Volume 7, Issue 36 - December 16, 2015
Billions being spent on ports - but ROI will be even higher
Mary Scott Nabers, President/CEO, Strategic Partnerships, Inc.
In October 2006, an historic decision was made - the 50-mile-long Panama Canal would be deepened and expanded to allow for the largest ships to pass through its channels. The estimated price tag of more than $4 billion was not a deal-killer, and work was started on one of the largest projects in recent history.

Now, after a decade of work, the Panama Canal is set to open in early 2016. The far-reaching impact has touched numerous other countries, as Panama now offers a challenge for even the largest ports in the United States and Eastern Asia. Returns on investment (ROI) are expected to be even greater.



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Las Vegas rolls out massive transportation plan
Still extremely early in process, plan includes light rail, monorail, pedestrian features
Transportation planners in Las Vegas are shooting high and aiming for big moves. Last week, the Regional Transportation Commission (RTC) of Southern Nevada released its 30-year plan for the city, and it's quite large. Without even taking construction costs into consideration, the price tag for the plan's design hovers between $7 billion and $12 billion.

Called the Transportation Investment Business Plan, it includes a light rail system, an expanded monorail that would connect the city's multiple convention centers and other infrastructure improvements like seven pedestrian bridges (including an "iconic" circular bridge connecting Sahara Avenue and Las Vegas Boulevard South) and elevated sidewalks.

The planned light rail system's expected costs vary according to which option is chosen. It lays out alternatives for trains to run below, above and at street level. It would connect the Las Vegas Strip, downtown and McCarran International Airport. The RTC said it might be able to obtain almost half of the construction costs for the light rail system from federal sources and suggests the project could be a prime opportunity for a public-private partnership (P3).

Among the other features are an expansion of the city's existing monorail that would connect it to the Mandalay Bay and add a new station at the Sands Expo and Convention Center. A trolley would move people downtown, and a high-capacity transit line would be added on Maryland Parkway. These are all in addition to extensive work done to the city's highways and major roads.

The plan focuses on the central part of the Las Vegas metropolitan area, what it refers to as the Core Area. That includes the Las Vegas Strip (and wider Resort Corridor), the downtown area, the University of Nevada Las Vegas and the airport. The RTC breaks out the plan's goals into seven types of projects:
  • Enhance visitor mobility between McCarran International Airport, the Resort Corridor and downtown;
  • Improve pedestrian safety and mobility along Las Vegas Boulevard;
  • Improve connections between convention and event facilities;
  • Improve connectivity between the Core Area and workforce population centers;
  • Improve Core Area access from I-15;
  • Improve downtown circulation and access; and
  • Implement policies and programs that support transportation infrastructure coordination and implementation.
The transportation commission plans to bring its vision to the Las Vegas Convention and Visitors Authority and the Southern Nevada Tourism Infrastructure Committee in the new year.

California developing vendor ranking pilot program
State Department of Technology working with private sector to develop program
Every six to nine weeks throughout the school year, students receive a report card from their teachers. They serve to let the kids and their parents know how the students are performing, whether they're meeting expectations and where they might need to improve. That kind of in-progress notice is important for students.

The state of California thinks it could work for companies providing information technology (IT) services to the government as well. The California Department of Technology (CDT) last week launched a pilot program to test a system that will rank private companies that contract to do business with state agencies.

California has been developing the rating system - called the Contractor Performance Evaluation Scorecard - for more than a year. That work has included hosting public forums and private meetings with individuals in state government as well as representatives from the private sector. The pilot program will provide the CDT with feedback about how the scorecard operates and allow the department to amend it as needed.

"The idea will be, once we get feedback, then we're going to go out and test drive it," CDT Director Carlos Ramos (pictured) said. "We're going to pilot it and probably make some more adjustments, and then start using it on a pretty regular basis moving forward."

The program will go into effect in 2016.

It will grade vendors on five key performance indicators (KPI) that include scope of a project, its schedule, the quality of the product or service and timeliness. The ranking criteria will be clear to vendors and included in requests for proposals (RFP) before contracts are awarded. Vendors will also have a chance to appeal their evaluations to the state.

"Our intent is to publish these key performance indicators and let folks know, before you come in, that we are going to be rating performance," Ramos said. "Our intent is to bake these into RFPs and to bake them into project contracts, as well, so that you know going in we're going to be rating you."

Ramos is optimistic about the program, which may be unique to state governments but is similar to a federal program, he said. He said that it also will be of benefit to both the state and the vendors themselves, who will have a clear understanding of what's expected of them and a clear route to appeal if they deem a rendered verdict unfair.

