Volume 7, Issue 29 - October 21, 2015
IoT solutions pave way to $4.6 trillion in government spending
Mary Scott Nabers, President/CEO, Strategic Partnerships, Inc.
We're here - right in the middle of the Internet of Things (IoT)!

Environmental sensing ... 3-D printing ... genetic engineering ... smart houses ... self-driving cars ... wearable technology ... regeneration of body parts ... sustainable agriculture methods ... and big data with the capability to analyze anything and everything.

It's a world that few, if any, would have believed possible just three decades ago. But, for those of us living in today's world that relies on technology for almost every critical aspect of life, it's important to grasp the significance of what it all means and find ways to adapt it to our advantage.

In This Issue
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Might Congress actually pass an infrastructure bill?
Long-term transportation bill scheduled for markup in House committee this week
Photo by Steve Jurvetson  is licensed under CC BY 2.0.
Is it possible that the U.S. Congress will actually pass a long-term transportation bill this year?

It's been since 2005 that the federal government has passed a transportation bill that planned for more than two years. And, lately, all that Congress has been able to do is pass short-term bills that provide for several months at a time. The current measure is set to expire Oct. 29.

However, the House of Representatives has now made public a six-year transportation bill, called the Surface Transportation Reauthorization and Reform Act of 2015, and scheduled it for a transportation committee markup Oct. 21. This comes after the Senate passed its own version of a transportation bill in the summer. Whatever happens with this week's hearings on the House bill, it is a certainty that another short-term extension will have to be passed next week. 

But, it does seem possible that something more long-term will get through the House. The next problem would be to reconcile the House and Senate versions of transportation funding bills. The primary problem is determining how to fund the entirety of the six-year bill. One of the complaints of the Senate version from House members was that it guaranteed funding for just half of the bill's duration. The House bill currently has the same issue, though the leaders of the House Ways and Means Committee have been working through options for that particular conundrum.

The funding gap derives from the fact that transportation infrastructure projects are traditionally paid for with money that comes from the federal gas tax, which brings in about $34 billion annually. However, the U.S. Department of Transportation (USDOT) spends about $50 billion each year. That $16 billion gap is the problem.

One suggestion has come from Maryland Congressman John Delaney, who has filed his own bill that would send revenue gained from corporate tax reform to pay for roads and transit projects. The bill, called the Infrastructure 2.0 Act, would add $170 billion to USDOT's Highway Trust Fund over the next six years. It would also use $50 billion to fund the creation of a national infrastructure bank that Delaney estimates could finance as much as $750 billion in transportation projects.

Ohio, Pennsylvania, West Virginia sign energy deal
Three states have seen 85 percent of increase in U.S. natural gas production since 2012
The state governments of Ohio, Pennsylvania and West Virginia have reached an agreement to work together to build their respective energy industries and aid them in developing shale-energy resources. The Marcellus and Utica shale formations run below all three states and contain huge quantities of oil and gas.

"The issues and opportunities facing our growing oil and gas industry do not recognize state lines, making it essential that we work together to help ensure the continued growth we expect to see," Ohio Lt. Gov. Mary Taylor said. "We are seeing tremendous and continued growth in this industry, and we know that can be strengthened by partnering on key areas."

The agreement came in the form of a five-page statement of intent from Gov. Tom Wolf of Pennsylvania, Gov. Earl Ray Tomblin of West Virginia and Ohio Gov. John Kasich. Taylor signed the document and appeared in place of Kasich. 

While no dollar amounts were included in the agreement, each state will cover its own costs in the deal, which runs through 2018.

The agreement includes four areas of cooperation:
  • marketing and promoting the region to businesses;
  • job training to prepare residents to work for shale-energy businesses;
  • planning roads, pipelines and other infrastructure to help transport oil and gas; and
  • research at state institutions to help the industry.
Taylor, Wolf and Tomblin signed the agreement at the Tri-State Shale Summit last week in Morgantown, W.Va. The U.S. Energy Information Administration reports the three states have been the beneficiaries of 85 percent of the increase in U.S. natural gas production since 2012.

