favour of the Vihti IdeaPark, saying that it would bring much-needed service jobs to the area.

 Wel, well, well. He gets 10k for his election campaign from an association funded by Mr IdeaPark, and then involves himself, unusually for a PM, in a planning application.

Since I wrote the original longish text above in another diary, the scandal has been further illuminated. The environment minister has officially denied planning permission to the Vihti Ideapark, the PM has called for reform in political donations (well he would, wouldn't he), and several other elected members have hurried to clarify the sources of their donations.

It is not over by a long chalk. I expect other little titillating revelations, further embarrassment and, eventually, a new Law.

Finally, a bit of shop till you drop history.

The first department store was Stockmann, established in 1862. It was a family company -  a German family originally from Lübeck. It is still there today, the largest department store in the Nordics and still expanding. Stockmann also owns the Seppälä fashion store chain, and Hobby Hall, the largest e-commerce and mail order business in Finland. There are Stockmann department stores in several of the main Finnish cities, and also in Tallin, Riga and Moscow.

The other large stores in Finland traditionally have been allied to one of the two big industrial banks in Finland - SYP and KOP, or then to Leftist cooperatives. The rapid expansion of competitive merchant banking by other groups that preceded and contributed to the financial crisis of the early Nineties changed all this.

The first big development was Itäkeskus in 1984. This huge shopping center lies to the east of the capital, standing on the Metro line. It is the largest covered mall in the Nordic countries. 300 shops and restaurants. 2000 employed. The core building, before expansion, was designed by architect Erkki Kairamo, partner of my ex father-in-law, and brother of the visionary Kari Kairamo, the CEO who turned Nokia's focus to mobile devices. The original core building was financed by the SKOP bank, which ended up in the hands of the government after the financial crisis of 1991. Further expansion was completed by 2001 and then sold in 2002 to the Dutch group Wereldhave.

Iso Omena - (Big Apple). Opened 2001. Situated on the Western exit from the capital just beyond the HQ of Nokia. Owned by large Finnish store operator CityCon (60%) and GIC Real Estate - a Singapore-based Sovereign Fund that operates globally.

Jumbo is Finland's second largest shopping centre, located on Ring Road 3 to the north of the capital. Half of the GLA (Gross Lettable Area) has now been acquired by Rodamco Europe (Property portfolio 25 B€) Two large supermarkets are owner-occupiers outside of the deal. The rest of the GLA is held by the Finnish pension fund Fennia.

Kamppi is a large mall in downtown Helsinki that includes the main underground bus station. It was developed by Finnish construction company SRV and Finnish investment and development company Pontos, then sold on to Boultbee (3 B€ portfolio) and the Royal Bank of Scotland, and finally purchased by Protego Nordic Retail Fund - an LLP! (managing 2  B€ of assets). The first thing the second owners asked was whether they could get rid of the underground bus station and have more shops. Idiots. The buses bring up to 150,000 people a day up through the mall. I confess to have been involved at the development stage on branding, but the relationship ended in legal recriminations ;-)

Skanssi is a much smaller mall and residential development on the edge of Turku to open in 2009. The development was conceived by a young dining friend of mine who took over the family construction company and brought it into the 3rd millennium with new logistics planning that brought materials onsite according to JIT principles. (Just In Time). The company is a smaller player, but I think they have done excellent and responsible development. Skanssi was conceived as a human scale mall closely surrounded by a large residential area, with small `local' shops built into the ground floor of many of the apartment buildings. The point was to integrate the mall into the community. Sadly, but inevitably, the concept was purchased in 2007 by pure Finnish CapMan (capital 3 B€) who describe themselves somewhat strangely as `the leading alternative asset managers in the Nordic countries'.

Tokmanni (a jokey version of the Stockmann name) is a discount store chain owned by a friend and fellow conspirator of Mr S in `community development'. Tokmanni has 133 cheapo stores all over Finland and net sales of 518 M€ in 2007. The fact that CapMan has invested in both Skanssi and Tokmanni, and the existence of a close relationship with Ideapark's Mr Sugary leads me to wonder how they are going to get together. I confess to regularly buying T-shirts from one of their cheapo stores.

