Lefebvre: production and creation

I’m still trying to get my head around the chapter from Levebvre’s The Production of Space that we read last week. Something that I find particularly puzzling is the way in which L. first traces a clear-cut distinction between the concept of production and the concept of creation, and then blurs the line between them. More specifically, I wonder how this dialectical move impacts on his answer to the question whether a city is produced or created (73).
Creation, L. suggests, is the process of bringing into existence “works”, understood as irreplaceable and unique “things” (as in “work of art”). Production, on the other hand, is the process of bringing into existence (through organized sequences of repetitive actions, i.e. through labor) “products”, which by definition can be exactly reproduced and lack any of the uniqueness and individuality of works. Insofar as we define works as “unique, original and primordial, as occupying a space yet associated with a particular time” a city like Venice (L.’s example) has to be considered a work, i.e. something that is created rather than produced (73). Yet it has been labored on: “behind Venice the work … there assuredly lay production [sinking pillars, building docks]” (76). This brings L. to conclude that there is no good reason for positing “a radical separation between works of art and products” and that “even in Venice, social space is produced and reproduced in connection with the forces of production” (77).
It seems to me that in the course of this argument L.’s use of “space” shifts. His conclusion (and this is made explicit in the formulation) has to do with 'social' space, unveiled as the ever-changing product of a continuous process of social negotiations reflecting the relations of production. His initial considerations about the city as a work, however, seem to have to do with a different kind of space: I don’t know enough of L.’s work to know whether he would acknowledge the legitimacy of such a notion (I suspect not), but it seems to me that his discussion of the city as a work has to do with what I would call the 'physical' space of the city, its architectonic arrangement and composition. About the latter he seems to say something that is interesting and plausible, but hardly original, namely that the individual elements that make up the city as a whole (its pillars, docks and palazzi) are products of labor, while its overall arrangement, its “monumental unity” as he puts it, is an unplanned surplus value (as Marx would put it), with no single producer or aim behind it.
How is the move from this physical space to social space justified? Is L. appealing to the notion of social space in order to explain the unity of physical space? Is he suggesting, in other words, that the “monumental unity” of the city can only be explained with reference to its social production? And how does this relate to his original question about the status of a city as a work or a product? Is he answering that a city is a product, but a special kind of product, namely, a social one? And does this answer imply that within the notion of social production, so to speak, the very distinction between production and creation collapses?