"From my perspective, I think it's going to improve performance on both sides," Ramos said.
Government Contracting Pipeline will not publish next week
In observance of the Christmas holidays, Government Contracting Pipeline will not publish next Wednesday, Dec. 23. We will resume our regular publication dates Wednesday, Dec. 30.

The offices of Strategic Partnerships, Inc., will be closed Thursday and Friday, Dec. 24 and 25, for Christmas. Our offices will open again at 8:30 a.m., Monday, Dec. 28.

Have a Merry Christmas and a safe and happy holiday!

Upcoming contracting opportunities

Seattle considering long-range transportation plan
Seattle-area voters might get the chance in November 2016 to consider taxing themselves an additional $200 per year for as long as 55 years. The funding would go toward what's known as Sound Transit 3 (ST3), the long-range plan for regional transportation agency Sound Transit. Early in December, the agency presented three plans: 15-year, 20-year and 25-year construction options. The plans focus on expanding the city's light rail system, and the largest would include a second rail tunnel downtown. That's the 25-year, $27 billion plan that would bring light rail service to the cities of Everett, Tacoma, Redmond, Issaquah, Ballard and West Seattle. The idea does have its critics, however. A member of one such group, Coalition for Effective Transportation Alternatives, said, "We would agree Seattle needs another tunnel. It should be for buses, not for trains." A draft plan is due by March 2016, and a final transit board decision is expected in June 2016. The taxes could extend as much as three decades beyond completion of construction, to pay off bond debts.
Southold voters approve $7.76 million school bond
Voters have approved a $7.76 million bond package that will pay for the bulk of nearly $10 million worth of improvements for the facilities within Southold Union Free School District on New York's Long Island. "Now we get to work," Superintendent David Gamberg said. "We believe this to be a very positive result for the entire Southold community." Among the capital improvement projects included in the package will be a new track and multi-sport athletic field with synthetic turf, reconstructed parking areas with bus loops and student drop-off zones and the conversion of the existing weight room into a TV production studio. The district's elementary school will also benefit from upgrades to its library media center. Construction will start in 2017 and take about two years to complete. A previous bond package, passed in 1998, is scheduled to be paid off in 2018.
Boston Green Line extension project may be re-bid
After many delays and skyrocketing costs, the Massachusetts Bay Transportation Authority (MBTA) has decided to cancel the contracts of several vendors on the extension project for Boston's Green Line rail system. The general contractor, the project manager and the final designer all saw their contracts terminated this month. Consultants hired by the MBTA have recommended the transit authority reopen the project for bidding. The authority will open a search for a new manager to oversee the project, but state officials have said that it is still possible the entire project may be scrapped. However, it is also still a possibility that the remaining design and construction work will be put out to bid once again. "We're going to start with a clean slate and try to get a handle on the cost," Monica Tibbits-Nutt (pictured), a member of the MBTA's fiscal control board, said of the decision to hire a new manager. "At that point, we can try to make decisions. We owe it to the public."
USDOT launches $50 million Smart City Challenge
The U.S. Department of Transportation (USDOT) last week announced its $40 million Smart City Challenge, a competition targeting mid-size American cities. The objective is to increase the use of technology to improve the way transportation systems move people and products and to do so by encouraging local governments to offer their own solutions rather than having one imposed from the federal level. Cities with populations between 200,000 and 850,000 will compete in the challenge, and the winner will be awarded up to $40 million from the USDOT to be used for design and implementation of its plan. Additionally, there is another $10 million award available from private investment firm Vulcan, Inc., to help establish a partnership with others involved in developing transportation technology innovations. The Smart City Challenge stems from the USDOT's Beyond Traffic report issued earlier in the year. The report noted that the nation's population, particularly in cities, is growing far faster than transportation solutions can be implemented. The study indicated that the United States will add 70 million more people over the next three decades, adding to local transportation headaches. USDOT officials are seeking solutions implemented in one city that can be replicated in others throughout the country.
New $2.3B convention center in Las Vegas progressing
Rendering courtesy of the Las Vegas Convention and Visitors Authority
The Las Vegas Convention and Visitors Authority is progressing in its plan to update and expand the Las Vegas Convention Center. The project has four phases, the first of which was begun early in 2015 with the $182.5-million acquisition of the Riviera hotel. After that building is demolished - a project that is for now indefinite but should be completed before March 2017 - phase two can begin. That will feature the construction of an $860-million, 1.4 million-square-foot addition to the convention center and is scheduled to be completed by the end of 2020. Included in the addition is a new exhibition hall with 600,000 square feet of space. Phase three will include renovations to the existing convention center, updating exhibit halls and meeting rooms, as well as adding new meeting rooms and a public lobby on the facility's east side. Scheduled to run between 2020 and 2022, that phase of construction will cost $540 million. The fourth phase is still undetermined. It will make permanent use of the site of the Riviera. Until then, that land will be turned into an outdoor exhibit space. The Southern Nevada Tourism Infrastructure Committee was appointed by Gov. Brian Sandoval and has responsibility for oversight of the convention center expansion and other projects. It is also considering the construction of a stadium venue and many transportation infrastructure upgrades that will accommodate increased tourism and convention business.
