Marvelous City Air Security

Apropos of our love of the air, I’ve been following the redevelopment of Rio de Janeiro’s main port, which lies near the center of the city on Guanabara Bay near the vicinity of Gamboa, Caju and São Cristóvão. The area is currently hostile to human inhabitation. In the 1960s and 70s under the developmentalist military governments, the waterscape was dissected from the cityscape by means of an elevated freeway, which gashed the area and effectively ensured its utter deterioration. With the awarding of the 2014 World Cup™ and 2016 Olympic Games™, however, Rio™ now reimagines itself as a Global City™. Accordingly, the city has embarked on two massive undertakings in particular that have drawn my attention: the militarized invasion of the Complexo do Alemão favela; and the redevelopment of the port under the plan known as “Porto Maravilha.”

An official description of Porto Maravilha can be found here. If you understand Portuguese, you will enjoy an official video of the project here. Essentially the plan calls for mixed-use residential and commercial developments, the burial of freeways underground, the reinstallation of streetcar/tramways (which disappeared in the early 20th century I believe), construction of pedestrian and bike paths, the building of two new museums, and the temporary location of the Olympic village and other services related to the Games on-site. And because this is to be Rio’s global city, one of the museums — dramatically built on a large jetty of concrete thrust into the waters of Guanabara — will be designed by Santiago Calatrava. Of course™. And since no redevelopment would be complete without culture (it goes without saying), the other museum will be the new house of the Museu de Arte do Rio. Of course™.

My interest lies in how Porto Maravilha will be financed. The entire project is speculative, as all redevelopment projects in fact are. The city government of Rio does not now and will never have sufficient resources to undertake such a massive project. In the past the federal government would have provided funds from its treasury, or obtained loans from the IMF. Today, Rio will raise funding for redevelopment on a promised future of redevelopment bringing profit. So, as is the case with most redevelopment projects nowadays (including waterfront redevelopment in my hometown of Buffalo, NY), the city has sought public-private investment. The city of Rio de Janeiro has partnered with the Caixa Económica, a huge Brazilian bank that holds funds for the Fundo de Garantia do Tempo de Serviço, essentially the Brazilian social security system. Caixa has underwritten the air rights to the Porto Maravilha area to the tune of R$2.5 billion (around US$1.25 billion). In turn, Caixa has bundled, and is reselling, these air rights to private developers as Certificados de Potencial Adicional de Construção (CEPACs), securities which are publicly traded on São Paulo’s BOVESPA, Brazil’s main stock market.

As Shawn T. Amsler writes in a Columbia University Master’s thesis provided by the official Porto Maravilha website:

In Rio de Janeiro, as in previous urban interventions, CEPACs must be purchased from the over-the-counter markets “auction style” by developers planning to build any project within the designated limits of the pertinent Urban Operation that will have a floor area ratio (FAR) exceeding 1.0. The amount of  CEPACs which must be purchased depends on the total floor area of the project in excess of 1.0 FAR. The CEPACs must then be “attached” to the specific parcel where the new development will take place. The quantity of air rights allotted to each CEPAC is assigned according to sector or “equivalency band” within the area of urban operation. (Amsler, 56)

He also describes how the proceeds of the CEPAC auctions will be utlitized:

The City of Rio will use the proceeds from the sale of CEPACs to partially fund the R$ 8 billion worth of planned infrastructure improvements including street upgrades, lighting, drainage and the replacement of the elevated Rodrigues Alves Expressway along the waterfront with the underground tunnel. As the infrastructure is completed, development parcels will be turned over to the private sector. (Amsler, 30)

We tend to think of “city” in terms of solids (lands) in conjunction with liquids (water). Rio de Janeiro, then, would be a land-mass next to a body of water. Modern urban planners, furthermore, would map this solid-liquid configuration in terms of solids (buildings) and voids (space or channels between solids). With Porto Maravilha something else has taken place: the vertical void — air — has been valorized as if a solid. Not quite yet a commodity, the air anticipates future development. And this anticipation is worth precisely R$2.5 billion.

The old joke in the country was that Brazil is the country of the future… and always will be! Under colonial rule, this joke played off of a millenarian promise, that the conquest and colonization of the Americas would prepare “civilization” for the return of the Messiah. Strong messianic force, we might say, which led to weak messianic force after independence. The transfer of imperial rule to (nominal) republican rule in the late 19th century promised a future of development, now understood as an ideal of educated liberal subjects (white ones, at least) roaming around safe and well-planned cities that looked like Paris and making all sorts of rational decisions. This ideal was a void of course, in the sense of an abstraction that could no longer hold water once the military police produced electric cattle prods.

Porto Maravilha represents the liquidation of the messianic joke. The future has arrived… as a securitized investment mechanism to be bundled, bought and sold on the futures market. This future is a void as well, but it is a material void as opposed to an ideal one. A material void, a void-almost-quasi-solid. A void that we call air, already filled by speculative development, a future of real estate development. Not liberal ideal, but neoliberal air. Let us call this, realistically, speculative materialism, far more powerful than any speculative realism.

One of my students, Damien Adia-Marassa (Duke University), who is preparing a brilliant doctoral dissertation on black writing and Machado de Assis, recently alerted me to the fact that part of the Porto Maravilha redevelopment is an archaeological site currently being excavated before it will be re-covered by real estate. The port area of Valongo was the main port-of-entry for millions of African slaves, including close to 800,000 child slaves who were particularly valued because they could be packed more compactly onto slave ships and because they would presumably have a longer work-life. Child slaves were a better “investment.” (This causes me unbearable sadness.) Damien correctly points out that the African men, women and children who came to Valongo wrote the future of history (albeit non-thetically) with their own teeth and bones deposited into the terrain of the new global city.

This is the real air, the material air, that haunts Porto Maravilha. This is the air that cannot be securitized and traded on the BOVESPA.

Nobody, after all, has bothered to ask the air to assess its own value.