City’s role is not to add but to reduce uncertainty

Shutting down of the Jollas manor company is a wake-up call for Helsinki on how it helps entrepreneurs (*). Before giving up the company battled with multiple problems, like many in these difficult times. Last blow was the city’s decision not to extend the rental contract that was needed to justify investments to survive difficult times. Unfortunately it is not the only one of its kind. Role of the city is not to add but to reduce uncertainty, because predictability is the most valuable asset that a city can provide to entrepreneurs.

Building a profitable company into a unique building like Jollas manor requires great amounts of time and money. The three year rental contract offered by the city is far too short in this kind of property, and not reasonable compared to risk taken by the entrepreneur. Fairer model would be for example 3+5, in which the contract is first offered for three years with an option to extend by five years. In case of Jollas manor, the entrepreneur had to convince the city to let the property, then take part in a concepting competition and finally build the company.

Representative from the Premises Center of City of Helsinki commented the topic (**): “It is currently a known issue that there is a shortage of resources. We have to prioritize our work, because the core mission of the city is to manage service properties and maintain schools and daycare centers.” In addition to the core mission the Premises Center manages a large variety of properties, starting from small kiosks to large complexes like Suvilahti, that are not its core focus. In larger properties, the entire property is let out to an external operator, which lets smaller properties. In smaller properties, the same can be implemented by bundling properties and outsourcing real estate management to an external management company.

(*) Jollaksen kartanon toiminta päättyy: https://jollaksenkartano.fi/jollaksen-kartanon-toiminta-paattyy/

(**) Helsingin Sanomat 9.4: Helsinki ihmettelee yrittäjän äkkilähtöä Jollaksen kartanosta – Tilapäällikkö: ”Miksi hän tällaiseen ratkaisuun päätyi?” https://www.hs.fi/kaupunki/helsinki/art-2000007910099.html

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