Amtrak, Connecticut reach agreement on Hartford line
State officials in Connecticut have talked for more than two decades about the economic development prospects of rail service linking Hartford with New Haven and Springfield, Mass. Last week, the State Bond Commission authorized $174 million of funding to complete a project that will make those conversations reality. The $570 million project will add new service designed for commuters and have 17 daily round trips between New Haven and Hartford and 12 extending to Springfield. The completed line will triple the number of trains between New Haven and Hartford and double the service between Hartford and Springfield. "This will change the way we travel," Gov. Dannel Malloy said. The state will choose a contractor to operate the commuter trains at the start of 2018.
FEMA to pay New Orleans $1.2 billion for street repairs
New Orleans soon will be able to make use of $3 billion in funding to pay for upgrades and repairs to its streets and infrastructure. The Federal Emergency Management Agency (FEMA) last week agreed to pay the city an additional $1.2 billion from its Public Assistance Program to repair the devastation suffered by the city when the levees broke after Hurricane Katrina in 2005. That will be added to $800 million FEMA had previously committed to the city and another almost $1 billion in revenue the city government has collected through additional fees, grants and bond sales. The money will go toward improving the city's deteriorating infrastructure. "This is a huge amount of money, and it's going to go a long way," Mayor Mitch Landrieu (pictured) said. "Every neighborhood in the city will benefit from it." Last week's agreement was made possible after Congress changed the way repair costs are determined after the 2012 devastation of the Northeast in the wake of Superstorm Sandy. Congress changed its rules to allow engineers to estimate a storm's total damage to a city's infrastructure rather than account for every repair individually. City officials say that they will be able to draw down the infrastructure money through reimbursement applications to FEMA and that none of it will require a local match.
Pismo Beach approves $11 million for road project
The Pismo Beach, Calif., City Council last week approved the redesign of a 0.7-mile stretch of Shell Beach Road between Cliff and Terrace avenues, a project that neighborhood groups have been attempting to get online for almost a decade. The project will move overhead utilities underground, install new streetlights and curb extensions to slow traffic and build an offset  multi-use path that could be used by both pedestrians and bicyclists. "This is going to be an incredible facelift for the downtown core," Mayor Shelly Higginbotham said. "It's much needed ... a 10-year journey for that entire community, really, to get to this point." The project was originally budgeted at $12.2 million and funded in part by a $4.1 million grant from the California Department of Transportation (Caltrans). The grant fell through, though, and so the city was forced to cut back the project's scope and move some city funds around to finance the work. Dropped from the wish list were elements such as landscaping, bike racks, drip irrigation and traffic signs.
Planning continues for $200 million JaxPort rail line
The North Florida Transportation Planning Organization (TPO) is considering three options to build a freight rail line through Jacksonville's Northside. The organization coordinates transportation spending in the Jacksonville metropolitan area and has spent the past four years researching the project, finally narrowing it down to the three alternatives. They range in price from $189 million to $217 million. The project is separate from but related to the dredging of the St. Johns River, which will enable the Port of Jacksonville (JaxPort) to accept larger cargo ships. The rail line would do for land-side shipping what the dredging project would do for the port. Florida State Rep. Lake Ray (pictured) has been a proponent of both projects and sees each as necessary to increase Jacksonville's share of international trade. Ray said it's not a "chicken-and-egg" question of which project needs to be completed first. "I think they're both chickens," he said. "They're both alive and well, and I think they both can stand on their own. You don't have to have the deepening to support the argument to have the outer rail connection." The next step in the project will be to turn the research over to a federal agency so that it can conduct its own study. The North Florida TPO did not rank the three options, leaving that choice for the federal study, which should take two years.
Minneapolis approves $1.5 billion light rail extension
The Minneapolis Metropolitan Council has approved a $1.496 billion, 13-mile light rail extension that will connect the region's northern suburbs to downtown Minneapolis. The Federal Transit Administration (FTA) has committed to paying 49 percent of the costs of the project, with the Counties Transit Improvement Board paying another 31 percent. Hennepin County and the state will split the balance. The rail extension will run from Target Field in Minneapolis to the city's northwestern suburbs and add 11 stations. When completed, the city's Blue Line will run from the Mall of America in Bloomington (south of Minneapolis) to Brooklyn Park (north of the city), with stops throughout Minneapolis and at the Minneapolis-St. Paul International Airport. The extension now will need to gain approval from the county and other municipalities, which must be secured by March 4, 2016.

