External Affairs Alert – Public-Private Partnerships Perspective – June 2013


State and local budget constraints and the continuing priority of job creation have created a tumultuous environment for public private partnerships, generating a host of issues and opportunities. These fall principally in the areas of community development and “city-building,” the traditional realm of our professional involvement. The emerging “P-3” of private development, ownership, and financing of infrastructure and public facilities is also an area of growing importance.


California Redevelopment – A Cautionary Tale in which expansive success at redeveloping California cities and towns, including major support of affordable housing, led to what might kindly be called a perceived imbalance in the availability of public resources in the face of fiscal crisis and state responsibility for school funding. With the abolishment of redevelopment, the development community is scrambling to find alternatives to address core public-private development issues. Ehud Mouchly, CRE, shares his perspective.

A Bill Authorizing Redevelopment Without Eminent Domain Moving Forward In New Jersey to help redevelopment proceed in a post-Kelo world. Eminent Domain continues to be constrained in state-after-state, refocusing on public uses rather than the public interest, even as it relates to removal of blight as part of redevelopment. Anthony DellaPelle, CRE, brings us up to date on a fascinating New Jersey initiative.

New Markets Tax Credits, 2012 and 2013: A Bit of Help in a Difficult Environment comes with approval of two more years in the American Taxpayer Relief Act of 2012 (fiscal cliff bill) at year end. While very limited in total dollars, the distribution of credits supports projects in severely distressed communities throughout the country. Credits can be used for private projects as well as community facilities and have played a key role in commercial, industrial, and mixed-use properties; as well as charter schools, health centers, energy efficient investment, and training centers. Now is the time to investigate using such credits for projects. 2012 allocations recently have been made, and Community Development Entities (CDEs) are both looking to complete deals and line up projects for their next application. Steve Friedman, CRE, and his colleague Tony Smith provide an update.

What’s Old Is New Again—Using Traditional Planning Tools to Foster Redevelopment: Good Planning Is Always A Good Solution and more and more communities are integrating development economics into planning teams along with land use, urban design, and transportation. Partly encouraged by federal initiatives to integrate transportation, land use, and environmental considerations in support of sustainable communities, the number of multi-disciplinary planning efforts that include “development economics” has increased. Growing opportunities with sub-area or corridor plans and developing areas needing infrastructure, and transit-oriented developments offer an opportunity for CREs to apply their unique real estate and development expertise. Maura Cochran, CRE, profiles a recent and typical assignment.

Creating and Restoring Major Urban Parks and Open Spaces Via Public/Private Partnerships has taken off in the face of constrained public funding. This brings a renewed commitment from the private and philanthropic sectors to create fabulous public spaces which often drive development and value – or simply provide opportunities for fun and inexpensive ways to enjoy quality leisure time. Richard Ward, CRE, profiles Chicago’s Millennium Park (everything you see was paid for privately), as well as three other examples from St. Louis – all of which represent the “tip of an iceberg” of a renaissance in public spaces using private money.

Wisconsin’s NEW Economic Development Initiatives: Job Creation programs pursued by controversial Governor Scott Walker are profiled by Fred Campbell, CRE. Governor Walker has initiated major structural changes to shake up a moribund bureaucracy in an effort to create jobs. The lessons will apply to other states and cities as competition for retention and growth accelerates.

Texas/Southwest offers a slightly different perspective. Traditionally benefitting from federal spending on military and other programs, the area is less pro-active in the traditional state and local sense. But an interesting public/private space travel venture and other nascent projects suggest that, as circumstances change, this area too may begin to explore other options to accomplish key public and community goals. Pete Sellers, CRE, and his colleagues Mark Lautman and Sam Noble, CRE report.

Maryland’s New Public-Private Partnership Legislation takes a dramatic leap forward in streamlining its ability to create public-private partnerships for development of infrastructure and real estate. The legislation allows for creative thinking and does not wait for public offerings: developers and contractors are encouraged to submit unsolicited proposals. Bob Aydukovic, CRE, reports on a new framework that is worthy of consideration in other states as well.

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