By: Mary Scott Nabers on October 30th, 2019
Don’t Discount National Shift to Public-Private Partnerships
Public-private partnerships (P3s) are being launched somewhere in the U.S. every day. Public officials with critical project needs are seeking alternative funding sources, and almost any version of a P3 is attractive to them. Since the trend appears to be the future, here’s a sampling of what is happening currently.
Upcoming P3 opportunities related to education:
The University of Iowa (UI) is considering the P3 engagement for a multimillion-dollar utilities project. University leaders say the outcome of a study will determine whether or not additional P3s will follow. The university hopes to engage with a private sector partner to build a university power plant that will service the university and also generate additional revenue for the school.
The University of Alabama also is considering a P3 for a utility system. The school has requested proposal responses for financial advisers to help university executives explore the project’s potential. Then, if it is advisable to move forward, the next step will be to develop a solicitation document and seek private sector interest in the project.
Foothill-De Anza Community College District trustees are discussing financial options for the construction and/or renovation of multiple buildings. There is a need to replace a 48-year-old facility with a performing arts center. Additionally, student housing is needed at two campus locations. Financing options under consideration include a P3 engagement, a bond, or a parcel tax measure. This initiative will have to wait for completion of an environmental impact report and approval from the Division of the State Architect, but it appears to be on a fast track.
The University of Minnesota Rochester and the YMCA hope to form a partnership with a third party. The plan is to launch a public-private partnership for student housing. A solicitation process is planned with a December 18 deadline for proposals. The new 150,000-square-foot facility will include 77,000 square feet of living and dining space for 230 first-year students, and the YMCA will utilize 30,000 square feet of space for a wellness center. The new building also will include classrooms, offices, common areas, and a room for the building’s utilities.
The Prince George’s County Public School System, the second largest system in Virginia, plans to use the P3 model to build numerous schools. A request for proposals (RFP) will be issued soon for a private partner to reconstruct four middle schools and build two new middle school campuses. The county has an $8.5 billion construction backlog and hopes the P3 model will cut costs and speed up timelines. A private sector partner will design and finance the construction under a 33-year engagement contract.
Upcoming P3 opportunities related to transportation:
The Georgia Department of Transportation (GDOT) has announced an upcoming Industry Forum that will be held on November 14. The forum will focus on a $1.8 billion State Route 400 Express Lanes project that involves lanes over 16 miles. Following the forum, private companies will be invited to one-on-one meetings with GDOT to discuss interest in a P3 agreement.
Pennsylvania’s Department of Transportation (PennDOT) also is soliciting a P3 for an infrastructure project. PennDOT announced that it is open for unsolicited P3 proposals. Companies have been asked to submit proposals that offer innovative ways to deliver transportation projects across a variety of modes, including roads, bridges, rails, aviation, and ports. Proposals also can include more efficient models to manage existing services and programs. The seven-member Public-Private Transportation Partnership Board will review proposals and make final determinations.
The West Hollywood City Council received an update recently from the Los Angeles County Metropolitan Transportation Authority (Metro) regarding a study related to a Northern Extension of the Crenshaw/LAX Line (CNE). Recommendations included authorizing staff to issue a RFP for a rail integration study and to hold a P3 conference event. The initial study reported that the city could potentially contribute up to $1.3 billion between 2020 and 2065 with potential funding assistance from other sources. The City Council agreed to host a P3 conference or a series of direct consultation sessions to gauge interest from private sector firms. A similar mobilization strategy will be employed when the next steps for the project come to the Metro Board at the end of 2019 or early 2020.
Upcoming P3 opportunities related to services and lodging:
Denver’s council members will likely ask voters to approve an initiative in 2020 that would authorize the city to make broadband Internet accessible to all residents. The initiative would allow Denver to opt out of a 2005 statewide ban, Senate Bill 152, on municipalities spending money on and pursuing their own broadband networks. If the ballot measure passes, Denver officials will explore options for municipal broadband through a city-run network or a P3 contract.
Plans for a luxury hotel, retail, and residential development on the banks of the Zumbro River through a public-private partnership are under discussion. Rochester City Council members voted recently to move forward with a statement of interest for development on city-owned riverfront property. Private sector developers had proposed a $230 million mixed-used development, but when the project failed to materialize, the city stepped up and is seeking new options for launching the project.
Business leaders should take note of these collaborative initiatives that point to a new way of doing things. The trend is strong, and America is moving quickly to embrace collaborative initiatives just as most other countries did decades ago.
Mary Scott Nabers is president and CEO of Strategic Partnerships Inc., a business development company specializing in government contracting and procurement consulting throughout the U.S. Her recently released book, Inside the Infrastructure Revolution: A Roadmap for Building America, is a handbook for contractors, investors and the public at large seeking to explore how public-private partnerships or joint ventures can help finance their infrastructure projects.