Startup Cities in Brazil - The Cidade Pedra Branca Case
In recent years, private communities and real estate developments have been scaling up across the globe. In countries like Brazil, there has been a rise of planned neighborhoods that are privately-designed, financed, built and operated.
Introduction
In recent years, private communities and real estate developments have been scaling up across the globe. In countries like Brazil, there has been a rise of planned neighborhoods that are privately-designed, financed, built and operated.
The success of planned neighborhoods like Alphaville, in São Paulo, resulted in these projects growing in size, scope and number. What started as gated communities and closed condominiums in the 70s turned into developments that can only be categorized as cities.
During the research phase of the Startup Cities map, the Adrianople Group analyzed a number of these projects in many Brazilian states, such as Rio Grande do Sul, Santa Catarina or Ceará. In today’s article, we will be exploring the case of Cidade Pedra Branca.
A New Urbanist Approach
Cidade Pedra Branca, also named “Pedra Branca Creative City”, is a private city-neighborhood in the municipality of Palhoça, Brazil. Palhoça is a municipality of 178.679 inhabitants, located in the Greater Florianópolis region of 1.189.947 inhabitants, the metropolitan area of Santa Catarina’s namesake capital city.
The project dates back to the late 90s, when initial plans of transforming the Gomes family’s 250ha farm into a differentiated, mixed-use neighborhood were made. The city derives its name from the “Pedra Branca” or “white rock”, a famous landmark of the region which can be seen from the plot.
In the late 90s, the plot that gave origin to Pedra Branca was complete greenfield, unlike many of other similar projects today, that already start with a certain level of development.
The implementation of the first stage of the Pedra Branca neighborhood started in 1999 with a residential subdivision and a campus of Unisul, a private university with 11 units in Santa Catarina. The successful negotiation to bring Unisul to the plot was vital to the project’s early success. Indeed, Pedra Branca was originally named “Pedra Branca University City”, as the anchor tenant that brought life and movement into the development was Unisul. In this initial phase from 1999 to 2005, 2,000 lots were rapidly put on the market, with around 200 to 300 lots being sold per year.
After this first phase, the entrepreneurs of the Gomes family sought to learn about more complex and comprehensive initiatives for their development. In 2005, heavily influenced by the book “Place Making - Developing Town Centers, Main Streets, and Urban Villages” by Charles C. Bohl, the group participates in several congresses, seminars, lectures and workshops, in Brazil and abroad, on the topic of New Urbanism.
As a result, the entire development becomes heavily influenced by the banners of New and Sustainable Urbanism. As stated by Pedra Branca, these included "defending the recovery of the sense of place, the opposition to urban sprawl and the strong dependence on the automobile, and learning from the past".
This motivated the group to hire the DPZ Latin America office, from Miami, one of the mentors of the New Urbanism movement that “proposes the creation of new centralities that are more compact, denser, more complete, and more connected.”
Quoting Cidade Pedra Branca’s website:
“In this context, the new urbanism preaches a new look. A mixed city, a rescue from centrality where people can live, work, study, and have fun in the same place. Adding to this vision and to the American green building certification movement, Pedra Branca fell in love with this concept and understood that cities have a great role in the transformation to a more sustainable world. And since then, it has spared no efforts to pioneer this implementation in Brazil.”
The process of creating the Pedra Branca Masterplan involved 11 architecture and urbanism offices, national and international consultants and three laboratories of the UFSC, the Federal University of Santa Catarina. From the very beginning city’s masterplan was made to accommodate 40.000 inhabitants.
2010 marks the launch of the new center, with the first sales showroom building inaugurated. In 2013 the first two mixed-use blocks with ten apartment, office, and retail buildings, as well as the new central square and the shared street where the Passeio Pedra Branca - a street for gastronomy, culture, and leisure - were delivered, bringing more life to the development. With these deliveries, not only the residents of the neighborhood, but from the whole region began to come and spend time in the new center of Cidade Pedra Branca.
