The port region of Rio de Janeiro is unique in its location, historical relevance and as a natural space for downtown expansion. It is crisscrossed by the most important highways and routes connecting the south, north, west and metropolitan areas of the city. Also, its proximity to two major airports and Rio’s sightseeing spots strengthens the strategic character of these 5 million square meters space.

Strategic location

From the colonial period until the beginning of the Republic, the region was home to the primary port of Brazil and, therefore, is witness to facts that shaped much of what we are today as Brazilians. Streets and buildings express and represent important moments for the construction of our national identity. The encounter of indigenous, European and African cultures produced a great deal of our material and cultural richness, along with the deep social inequalities that continue to characterize Brazilian society.

The reinvention of this urban space happens in a moment when both the country and the city are experiencing a process of economic growth and of reduction of disparities. Revitalization appears as an opportunity to restate and reinforce the dynamic role of the downtown area by attracting new residential and commercial enterprises to occupy the region, while recovering the importance of its memory and identity. Based on parameters of environmental sustainability for urban requalification, the port region transforms itself and assumes the status of an urban space reference focused especially on the wellbeing of people.
The public walk connecting Square XV to Warehouse 8 will give space for pedestrian, bicycle and LRVs circulation.  Electronic model/ Source: CDURP/ City Hall of Rio de Janeiro

Brief history

The evolution of the port region is closely linked to the role of Rio de Janeiro on the national and international scenarios. After the transferring of the slave market to Valongo, the region became a dynamic center for the economy both of the city and the country. This importance was maintained until the decline of the industrial sector in the city, which coincides with technological changes in port operation that led to the relocation of important activities to the Caju pier.
From the seventeenth to the nineteenth century, the sea line was gradually changed by the building of several piers, docks and shipyards. Photo: Alexandre Bragança

In order to meet the demands of port operation, the region literally expanded. From the seventeenth to the nineteenth century, the sea line gradually changed with the building of several piers, docks and shipyards. In the beginning of the twentieth century, a large landfill gave the region its current size. The region advanced approximately 1.2 million square meters over the sea to serve as a support area for operations of the Port of Rio.

This intervention, simultaneous to the opening of Central Avenue (currently Rio Branco Avenue), was part of a series of actions that aimed to modernize the city of Rio de Janeiro. The Central Avenue, then called Sea-to-Sea Avenue, had at one of its ends the Maua Square, passengers’ arrival point, and at the other end it housed the Floriano Square, surrounded by buildings such as the National Library, the Municipal Theatre, the Monroe Palace (which used to house the Senate and has already been demolished), the Pedro Ernesto Palace (currently, the City Council) and the ancient building of the Federal Supreme Court.

Central Avenue connected the port region to the financial, cultural and administrative center of the city. However, in the 1940s, the opening of President Vargas Avenue split Downtown into two parts. In the 1970s, the building of the Perimetral viaduct made the region even more isolated, accelerating its process of deterioration and abandonment.

Throughout the second half of the last century, Rio de Janeiro, on the one hand, experienced a long process of deindustrialization and economic weakening. During this time, the city grew towards the south zone and then Barra da Tijuca, both competing with the historic center. In particular, the expansion to Barra was guided by an occupation style based on large condominiums and shopping centers, creating new patterns of sociability that, nevertheless, did not replace carioca’s cultural trademarks. The “Barra model” did not prove itself capable of filling the role of historic downtown, and neither did it overcome the problems of urban mobility. On the contrary, in terms of dislocation time, Barra is becoming ever more distant.

The urban expansion of Rio was also characterized by the growth of slums and the enlargement of the urban perimeter, with the construction of big housing complexes on the outskirts of the city for the low-income population. The worsening of urban violence - related to deep social inequalities that mark the country - created what became known as the “divided city”, inciting the separation between the “street” (the formal city), the “morro” or “hill” (the slums) an the periphery. The start of the pacification process of slums in Rio gives an opportunity to overcome these dichotomies.
After years of stagnation, Rio lives an exhilarating moment. The process of pacifying communities that were dominated by drug dealing made a significant and positive impact on the real estate market in various parts of the city. The context of economic growth, along with a privileged calendar of half a decade hosting major international events, accentuates the demand for more residencies, hotels and business offices. It is worth mentioning that all of this is happening in the midst of an urban expansion debate, characterized by the search for a sustainable, integrated and people oriented city. Ever since the 1980s, there exists the intention of revitalizing the port zone. In 1987, the Area of Cultural Environment Protection (Apac) was established to preserve neighborhoods such as Saúde, Gamboa and Santo Cristo, a project that became known as Sagas (a combination of the initial letters of these neighborhoods). In the year 2000, the Morro da Providência (Providence Hill), the first slum of Brazil, was declared an Area of Special Social Interest (AEIS).