You don't know what you got till it's gone
They paved Paradise - put up a parking lot

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Well this was a happy educational Sunday evening of research ;-)

You can't be me, I'm taken
by Sven Triloqvist on Sun May 18th, 2008 at 05:16:26 PM EST
I think there is a lot to be said for a stroll outside that involves protection from rather than immersion in the elements.  I don't understand why porticos aren't everywhere in the northern lands--it rains, it's windy: put up some porticos, fix some windbreaks appropriately--everyone still outside but somewhat protected.  Malls have that shininess, the huge cark parks, (cark parks!--)--so I can see that a "green mall" would have some pull: go into town (=go shopping, but not only, there are bars, cafes, and the places where you can hang out)--

Here, the issue was always: Malls are private property, so they're not public spaces.  They have security guards, who can and will move you on if you don't appear to want to partake of any of the consumables--and no public buildings.

Heh!  But protection from the elements does sound good!  Maybe there should be a rule that one third of Mall space has to be given over to public buildings--run by the local council maybe--a swimming pool, a sports complex, a play area--and yes, make it green--have some inside/outside going on, plants and trees, a rope-filled monkey playground for kids of all ages and their kids--

Being stabbed in the back, literally: it's a classic!  Great scene you wrote there!

Don't fight forces, use them R. Buckminster Fuller.

by rg (leopold dot lepster at google mail dot com) on Sun May 18th, 2008 at 06:41:14 PM EST
[ Parent ]
The original plan for Ideapark that I was involved in had a swimming pool, a sports complex, a big kids area etc. I don't know if they survived the final development plans. I have never had the courage to go to the place and check it out.

You can't be me, I'm taken
by Sven Triloqvist on Sun May 18th, 2008 at 07:08:33 PM EST
[ Parent ]
Great for me.. learning a lot.

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Mon May 19th, 2008 at 10:33:28 AM EST
[ Parent ]
The latest on the scandal

You can't be me, I'm taken
by Sven Triloqvist on Sun May 18th, 2008 at 07:45:40 PM EST
The centralization of good and useable "stuff" into only a few verifiable areas also has the military advantage of being "secured" easily.
by Lasthorseman (Lasthorseman@comcast.net) on Sun May 18th, 2008 at 08:07:07 PM EST
but only for certain values of secured, it also means you've concentrated your targets. this is an "All your eggs in one basket" strategy and is only really effective against your own population rather than any external threats.

Interviewer: What do you believe is behind this recent increase in terrorist bombings? Helpmann: Bad sportsmanship
by ceebs (bunchofwankers (at) gmail (dot) com) on Sun May 18th, 2008 at 08:21:13 PM EST
[ Parent ]
by Lasthorseman (Lasthorseman@comcast.net) on Sun May 18th, 2008 at 10:10:34 PM EST
[ Parent ]
ceebs, your comments are like gusts of fresh welsh air...

chris talks about 'napsterisation', to describe this 'small is beautiful', spread-the-bennies-and-the-risk, approach.

computers showed the way...it's a 180° turn from the 'centralise-is-good' mentality that has accompanied our evolution, probably since we first 'centralised' our favourite tools and trinkets in our fave caves.

and on to centralising skills into guilds, shops into markets, markets into towns, towns into cities, intelligence into universities, art into academies and museums, und so weiter...

at a certain point these convergent forces hit a membrane and have to disperse to survive the calculus of waste/benefit.

it's always tragic, cf the library of alexander, possibly the biggest cognitive setback ever in history, we'll never know.

you collected your goodies in yer cave, then some gang came and ripped you off....re-dispersion.

you set up yer farm and holdings, sorted, mature orchards, and along comes some religious fanatic group and decides their 'sacred'  cause is served by reducing your (and your forefathers') carefully crafted life's work into rubble...

sleeping peacefully in your teepee, along comes the next tribe looking for scalps, necessary for their positional status.