News about public-private partnerships (P3s)

LSU names two finalists for Nicholson Gateway project
Continuing a nationwide trend, Louisiana State University (LSU) is developing a student residence hall project using a public-private partnership (P3). At the beginning of this month, the LSU Property Foundation selected two finalists to develop the project, called the Nicholson Gateway Development. The selected firm will design, build, finance, operate and maintain new student residence halls and other facilities on a 28-acre site along Nicholson Drive, which the school describes as "the largest underdeveloped tract of university-owned property that is adjacent to the campus core." The LSU Property Foundation issued a request for qualifications (RFQ) in July. Ten companies responded, from which the foundation chose five to submit proposals. And now it is down to two firms. The Nicholson Gateway Development project will include 1,260 apartment-style beds and 410 suite-style beds.  It also will feature residential support amenities, including lounge spaces, study areas, communal gathering places and retail food service. The project is expected to include 30,000 to 50,000 square feet of new retail space to serve residents.
Virginia going with P3 to finance, build I-66 HOT lanes
The Virginia Department of Transportation (VDOT) has announced another public-private partnership (P3) to develop an interstate project outside of the Washington, D.C., metropolitan area. The state has used this development method on multiple transportation projects in recent years but had also considered a more traditional financing route for this project. This latest P3 will build and operate high-occupancy toll (HOT) lanes on I-66 outside the Capital Beltway. The private partner has not yet been identified, but VDOT will likely release the project for bids in 2016. According to transportation officials, the maximum public contribution to the project would be $600 million. The private partner would carry the financial risk if the traffic volume is lower than expected, which could cause the resulting toll revenue to fall short of expectations. The state will owe the private concessionaire if VDOT chooses to add non-tolled lanes to I-66 within the corridor or if the Orange Line light rail system is extended into the corridor within the first decade of the agreement.
EKU to use private developer for new $75 million dorm
The trend of using private developers to finance and build public university dorms is particularly notable in Kentucky. Following similar deals at both the University of Kentucky and the University of Louisville, Eastern Kentucky University (EKU) this month announced a deal with two developers to build two new residence halls on campus. The $75 million project will add 1,100 beds and open in the fall of 2017. The two new dorms will replace two aging campus residence halls. "These new facilities will change the face of our university forever," EKU President Michael Benson (pictured) said. "Additions such as these new residence halls are part of our revitalization program, which is totally focused on improving and enhancing the student experience."
New Hampshire considers P3 for commuter rail
The New Hampshire state legislature passed two bills earlier this year that may lead to the state using a public-private partnership (P3) to build out a commuter rail line in the state. One of the bills will streamline the New Hampshire Rail Transit Authority, and the other created a legislative committee to study the possibility of using P3s to finance and build passenger rail and other transportation projects. Rail advocates are trying to get the state to build commuter rail service from Massachusetts into Nashua and Manchester. Their argument is that the transportation alternative will help alleviate traffic congestion in Nashua on Route 3 and Manchester on Interstate 93. One study commissioned to explore the possibility estimated the project would cost $246 million to build station infrastructure and rail upgrades from Boston through Nashua to Manchester. The operating costs for the new commuter line were estimated to come in at $11 million per year.
Developers get funding for Arlington's 101 Center
Two developers have secured the funding needed to commence work on the initial phase of Arlington City Center, a public-private partnership (P3) with the city of Arlington, Texas. The project is designed to encourage the redevelopment of the city's central area. The first phase of the project is called the 101 Center and consists of an upscale mixed-use development planned for a 2.35-acre tract across from Arlington's city hall and two blocks from The University of Texas at Arlington campus. The land was formerly the home of a public library. As part of the project, the developer will construct a parking garage, to be owned by the city and leased back to the developer. The 101 Center will include a new central library, city council chambers, a public plaza and private mixed-use development with 244 apartments and homes. It also will feature about 18,500 square feet of ground-floor retail. Construction on the development is set for completion by June 2017.
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