SPI Insights

Best not to overlook the ever-growing trend of government’s public-private partnerships

Support for public-private partnerships (P3s) continues to mount and federal programs are available to help fund P3 projects. Not only is the federal government encouraging private sector collaboration and investment, guidance for public officials ready to launch the projects is also available now.

The newly launched Regional Infrastructure Accelerators Program has placed assistance centers throughout the nation. Technical guidance is available for the express purpose of building confidence in P3 delivery methods and ensuring successful projects.

Congress has also loosened federal regulations on an important stage of project development – environmental reviews. In the past, the environmental review and permitting process took an average of 4.5 years. Now, the entire process must be completed within a two-year window. With these regulations relaxed, large P3 projects can be expedited much more efficiently.

With P3 projects being launched at every level of government, state lawmakers are also passing legislation that authorizes the delivery method. Many states also are allocating funding for various types of P3 assistance centers.

Tennessee lawmakers recently authorized the use of P3s for the first time in state history. At about the same time, members of the New Mexico House of Representatives voted unanimously in favor of a bill that allows public sector entities statewide to launch P3s for the first time. Pennsylvania’s Department of Transportation is relying on P3s to deliver numerous upcoming transportation infrastructure projects and lawmakers in Colorado just passed legislation to permit use of P3s for accelerating workforce housing projects. At the same time, the lawmakers also allocated $13 million to a Public-Private Collaboration Unit that will oversee P3 projects to redevelop state-owned land.

City leaders in Newport News, Va., are seeking interest from potential private sector partners for an initiative designed to upgrade environmental resources on public land. Components of the upcoming projects are likely to include wetland mitigation banks, construction of a new dam, implementation of an automated metering project and other ecological upgrades. An earlier cost estimate for just a few of the projects included in the scope of work was tagged at a combined $70 million.

City leaders overseeing San Francisco’s public utility corporation will pursue a $50 million P3 project designed to capture and then sell biogas generated from municipal digesters. The P3 delivery method was selected because of benefits to be gained – private sector capital, the ability to transfer risks, and the fact that the project will be managed by experienced parties capable of moving the initiative to completion more quickly. The project will be advertised to bidders in October 2023.

A planned sports complex in Odessa, Texas is expected to cost between $14 million and $25 million based on a scalable design. The proposed recreational facility will be scoped to accommodate six basketball courts and 12 volleyball courts. Future additions to the complex, however, are also planned. A new track (with a projected cost of $1.5 million) and four new baseball fields (costing approximately $10 million) may be included or launched as a second phase of the project. Delivery will likely be through a P3.

The township of Mount Pleasant in New York needs a senior housing facility and plans to deliver it through a P3 engagement. The project would include construction of approximately 20 affordably priced apartments. Local officials want to collaborate with a private company to construct, develop and manage the new facility and there is hope that the selected P3 partner will also develop the remaining acres of property near the housing facility for recreational use. A request for qualifications (RFQ) for prospective private partners will be issued soon.

Seattle’s Parks & Recreation Department will seek a private sector partner to help finance and develop public outdoor space located in the downtown area. The green space will cover 12 city lots. Not only will it provide benefits for citizens, but it will also be designed for sustainability, resilience, and crime prevention. Officials are finalizing plans and final designs so that final cost estimates are possible. Outreach to potential private sector partners will begin soon.

By the end of summer, local planning officials in Kansas City plan to partner with a developer for a P3 for transit-oriented development projects that will add housing, enhance mobility and boost economic development. Officials will hold a pre-proposal conference for potential private partners later this month with the hope of selecting a partner by the end of summer.

The city of Chandler, Ariz., will soon seek a private developer for a P3 project designed to redevelop two vacant city-owned sites. The plan is to construct multi-family affordable housing developments at the sites.

Earlier this month, the governor of Hawaii announced that plans for a new Aloha Stadium were being reconfigured according to a design-build-operate-maintain (DBOM) method of delivery. The state has already allocated $400 million for the project. The project will include construction of the stadium and then operating and maintaining the facility for 30 years. The Stadium Authority, which oversees management of the Aloha Stadium, will meet soon to discuss the plan and outline steps for contracting with a private sector partner.

P3s are becoming common, and the development aspects of the projects offer thousands of diverse contracting opportunities for private sector firms.