now it's the info-age...and it seems like much as certain interests want to 'big box' that too, the info seems to have a mind of its own, like water always finding the cracks.

if the internet weren't so vital to business, it's be gone by now, too damn subversive of authoritarianism by its very nature.

so instead of capitalism supplying the rope to hang itself, it's more a case of 'hoist by its own petard'. marx wasn't far off in his metaphor.

anyway, i don't think capitalism as a machine is all bad, per se.

it has to be run by serious principles, and rule of law for all equally.

 i do think its baser baser sides are being hauled up for scrutiny, for millions of cruelly wasted lives too late, and out of this scrutiny will evolve the enlightened systems of capitalism like that embodied by paul hawken, and so tirelessly promoted by chris cook here at ET.

it's not the car, it's the fuel, and the inefficiency...

ramblin' on...

There are no blank spots on the map any more, anywhere on earth. You want a blank spot on the map, you gotta leave the map behind. Jon Krakauer

by melo (melometa4(at)gmail.com) on Mon May 19th, 2008 at 07:35:32 AM EST
[ Parent ]
I have a diary urge.

Interviewer: What do you believe is behind this recent increase in terrorist bombings? Helpmann: Bad sportsmanship
by ceebs (bunchofwankers (at) gmail (dot) com) on Mon May 19th, 2008 at 08:03:36 AM EST
[ Parent ]
Yield to it ;-)

You can't be me, I'm taken
by Sven Triloqvist on Mon May 19th, 2008 at 11:00:04 AM EST
[ Parent ]
Mygnomes and elves are busy hammering it together as we speak

Interviewer: What do you believe is behind this recent increase in terrorist bombings? Helpmann: Bad sportsmanship
by ceebs (bunchofwankers (at) gmail (dot) com) on Mon May 19th, 2008 at 11:53:45 AM EST
[ Parent ]
I can send you some helpers over from Santa's Lapland - they're not too busy at the moment. They'll work for porridge.

You can't be me, I'm taken
by Sven Triloqvist on Mon May 19th, 2008 at 12:43:41 PM EST
[ Parent ]
knowing you they'll be female helpers, and that will knock my workers productivity right down.

Interviewer: What do you believe is behind this recent increase in terrorist bombings? Helpmann: Bad sportsmanship
by ceebs (bunchofwankers (at) gmail (dot) com) on Mon May 19th, 2008 at 01:05:33 PM EST
[ Parent ]
You must have poor elf-confidence ;-)

You can't be me, I'm taken
by Sven Triloqvist on Mon May 19th, 2008 at 01:31:50 PM EST
[ Parent ]
Can you get on with it please - I tapping my foot here, waiting for your first diary since Uncle Fred froze in the outside privy?

You can't be me, I'm taken
by Sven Triloqvist on Mon May 19th, 2008 at 04:36:08 PM EST
[ Parent ]
I am sure Lifecycle Cost calculations have been done to compare centralized v decentralized food and goods distribution. I just haven't seen them - if anyone has a pointer?

In Finland, the family outing to the big boxes has become part of the culture, especially where the big boxes offer other community possibilities such as sports, live entertainment, theatre, cinema etc. The question is whether the boxes are sustainable from a transport POV. They are built greenfield because parking space is cheap, but basically they are displaced main streets.

You can't be me, I'm taken

by Sven Triloqvist on Mon May 19th, 2008 at 11:13:57 AM EST
[ Parent ]
is only really effective against your own population rather than any external threats  

Well, yes.  

You say that like someone made a mistake, or doesn't understand their business.  But really, there are no external threats.  

To be less arch about it:  The destruction of public space is the deeper point.  No democracy can remain in the hands of the people if public space is eliminated.  This is understood, and plans are made accordingly.  

by Gaianne on Mon May 19th, 2008 at 11:04:24 PM EST
[ Parent ]
Well whadda ya know. Tokmanni just announced they'll be going public in 2010 to finance a launch into Russia.