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Indiana Gov. Pence proposes $1 billion in road funds
In the face of continued federal delays, Indiana is poised to be the next state to get serious about funding its roads projects. Gov. Mike Pence (pictured) has released a plan that will spend $1 billion to improve the state's roads and bridges. "The infrastructure of the state has contributed to the widening prosperity of the people of the state of Indiana," Pence said when announcing his plan. "This administration knows roads mean jobs." About a quarter of the funding would come from the state's reserves, a withdrawal that would reduce those reserve funds to 11.5 percent of the state budget. That is a departure from Pence's previous stance on the reserves, having stated in the past that the reserves shouldn't dip below 12.5 percent of the budget. The plan also calls for a roughly equal amount to come from debt in the form of bonds and for legislative appropriations of $150 million each of the next three fiscal years, which will take the state through 2020. Whether or not Pence sees his plan implemented, it seems the state will be getting some infusion of money for its roads. "We sincerely appreciate the governor's recognition that road and bridge funding will be our top priority for this next legislative session," House Speaker Brian Bosma said. "We appreciate the governor's proposals and will keep his proposals in mind as we work together to address challenges facing infrastructure funding in both the short term and long term."
GSA to fill long-term telecom services contract
The U.S. General Services Administration (GSA) last week issued a Request for Proposals (RFP) for its $50 billion enterprise infrastructure solutions contract. The search is to find a vendor capable of fulfilling a 15-year telecommunications contract that federal agencies will use to make a transition to more modern communications infrastructure. Proposals are due Jan. 15, 2016, and the agency will select a winner before the end of that year. Federal agencies spend about $2 billion annually on network services through the GSA's current vendors. The GSA has already been working with federal agencies to help prepare them for the transition, having spent almost six years in the transition to the present vendor when making that switch 10 years ago.
Marshfield issues RFP for city hall development
City employees in Marshfield, Wisc., will be getting a new office after the town's common council issued a Request for Proposals (RFP) last week for the redevelopment of Marshfield's city hall. A 2014 architectural study of the facility found problems with its air handling unit, ductwork and the age of hot water boilers, as well as with the fact that it has no overall security system. The RFP allows for either the redevelopment of the current city hall, which is much larger than the city government needs, or an outright purchase of the building for future private development opportunities. If the building is sold, Marshfield Director of Planning and Economic Development Jason Angell (pictured) already has a candidate for the next city hall, a bank branch in town that has recently gone on the market. Angell, though, makes clear that no decisions have been made yet. "This is just testing the waters. This isn't a commitment. This isn't, 'We're selling. We're moving,'" he said. Responses to the RFP are due by Nov. 13 and then will be reviewed by the Board of Public Works and the common council. Finalists will present their plans to the council Dec. 1, with a plan selected by Dec. 8.
Memphis prepares to issue property management RFP
The Beale Street Tourism Development Authority in Memphis, Tenn., is readying its move to hire a day-to-day property manager for the city's entertainment district. The authority's board voted last week to put out a request for proposals (RFP) in November seeking a company to manage the district's day-to-day business. "We have to be very, very careful in whom we entrust management responsibility for Beale Street," Jeff Sanford, a consultant to the authority, said. "Beale Street is the linchpin of the local tourism industry and one of the area's historic treasures. We need to know beyond a shadow of a doubt who we are dealing with." The Beale Street district has 31 properties, 34 businesses and a variety of lease types. Any contract to manage the district will need to be approved by the Memphis City Council. The hiring of a management company will give that firm control of the entertainment district and end two years of direct city control over Beale Street.
Long Beach working on long-range plans for city
The city of Long Beach, Calif., has pulled together what it calls an "innovation team" to determine a strategy that it hopes will move the city forward and bring business and industry to the city. "That is kind of turning the page to being a real 21st century city. It's fast, it's quick, it's thoughtful. It's using research," Mayor Robert Garcia (pictured) said. The team is made up of individuals from such fields as city government, software development, public health and cultural anthropology. They will focus on five initiatives that will aid the city's economic development plans. Among those initiatives is the creation of an online service called "StartupLB Tools for Business," which will aid entrepreneurs wanting to do business in Long Beach. The city will also draw up a high-tech infrastructure master plan and create the Long Beach Center for Innovation. The latter is designed to give businesses a central place to aid the development of their ideas. Innovation team director John Keisler said that a centralized information source is lacking in Long Beach. "We're being told over and over again, there's a need for an aggregator," he said.