Studies to revitalize the port region encountered technical, land ownership, and above all, financial problems. In 2009, they resumed and technical aspects were adjusted to a viable pattern from an urban planning, environmental and financial point of view. An unique institutional and financial model, which has as axis the instrument of Consorted Urban Operation, allowed for the creation of effective conditions to revitalize the region and consolidate the project that the city expected for decades.

This instrument of urban policy, which is still poorly used throughout the country, was introduced by the Statute of Cities with the purpose of stimulating the recovery of deteriorated urban areas and to optimize their use, activating spaces already incorporated to the city.

The intention of revitalizing the port region is to take the city back to its origins, to restore its downtown, now as a lively place where people can live, work, occupy public spaces and have fun without any long distances. The intention is to create more areas for walking or using non-motorized and non-polluting means of transportation, thus setting a standard of urban space that, as a result, should positively impact mobility, security and, eventually, people’s quality of life.

Port region with the public walk from the angle of Rodrigues Alves Avenue. Electronic model/Source: CDURP/City Hall of Rio de Janeiro
This model aims an inclusive city by turning the very process of transformation into an opportunity for people, especially those who live in the region, to increase their income and access goods and services that are offered in other neighborhoods. In other words, it allows those who live in the region to really exercise their right to the city.

An innovative strategy of transformation
The Operação Urbana Consorciada da Região do Porto do Rio de Janeiro (Consorted Urban Operation of the Port Region of Rio de Janeiro), known as Porto Maravilha (Wonderful Port), represents a structural and enduring change in the urban landscape of downtown. In order to conduct this transformative process, a new institutional and financial model was arranged, enabling institutional stability and the desired quality in terms of urban, economic and social development. This model aims as well to assist the Municipality in earning part of the gains resulting from the improvement of the region.

According to the Supplementary Law 101/2009, the Consorted Urban Operation, Wonderful Port, has the purpose of promoting the urban reformation of the Area of Special Urban Interest (AEIU) of the port region, through amplifying, articulating and requalifying free spaces of public use. This process only makes sense and has substance if it reaches the goals of offering better quality of life to the current and future residents and of guaranteeing the environmental and socioeconomic sustainability of the region.
The Companhia de Desenvolvimento Urbano da Região do Porto do Rio de Janeiro (Company of Urban Development of the Port Region of Rio de Janeiro) - CDURP was created to manage the Urban Operation. It is a mixed economy business, which has as its main shareholder the Municipality of Rio de Janeiro. In line with the objectives of the Wonderful Port Urban Operation, the urban requalification involves the rebuilding of the entire urban infrastructure of the region, besides maintenance and service provision through a contract of public-private partnership for fifteen years.

In order to make dealings with the real estate market, the Company created the Real State Investment Fund of the Port Region (FIIP), which has as assets the Cepacs and the lands. Another element of this model is the establishment, by law, of fiscal incentives. As part of the model, fiscal incentives that include discounts and exemptions of municipal taxes are offered to enterprises founded in the first years of the operation. Also, procedures for project approval were accelerated in the City Hall.
Resources that come from the air
A Consorted Urban Operation, instrument of urban policy instituted by the Statute of Cities (Federal Law 10.257/2001), consists basically in delimitating, by municipal law, an Area of Special Urban Interest (AEIU). The law redefines the urban parameters and the use of the land of the area, in addition to authorizing the increase of additional construction potential. To use the additional construction potential, one must pay a financial compensation to the Municipality by acquiring Certificates of Additional Construction Potential (Cepacs). In turn, the Municipality must apply resources obtained through the selling of Cepacs to a plan of requalification of the area, which is approved by the same law.

The Cepacs are securities issued by the Municipality. These securities are regulated by the Securities and Exchange Commission of Brazil (CVM) and backed by the right to construct the amount of area defined in the municipal law that created the operation.