You can't be me, I'm taken
by Sven Triloqvist on Mon May 19th, 2008 at 02:39:59 PM EST
Entertaining and informative.  

Thanks

If sanity be culturally normative, then by the norms of this culture I claim insanity.

by ARGeezer (argeezer@yahoo.com) on Tue May 20th, 2008 at 01:32:13 AM EST
The Minister of Housing, Jan Vapaavuori, has today ordered a report on all large shoppng mall projects in Finland. The report will be compiled by all of Finland's regional environment agencies.

Also the court case concerning the stabbing of Mr S begins to today. Part of the case, at Mr S's request, will be held in camera.

You can't be me, I'm taken

by Sven Triloqvist on Tue May 20th, 2008 at 04:04:49 AM EST
Hopefully it will be held in your camera.  ;-)

Skennah Kowa
by Crazy Horse on Tue May 20th, 2008 at 08:15:35 AM EST
[ Parent ]
More news today in the curiouser and curiouser department: more than 20 MPs have now rushed to correct their donation information this week. These include Mr Vapaavuori - the minister who has just refused planning permission to the new Ideapark, while apparently taking money from them. I suppose one could say kindly that this proves there is no quid pro quo.

PM Matti Vanhanen has just announced that Finland is in a deep political crisis because so many MPs have broken the law on campaign financing. It ain't over till it's over, and your erstwhile sleuth will remain on the case with a bottle of Caol Ila, a box of Cubans and his faithful drug-sniffer canine 'Kiitos' until they are all brought to justice, or at least to ridicule.

But more interestingly, the key figure in the scandal is emerging as a Mr Tapani Yli-Saunamäki (Mr Over-Sauna-Hill). Mr Yli-Saunamäki's fingers can be found in many historical campaign pies, and he, apparently, is the one recommending who gets what from the infamous 'Community Development' fund.

He is the vice-managing director of the Nova Group. I quote from their website "Upgrading buildings, shopping centres and logistical solutions; sales and rental of existing business premises; a wide range of development work and expertise in land use and town planning are all part of the daily work of Nova Group." It is not big - 11 M€ turnover 07 - but evidently powerful.

He came up today with one of those classic quotes that we love so much. "We are donating money to campaigns because today it is so expensive that only rich people can afford to campaign".

You can't be me, I'm taken

by Sven Triloqvist on Tue May 20th, 2008 at 10:35:38 AM EST
[ Parent ]
Hopefully, if Mr. Yli-Saunamäki's fingers can be found in many campaign pies, none of them are British Pies.

Further, while i approve of any political monitoring (or any other activity) accompanied by a bottle of Caol Ila, as a humanist, i strongly suggest you refrain from "a box of Cubans."  As you well know, that is against the Geneva conventions, and as you are not privileged to be amurkan, you must abide by them.  Perhaps a box of Icelanders would do?

Skennah Kowa

by Crazy Horse on Tue May 20th, 2008 at 02:26:40 PM EST
[ Parent ]
Sven, have you (or has anyone else here, for that matter) ever read The Cave by Jose Saramago?
by the stormy present (stormypresent aaaaaaat gmail etc) on Tue May 20th, 2008 at 09:54:58 AM EST
I have not. I should.

I will make an important admission: I have read very few books since lying happily on a table and having my eyes cut open with lasers. Whatever drug it is they give you, it certainly removes all panic.

I mostly buy non-linear books today ie dip in, dip out. I usally have several around at the same time and read here and there in bed, in a wiki-style meandering. The themes are mostly related to deep background on work projects: so at the moment on the go I have a book on ubiquitous computing, the computational beauty of nature, a Japanese collection of diagram designs, and another old one 'Maps of the Mind'. Kind of magpie reading - I pick up whatever glitters.

I don't watch TV at all, but I do watch a lot of DVDs - both commercial and obscure. I'm getting into podcasts too.

You can't be me, I'm taken

by Sven Triloqvist on Tue May 20th, 2008 at 10:11:38 AM EST
[ Parent ]


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