San Pedro Creek redevelopment wins approval
Bexar County, Texas, commissioners have committed $125 million to the redevelopment of San Antonio's San Pedro Creek area. The county funds will provide almost two-thirds of the total cost of the project. The city of San Antonio also signed over ownership of $4.1 million worth of city property to the San Antonio River Authority last week. The project is designed to alleviate flood control issues and boost the economic development potential of the western edge of the city's downtown area. It will remove 30 acres and 38 structures from a 100-year flood plain, as well as replace eight street bridges and one railroad bridge. In addition to those improvements, the project will increase park land by 22 acres, adding four miles of trails, six pedestrian bridges and an amphitheater. The project is scheduled to start in the summer of 2016 and be completed within two years.
Golden Gate Bridge in need of suicide barrier
The Golden Gate Bridge, Highway and Transportation District is getting set to issue a Request for Proposals (RFP) for a suicide deterrent net. The project will install a long stainless steel net dropped 20 feet below the bridge's sidewalks along both sides of the span. The net will be manufactured off-site and installed, starting on the east side of the bridge, beginning in 2017. The district will begin accepting bids in January 2016 in a process that should take several months to complete, according to district spokeswoman Priya David Clemens. The bids will have to be approved by the district's board of directors along with the California Department of Transportation (Caltrans) and the Federal Highway Administration. The project's estimated costs are at least $76 million, $20 million of which will come from the district, with $49 million in federal funding paying for the bulk of the project's price tag. The state will pay for the rest. The district said 46 people died in 2013 from jumping off the bridge, the highest total ever.
Denver convention center expansion goes to voters
The Denver conference tourism industry is set to hear if it will get a major boost when voters approve or deny a $700 million expansion of the Colorado Convention Center in the state's capital city. A year-long study by a consulting group ended with the group advocating for the expansion of the convention center as well as the National Western Center, an event center that hosts equestrian performances and the National Western Stock Show. The upgrades to the convention center will include a new 85,000-square-foot meeting and ballroom space, a 50,000-square-foot outdoor terrace located on the roof of the existing convention center and technology improvements that will increase capacity for Wi-Fi and streaming video. The original architects of the center are designing a master plan for the expansion now. Funding would come from extending current taxes that are set to expire in 2023.
El Paso to issue RFP for $180 million downtown arena
El Paso city officials recently agreed to seek proposals from companies to manage construction and operations of a new $180 million cultural and performing arts center in the city's downtown area. The request for proposals (RFP) was released for review last week and will be officially released Oct. 28, city officials dead. The deadline for filing a proposal is Dec. 9, said City Manager Tommy Gonzalez (pictured). "Because projects of this nature are highly specialized and complex, we believe it is important to take the unique step of vetting our purchasing documents to ensure this landmark project continues to advance without delay," Gonzalez said. The company submitting the winning proposal will manage the design and construction of the new arts and culture facility as well as schedule events, recruit tenants and sponsors for the arena.
Wisconsin transportation department to get new home
Wisconsin is preparing to build its Department of Transportation a new headquarters building. The state will demolish the nearly 60-year-old Hill Farms State Transportation building and sell two adjacent properties as part of the project, which will also include construction of a new $150 million, 600,000-square-foot office building and a $36 million parking garage. Department of Transportation employees will continue to work in the current building until the new headquarters is completed, scheduled for early 2018. In addition to the transportation department, the new office building will house the Department of Employee Trust Funds, the Public Service Commission, the Office of the Commissioner of Insurance, the Department of Financial Institutions and the Wisconsin Economic Development Corp. The private development that will take over the land on which the Hill Farms building currently sits will be a mixture of residential and commercial space and possibly a hotel.
Roadmap to upcoming opportunities
Interested in staying ahead of the competition? Then ... take note! Government entities throughout Texas are planning November bond elections.