According to CVM norms, the Municipality must account to the institution in which collected resources were applied, at the risk of having resources returned if the application does not conform to the requalification plan foreseen in the law that creates the Urban Operation. In the case of Wonderful Port, CDURP is responsible for guaranteeing that resources are adequately used.
The amount and distribution of square meters of additional construction potential in the AEIU are defined by the law which creates the Urban Operation. Similarly, the law defines the equivalence between Cepacs and square meters. This equivalence may vary according to the use (the purpose of the enterprise to be built) and characteristics of the AEIU, which, in fact, constitutes an instrument for inducing the occupation type of the area under Urban Operation.
In the Wonderful Port the amount of square meters for each Cepac varies between different sectors of AEIU. Moreover, a Cepac corresponds to a greater amount in square meters for residential and hotel enterprises. This variance may reach up to 50% in certain sectors. In so doing, the law intends to induce the distribution of types of enterprises, to stimulate house constructions and, consequently, to increase the number of residents in the region.

The amount of Cepacs issued is defined according to established equivalence criteria. The unit value of Cepac is established according to an Economic Viability Study.

In the case of the Wonderful Port, the Law 101/2009 defined an AEIU with 5 million square meters, of which approximately 3.8 million make up the Area of Cultural Environment Protection of the neighborhoods Saúde, Gamboa and Santo Cristo - APAC Sagas (Law 971/1987, regulated by the Decree 7.351/1998), where there was no increase of construction potential. The other 1.2 million correspond mostly to the landfilled portion, which used to serve as a support area for the port of Rio de Janeiro, but no longer holds this function, and that gained about 4 million square meters of construction potential. Although the increase of construction potential is authorized only for a part of the region, it benefits entirely from the urban requalification, including hills such as the Providence.
The area was declared of mixed use, except for polluting activities, and was subdivided into twelve sectors, nine of which had their construction potential increased. To sell this additional construction potential, the law authorized the issuing of 6.4 million Cepacs. In the Wonderful Port Urban Operation, a Cepac can be used in any sector and for any purpose. According to CVM norms, the primary offer of Cepacs in the market must be made in public auctions, in the organized over-the-counter market. However, Cepacs may be freely negotiated in the secondary market before being linked to an enterprise within the AEIU.

In June 2011, CDURP, through the Real Estate Investment Fund of the Port Region, made a public offering of Cepacs in an auction, in a single and indivisible item, at the unit price of R$ 545.00, which represents a total value of R$ 3.5 billion. According to auction rules, the FIIRR commits itself to sell to the winner of the bid, for the same purchase price and within a three years period, land with potential to use 60% of the stock of Cepacs. It is estimated that this land bank is worth R$ 500 thousand.

In return, the winner of the bid assumes the expenses of the urban operation, which are stipulated at R$ 8 billion, to be paid within fifteen years following the disbursement schedule, and expected to rise according to the IPCA index.

In short, the winner of the bid receives the stock of Cepacs and the option to buy lands that use 60% of the stock. As an offset, the winning bidder has fifteen years to operate and raise the value of these assets. This should cover the winner’s expenses with the operation, besides recovering and rewarding its investment. According to the Studies of Economic Viability carried out by CDURP, 25% of the stock of Cepacs would be used by private property lands of the region. CDURP, therefore, commits itself to work for making available lands with potential to use the other 15% left.

The winner of the auction was the Wonderful Port Real Estate Investment Fund, which belongs to the Employee Severance and Indemnity Fund - FGTS, managed by Caixa Econômica Federal. This fund has as options to sell Cepacs on the secondary market, sell lands, sell both assets in joint operations and use these assets to become an associate of enterprises in the region.

Certainly, this description points to ambitious aspects. To match this vision, the implementation of Wonderful Port is based on three strategic components: urban requalification, real estate development and socioeconomic development.

Requalification for a healthy urban environment for people
An innovative solution, the requalification is object of a contract between CDURP and the Concessionária Porto Novo (New Port Dealer). The chosen model to rule the operation is the public-private partnership in the mode of an administrative concession, for an estimated period of fifteen years. The urban requalification involves the construction of new networks of infrastructure and proper urbanization pattern, structuring of the transport system, besides the qualification and extension of urban services provision. The following items present a summary of the main works and services involved in the operation.

Main services
- Preservation and maintenance of the transport system;
- Preservation and maintenance of the green areas and squares;
- Maintenance and repair of public lighting and sidewalks;
- Execution of urban cleansing services;
- Instituting selective waste collection;
- Maintenance of the drainage network and of universal galleries;
- Maintenance of transit signs;
- Setting up and maintenance of bike racks;
- Maintenance and conservation of sightseeing, historic and geographic spots and monuments;
- Assistance to citizens.