The New Urbanist influences can be seen in many facets of the project, but in general on Pedra Branca’s focus on connectivity, pedestrian priority and mixed use of land - the latter demonstrated by Pedra Branca’s residential, educational, commercial and industrial components.
While there is a preference for density and efficient use of space, there are also zoning rules integrated in the development that, for example, allow every building to get sunshine time. The city center has free WiFi, which is unusual for Brazilian standards.
The city center was the first in the country to implement the concept of a shared street, with curbless sidewalks at the same level as the road, facilitating urban mobility and requiring cars to slow down. The sidewalks are large - Passeio Pedra Branca is 8m wide - to serve not only as a walkway, but also as a place for bicycles. The Passeios and the center square combine commerce, services and leisure and are the location where frequent community events take place.
Areas that are not yet densified are being used for other purposes and developments, such as sports fields, cycling tracks and open-air gyms, to maintain human movement and contribute to safety. And, although a small defined section of Pedra Branca is a closed condominium (Reserva da Pedra), most of the development is open to the public.
On the sustainability side, worthy of note is that Pedra Branca had the first Gold and Silver LEED certified buildings in the state of Santa Catarina. LEED, acronym for Leadership in Energy and Environmental Design, is one of the most widely used green building certification programs worldwide. The buildings have rainwater capture and reuse, solar energy use for water heating or photovoltaic, and residual waste use with garbage separation.
Economics of Pedra Branca
Cidade Pedra Branca started with a university and residential development. High-end residential units were built around the university and the streets adjacent to a lake located in the area.
The Unisul in Pedra Branca offers courses in Engineering, Medicine, Psychology, Dentistry, Naturology, and other Health-related areas. The campus also offers courses in Cinema and Communication, Law, Administration, Accounting, Gastronomy, and Technology.
The university infrastructure includes an aquatic complex with swimming pools, a sports gym, cafeterias, a library, a center for natural practices, as well as laboratories and specialized clinics for practical classes, which integrate the teaching, research, and extension activities.
Over time, Pedra Branca brought in an industrial area with its tecnopark, and then developed the commercial aspect in the city.
The Pedra Branca tecnopark is an industrial area launched in 2013 with 100 plots, located exactly next to an existing industrial area of Palhoça that borders the plot.
In Phase 1 of the development, the technopark was occupied by companies in various fields, including manufacturing (i.e. furniture), assembly, warehousing, as well as services such as event planning, among others.
Now in Phase 2, higher value-added industries such as cosmetics and pharmaceutical companies are moving in, although existing businesses such as warehousing remain present. There are also commercial buildings with office spaces outside of the technopark. However, every polluting business is limited to the industrial district.
By 2015, the city starts turning into a “creative” city, attracting more and more startups and technology companies, which install themselves in the central commercial area and also in the technopark. Overall, companies with more employees in sectors such as telephony and mass software stay in the technopark, while smaller companies (with 10 employees for example) locate to the commercial area.
Although the whole Greater Florianópolis region has grown into a technology pole nowadays, Palhoça has a number of incentives to try and make itself more attractive than the capital, incentives which are related to Pedra Branca and will be explored further in the governance section..
The latest and ongoing development is the Aeropark, an aeronautic, industrial and commercial space started in 2016 and with its first phase delivered in 2018. The Aeropark is implemented next to the Santa Catarina Aeroclub, in the border of Cidade Pedra Branca and the municipality of São José.
Capitalizing on the lack of space to leave aircrafts close to Santa Catarina’s capital, Pedra Branca created an area with 331 commercial lots and 44 hangar lots, with direct access to the aeroclub and complete infrastructure.
"The hangars include, besides the aircraft parking, maintenance and preparation spaces, internal areas with lounges, support and rest areas for the pilots; and external areas, with auxiliary tracks and dry squares.”
The group is also expanding horizontally by engaging in similar urban development projects in other municipalities such as Joinville and Florianópolis, both in the state of Santa Catarina.
As can be noticed, for all of the city’s projects, the stages of construction and sale are phased. This is in order to pace the project development costs, absorb and help grow existing demand while not ruining the financials with excess supply.
