Uncertainty is a major factor in urban development as a consequence of a changing society. Major theoretical approaches to urban development, such as place-based leadership or coproduction, emphasize the importance of the public sector. This study aims to enhance the understanding of urban development processes as a collaborative and participatory concept through social innovation. We apply the concept of socially creative milieus to analyze the emergence of social innovation under the constraint of uncertainty. The criteria 'agents of innovation', 'adopters', 'diffusion channels', 'constraints', 'inertia', and 'impacts' are analyzed using a holistic case study in the field of urban development. Our results show that the presence of high social capital supersedes the coercive power of the public sector. By applying the creative milieus approach, environments like the density of networks and contacts in the governance of urban places make innovative development possible.