Main works
- 4 km of tunnel constructions;
- Re-urbanization of 70 km of routes and 650,000 m2 of sidewalks;
- Reconstruction of 700 km of urban infrastructure networks (water, sewer, drainage, electricity, natural gas, telecommunications, public lightning);
- Creation of 17 km of bikeways;
- Planting of 15 thousand trees;
- Demolition of the Perimetral viaduct (4 km).

The new networks and systems of water, sewer, drainage, natural gas, electric energy, telecommunications and public lightning supply were dimensioned, in long-term, both for population increase and climate changes. With the extension of sidewalks and the adherence to exclusive pedestrian pathways, urbanization standards favor, respectively, on foot, non-motorized and non-polluting public transport mobility. Selective waste collection and intelligent traffic control services, among others, guarantee a significant improvement of the quality of life in the region.

Real estate development with innovation and preservation

The additional potential of construction is applied on lands. From the approximate 1.2 million square meters that had an increase of construction potential, about 75% are lands owned by the Union, federal institutions such as the Cia. Docas do Rio de Janeiro and the extinct Rede Ferroviária Federal, the state of Rio de Janeiro and the Municipality. Part of these real estates are being acquired by the Municipality and integrated as capital in CDURP; another part is being bought directly by the company with operation resources. 

From the 5 million square meters of the Area of Special Urban Interest (AEIU), approximately 3.8 million square meters make up the Area of Cultural Environment Protection (APAC) of neighborhoods Saúde, Gamboa and Santo Cristo. Records describe that Sagas comprises at least 1,500 real estates of historical and architectonic value. Most are private properties and underused. Many are in ruins.

These real estates, of various sizes, are excellent residences, offices, hostels, boutique hotels and cultural enterprises. Once this stock is recovered, it will complement the revitalization, expanding real estate market opportunities.

Map indicating the limits of the Port AEIU, Sagas and Morro da Providência AEIS.

From the 1.2 million square meters left, 75% are occupied by real estates of government institutions and companies. A little over four million square meters of construction potential were added to this part of the AEIU.

Subsectors and maximum number of pavements allowed per area subject to increase of constructive potential.
The added potential varies between sectors according to parameters defined in the Supplementary Law 101/2009. This measure guides the transformation process that integrates both parts of the AEIU, combining physical and aesthetic aspects of the new urban landscape and, above all, social, cultural and economic processes under development in the region.
The port region preserves space and qualities to accommodate a great part of the demand for hotels, residences and business offices in the city. The Wonderful Port appears as an answer in this context, as an unparalleled opportunity to build a new town, where the past constitutes and improves the future. The Law 101/2009 declares the area as mixed use, establishes standards of occupation with distances and setbacks that favor lightning and natural ventilation, besides sustainability rules for new buildings.
FIIPM has negotiated 25% of the stock of Cepacs and another 25% are in advanced stage. Significant enterprises, such as the Olympic Port with about 1,300 residential units, confirm the premise of stimulating the population growth in the region. Hotels and commercial towers are already under construction or in final licensing stage.

The real estate sector perceives these processes as an opportunity for product innovation in aesthetic and technological terms. There are challenges for architects and entrepreneurs: to develop projects that contribute to the vision of the city we wish to build. In every project there should be space for creativity, while, at the same time, maintaining consistency with the exuberant and precious landscape of the region and its identity. To preserve this perspective of the Urban Operation is one of the main tasks of the city hall and, in particular, CDURP.

Value increase of patrimony: the past as a new element

The Wonderful Port area contains 76 heritage sites determined by federal, state and municipal institutions. Most were forgotten and deteriorated. The SL 101/2009 determines that at least 3% of the value obtained with the selling of Cepacs should be destined to improve the material and immaterial patrimony of the area. By means of the Wonderful Port Cultural Program, real estates, such as the Mansion of King João VI, at Mauá Square, the Cultural Center José Bonifácio and the Maritime Sheds, at Gamboa, are being recovered.  Most importantly, these places will have new uses and qualified cultural agendas. The church of San Francis of Prainha, in one of the pathways going up the Morro da Conceição, is also object of bidding for its restoration. Its first edification was in 1696. For the city and its inhabitants, the decision of the program to select this historical site represents the recovery of an extremely important building for Rio de Janeiro.