Currently, Pedra Branca has an elementary school, a university and high-end job opportunities all inside the development, fulfilling the initial vision of a city where its inhabitants can live, work, study and have fun.
The neighborhood registers a population of 12,000 residents, 8,000 workers, 7,000 students and over 1,100 companies installed in the city. Many of the companies installed in Pedra Branca are active at a national level.
At the moment, all the lots in the city have already been sold, including 700 apartments and 400 office rooms in the center alone, with commercial and industrial plots still available at Aeropark.
In 2004, a m² of real estate in Cidade Pedra Branca was priced at 2.500 Brazilian reais. In 2021, that value was over 3x higher, at 9.000 reais (~1.880 USD at the date of writing. This is double the average price in Palhoça (4.544 BRL/m²) and even higher than the center of Florianópolis (8.529 BRL/m²), one of the capital’s top 5 most expensive neighborhoods.
Infrastructure and Public Goods
The Pedra Branca area has all of its infrastructure facilities underground. This includes drinking water, sanitary sewage, reuse water, medium and low voltage electricity, public lighting, telephony, fiber optics, and natural gas.
This is in contrast to most of Brazil, which relies on overhead wiring at the light poles. Underground wiring not only reduces maintenance and operation costs of the networks, but also reduces the risk of power supply interruptions.
Water and sewage management is done by the Pedra Branca Water and Sewage System (SAE), which boasts impressive results: The neighborhood has 100% coverage of the sewage collection network and the water loss rate is below 10%.
For reference, as late as 2020, around 47.4% of the population in the southern region of Brazil have access to the sewage network. The South, along with the Southeast, is one of the most developed regions of the country.
Besides the sewage and water systems, SAE is also responsible for the voluntary delivery posts for recyclables and for the neighborhood's organic urban gardens. Besides the gardens, the city's sidewalks have abundant and diverse vegetation, with priority for species native to the Atlantic Forest, the predominant biome of the Brazilian coast.
Pedra Branca also gives great importance to the use of bicycles, having a total length of 15 km of bike lanes.
The development also boasts a high level of security, which is an important aspect of the project that increases its attractiveness and is frequently used for marketing purposes.
Brazil is the country with the 2nd highest number of homicides in the world, and although Santa Catarina is the 2nd safest state in the federation by this metric (per capita), safety continues to be a decisive factor for Brazilians migrating within the country.
Safety is guaranteed by a security concept composed of many layers. To start with, urbanism best practices incentivize people to move around the city, not leaving any areas deserted or isolated. This is complemented by ample public lighting to provide visibility all around at night time.
Then, there comes the private security layer. The city has 4 entrances with monitoring and security, which identifies the license plate of any car and keeps track of where it enters and leaves. The entire neighborhood is monitored by cameras, which are directly linked to the Brazilian military police’s IT systems.
Private security guards with segways and motor vehicles make regular rounds around the city. In case of trouble, the private security escorts the troublemaking individuals until the police arrives and contains them.
Last but not least, Pedra Branca works in many ways to build a sense of community in the city, most notably with its resident’s association, which contributes to their security concept.
City Governance and Management
Administratively speaking, Cidade Pedra Branca is actually a neighborhood of Palhoça. A very active one, that is.The relationship of Pedra Branca and its associated entities with the municipality is worth exploring in more detail.
Pedra Branca has a non-profit residents association that aims to keep the mission, vision and values of the creative city alive. This association has the support of the city’s developing company, Pedra Branca Empreendimentos Imobiliários S.A. For example, the organization creates campaigns showing the social role of the association.
The purchase contract for a lot in Pedra Branca includes a clause to become a member of the association. The membership is not expensive, with the price associated with the condominium. Membership comes with a number of perks, such as benefits in local commerce, the university and various items.
While the development was and remains privately financed, responsibility for the maintenance of public goods is split between the company, the association and the municipality. For example, road maintenance is paid for by taxes that Pedra Branca residents have to pay just like any other Palhoça resident. As such, road maintenance is done by the municipality.