The bond vote represents contracting work valued at $8.7 billion. New construction, renovation and maintenance projects, road work, new bridges, street improvements, new public safety buildings, parks renovations and water and wastewater projects - this is what the bond funding will cover.

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News About public-private partnerships (P3)

Amtrak issues RFI to redevelop Union Station
Amtrak last week issued a Request for Information (RFI) in an effort to find a private partner to redevelop Chicago's Union Station, which the rail operator owns. The RFI is designed to identify companies interested in "all aspects of project delivery including an implementable Master Development Plan, design, construction, financing the potential operation and maintenance of non-rail assets, as well as identification of expansion opportunities and commercial development in surrounding areas in the West Loop." The effort to establish the public-private partnership (P3) was announced at the same time that Amtrak, the city and a regional transit agency issued a Request for Proposals (RFP) for more immediate improvements needed at the station. Those projects will be jointly funded by Amtrak and the public entities. As for the Master Development Plan,  "Chicago Union Station is an enormous asset to Amtrak as well as the city of Chicago," said Stephen Gardner (pictured), Amtrak's chief of business development. "Amtrak is committed to working in partnership with our stakeholders to launch strategies and make investments that deliver value for the company and help realize the full vision of a vibrant transportation hub interwoven within an integrated mixed-use urban district."
Cape Girardeau to build new convention center
Located in southeastern Missouri and set along the bank of the Mississippi River, Cape Girardeau is hoping to add to its tourist business. The city has agreed to join with a private hotel company and another group of hotel owners to build a convention center and adjacent hotel for Cape Girardeau. In 2014, the city commissioned a study of the feasibility of constructing a convention center and hotel, which determined that such an arrangement would fill an unmet need but would have trouble turning a profit if it were built as solely a private business or a public entity. Thus, this public-private partnership has emerged. The group of hotel owners has agreed to pay 1 percent of its hotel revenue for up to 20 years, and the city will pay 1.5 percent of its revenue from the convention center for the same amount of time. The two funding sources are capped at a combined $6.25 million over the 20 years. Cape Girardeau expects its share to come to about $2.45 million. The private hotel company will fund the rest, about $4.75 million. "This is an exciting public-private partnership," said City Manager Scott Meyer. "Additional tourists support our restaurants, retail and other businesses. The additional revenue to the city will help sustain our infrastructure and support public safety, and we won't have to assume the costs of operation." The hotel will include approximately 168 rooms and a restaurant, and the convention center will contain more than 20,000 square feet of meeting space.
Pittsburgh opens new $150 million transit center
Pittsburgh, Penn., last week opened the rebuilt East Liberty Transit Center, the first step of a larger public-private partnership (P3) that is designed to spark a neighborhood revitalization. The $150 million, six-acre redevelopment pulled funding from about 20 sources, including a $15 million TIGER (Transportation Investment Generating Economic Recovery) grant from the U.S. Department of Transportation (USDOT). "This project is a great example of how public-private partners can successfully work together to produce a project that reconnects communities and neighborhoods," said Terry Garcia-Crews of the Federal Transit Administration. The project will next construct a new street connection, to be called Spirit Street, to link two formerly unconnected neighborhood streets. Pittsburgh Mayor Bill Peduto also announced an affordable housing fund for the East Liberty neighborhood in an effort to ensure current residents are not priced out of the area and forced to leave.
South Carolina issues RFP for on-campus housing P3
The University of South Carolina has issued a Request for Proposals (RFP) in its search for a private developer to build and operate on-campus student housing on the south side of its campus. The developer would have the ability to lease the property for up to 40 years, and the school would share in the profits from renting to students. The new student village will be constructed on property that currently holds four residence halls - Bates House, Bates West, Cliff Apartments and Carolina Gardens - that would need to be demolished. The plans call for replacing the dorms with residential towers of three- to-six-stories each, which could have as many as 4,000 beds. The dorms that will be replaced currently house 1,200 students. The school plans for the new towers to open for business by July 2018. The 18-acre property would also include dining facilities and parking.
Illinois considers P3 to speed Thompson Center sale
The state of Illinois no longer needs the James R. Thompson Center in Chicago and has determined to sell the office building that is the workplace for about 2,200 state employees. The aging building, which was designed by architect Helmut Jahn and is considered a significant landmark by some community groups, requires $100 million in maintenance and has been described as a "wasteful" use of state funding by Gov. Bruce Rauner. Legislation filed last week proposed options to sell or lease the building through a sealed competitive bidding process or the launch of a public-private partnership (P3). In an effort to expedite the sale, the bill also proposed to bypass regulations having to do with appraisals, a requirement to offer the building for sale to other public entities and a 30-day public comment period. "I'm not sure what a public hearing is going to accomplish. This is something that has been considered by different administrations," State Rep. Jim Durkin (pictured) said. "It just doesn't fit the needs of the state."
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