The Wonderful Port area comprises 76 heritage sites determined by federal, state and municipal intuitions.

Forgotten places, such as the Valongo and the Empress Piers, were literally unearthed and transformed into monuments as a result of the first stage of the work. Other restored sites, such as the Hanging Garden of Valongo, can once again serve the city as leisure and public visiting areas. The support to cultural manifestations of the region reinforces even more the dimension of the immaterial patrimony, which, according to historical records, is the birth of samba.

The Hanging Garden of Valongo was restored and once again serves the city as a leisure and public visiting area.

The urban archeological work, which goes beyond a formal and technical obligation, is enabling an even deeper reviewing of the region, unveiling the historical “layers” of the construction process of the city. By shedding light on this valuable legacy, the Wonderful Port contributes to extending the cultural agenda of the city and to disseminating knowledge. The formerly isolated region is increasingly becoming a potential pole for attracting tourists and residents.

Social inclusion: a city for all
According to the census of the Instituto Brasileiro de Geografia e Estatística (Brazilian Institute of Geography and Statistics) - IBGE, in 2010, a little over thirty thousand people lived in the port region. Most of their families were there for many generations. Estimates indicate that a transformation process results in the increase of value of real estates of the region. Some think this poses a threat to the permanency of current inhabitants. However, according to the implementation strategy of the Wonderful Port, ongoing changes represent great opportunities for this population with respect to urban improvements and public services. The strategic focus is the increase of the social capital of current residents, in order to prevent them from being seduced by the possibility of immediate gains in selling their patrimony.

The work of urban requalification generates thousands of job and business opportunities, besides the construction of new private owned enterprises. This stage, which was named the Economy of Works, is intensive and temporary. At the same time, the new economic organization of the region is already being formed, opening long-term opportunities for generating employments and income. The introduction of new standards of public services and the activities that will occupy real estate enterprises, such as hotels and business offices, indicate a high job demand and the emergence and/or strengthening of productive chains. Allied to these factors, there is also the enormous cultural, touristic and entertainment potential of the region.

Offering basic and middle level vocational training in sectors such as construction, tourism, hospitality and commerce, with priority to the local population, is the key to our strategy and contributes to the growth in numbers of residents involved in construction works and services. Building houses for low and middle income inhabitants in the Sagas area contributes to the occupation of the region. This also stimulates owners of preserved real estates to recover their properties, giving them new uses and, thus, intensifying the revitalization of the region as a whole.

The small e micro-entrepreneurs of the region also deserve special attention. The support for qualifying management and products offered and the mediation for accessing credit and new markets are ongoing actions in this sector, which has great potential in the new growing economy as means for generating jobs and income.

This group of actions forms a strategy to include residents of the region, especially young people, in the process, enabling them to improve their income and continue living there along with new occupants. Taking into account characteristics of the local population, formed by a large number of afro-descendants, this process is consistent with efforts in the country to reduce inequalities. In particular, our effort aims residents of the region.

Final considerations
The Wonderful Port is a people centered transformation process. The real estate development is related to the increase of value of the material and immaterial patrimony of the region. This legacy, once it is recovered and its value grows, will produce a significant rise in the degree of attractiveness through the externalities it represents to new enterprises. Moreover, the Wonderful Port offers a series of conditions to construct a New that comprises the Ancient as an element that enriches this New.

The Art Museum of Rio (MAR) seen from the construction site of the Binary Tunnel at Mauá Square. Photo: Clarice Tenório Barretto.

Both these elements are taken to induce the process of social inclusion. The integration of residents, as workers or as small and micro-entrepreneurs, to the new economic dynamic of the region reinforces their sense of belonging. Building an innovative financial and institutional model, using modern resources for urban requalification, stimulating the development of sustainable technologies for construction and the operation of buildings, all of this makes sense for people to have better quality of life and to recognize themselves as part of a place that has an identity and memory. A lot of the “carioca lifestyle” has its roots in the port region and, despite decades of abandonment, it persists and begins, once again, to be valued. Therefore, the region already presents itself as an excellent option for living, working and leisure. It is all there.

Jorge Arraes and Alberto Silva

This paper was published in the book Cidades em Transformação (Cities in Transformation), edited by Ephim Shluger and Miriam Danowski - October, 2014.