Because of Pedra Branca’s success, size and strength in the municipality, it can support the association, which in turn engages strongly at the municipal level. This engagement can be exemplified again by the roads. Pedra Branca builds the streets. The maintenance of the streets is done by the municipality. The association, in turn, pressures the municipality to act in response to local problems, for example, to quickly fix a pothole in the road.
The city of Palhoca and many of its neighborhoods have now adopted several urbanism and governance concepts adopted in Pedra branca, such as community-based revitalization of precarious neighborhoods to improve security and social life. In fact, over time, several items of Palhoça’s Municipal Master Plan (PDM), the Brazilian equivalent to a zoning and building code, have been improved upon based on Pedra Branca and its recommendations.
Pedra Branca also works to improve the business environment at a local level. A crowning achievement was the negotiation with the Palhoça City Hall to provide tax incentives to technology companies, making Palhoça fiscally more attractive than the neighboring capital of Florianópolis.
This resulted in the launch of Inova Palhoça, at the Palhoça Exponential Day event in November 2015. This program contemplated three laws, namely 4.292, 4.293 and 192.
- Law 4.292 provides for the Palhoça company development program - Palhoça Investe and creates the Support Fund for Economic Development and Innovation in the Municipality of Palhoça - FADEP, and establishes other provisions.
- Law 4.293 provides for the creation of the municipal program of competitiveness and innovation - Inova Palhoça, which establishes tax and economic benefits for innovative and technology-based companies installed in the city of Palhoça.
- Law 192 amends the wording of the complementary law no. 110, of August 31, 2011 and creates the “palhocense tax bill" program that provides on the generation and use of tax credits for service takers, under the specified terms.
Summing up, the governance of Pedra Branca is in part determined by the developing company, by the resident’s association and the municipality.
The city’s relationship with the municipality of Palhoça is both positive and symbiotic: Pedra Branca depends on Palhoça to provide the municipal legal, zoning and building framework upon which it can operate, but at the same time shares the lessons and best practices learned with the municipality and the other neighborhoods, even actively engaging with the city to develop new policies to improve the business environment.
The economic success of Pedra Branca helps fund the municipality’s budget. In turn, Pedra Branca depends on the municipality to maintain some of its public goods, such as road repair and police enforcement. As a policing mechanism of sorts, the residents association keeps constant pressure on the municipality to ensure that their taxpayer money is being used to provide the public goods that they paid for.
Conclusion
The Pedra Branca Creative City is a commercial and urbanistic success, being recognized as a milestone in urban projects for public and private initiatives in Brazil.
The concept of planned sustainable urbanism applied to real estate developments attracted the attention of the market, academia and institutions in several countries, which earned the project many awards, certifications and international projection.
Important lessons can be drawn from Pedra Branca’s experience in bootstrapping a city’s economy. The city started with an important anchor tenant to base initial demand and gradually expanded into other sectors with an intelligent awareness of its geographic situation.
The technopark was created immediately next to an existing industrial area in Palhoça, to capitalize on existing agglomeration effects. The aeropark project was done as the Greater Florianópolis area was suffering from unmet demand for space to park planes.
As the Greater Florianópolis was becoming a tech pole, the Inova Palhoça program was launched, making the municipality more fiscally competitive to Florianópolis. In the same year, the city was rebranded as a Creative City, aiming to attract more startups and tech companies,
Lastly, by keeping their project accessible to the public and actively engaging with the municipality, Pedra Branca became an integral part of the city, avoiding the frequent negative branding of private neighborhoods labeled as “hideouts of the rich”. This integration brought more commuters, visitors and passersby to its center square and walkways, which in turn provided more customers for local commerce to thrive.
The Pedra Branca team cedes their knowledge of how the city was built with great good will. Various companies visit the site to do case studies; the author of this article too received a full presentation and Q&A session from a local representative to help base his research. Founders engaged in building startup or charter cities in Latin America would do well to study this case in depth.
Learn more about Cidade Pedra Branca and other startup cities in our Startup Cities Map. For more details on Cidade Pedra Branca itself, check the city’s official archives.
This article was translated in English by our internationalization partner Settee.
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