Volume 7, Issue 45 - February 24, 2016
Don't believe times are changing? Check out what is happening in Washington, D.C.!
Mary Scott Nabers, President/CEO, Strategic Partnerships, Inc.
The federal government is promoting collaboration and public-private partnerships in a very big way! As a result, significant changes are occurring.

A perfect example of a changing world is the existence of 23 federal agencies that now have offices dedicated specifically to pursuing collaborations with private-sector partners. Would anyone have believed a couple of years ago that the State Department or the Veterans Administration would be soliciting public-private partnerships (P3s)? Probably not - but both agencies have recently launched visionary initiatives.

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High-speed rail line to begin in Northern California
Rail authority switches first segment's location due to cost concerns
Fears of the high costs of having to tunnel through the Tehachapi and San Gabriel mountains have convinced officials with the California High-Speed Rail Authority to begin the state's high-speed rail project in Northern California. The authority had announced in 2012 that the first segment of the rail line would run from Burbank to the Central Valley in Southern California.

The authority last week released a draft business plan that reported the first 250 miles of train track now would be built to run between San Jose and Bakersfield. One goal of the switch is to speed up the process and to get the first trains rolling. Since political will against the project is so strong, proponents are looking to have the rail lines active and transporting passengers as soon as they can.

Another benefit of having the train built near Silicon Valley is that Rail Authority officials have suggested that the region might be easier to mine for private money. Public-private partnerships (P3s) have always been figured into the financing equation for the $64 billion project. Members of the region's business community have applauded the decision to flip the timeline of the construction schedule.

"We are talking about a trip from Madera taking 40 minutes to downtown San Jose when you cannot get from the Almaden Valley to downtown San Jose in 40 minutes," said Carl Guardino (pictured), CEO of the Silicon Valley Leadership Group and a member of the State Transportation Commission. For those not from that area of the country: Madera is a 130-mile drive from San Jose, while Alamden Valley is roughly 15 miles from the city.

"The unemployment rate in the Central Valley is twice the amount as the rest of California," continued Guardino. "And this is going to provide such opportunities for workers throughout the Central Valley and then a way for travelers to get from the Central Valley to jobs in Silicon Valley."

In an effort to give some comfort to rail proponents in Southern California who might be disappointed by the switch in priorities, the business plan included $2 billion in funding for other rail projects in the region.

Among those projects will be a redesigned Union Station in Los Angeles, which will allow trains to arrive and depart on separate tracks and provide for faster access by Metro, Metrolink and Amtrak trains. In addition to that project will be several safety-related efforts to shift car traffic away from train tracks at dangerous intersections throughout the region.

"The Burbank-to-Anaheim corridor is one of the most important," said High Speed Rail Authority Chair Dan Richard. "We are continuing to move aggressively to invest in updating it immediately, even as we plan construction in other places."

USDOT opens up next round of TIGER grant funding
Transportation department makes available $500 million for eighth round of funding
Officials with the U.S. Department of Transportation (USDOT) announced this week that the next round of Transportation Investment Generating Economic Recovery (TIGER) funding will award $500 million.

TIGER grants are made available to surface transportation infrastructure projects "that will have a significant impact on the nation, a metropolitan area or a region." The program focuses on projects that make an economic development impact in their region and improve options for both urban and rural communities in terms of access to surface transportation.

"The TIGER program funds vital transportation projects that provide real benefits to communities all across the country," said Transportation Secretary Anthony Foxx. "Every year, we see hundreds of compelling applications that have the potential to improve people's access to economic opportunities, make people safer and improve their well-being. I am proud that for seven rounds, TIGER has been able to make a valuable contribution to improving our nation's transportation infrastructure, and I look forward to this year's competition."

The TIGER grant program was created to help fund projects that are difficult to fund through traditional means. The federal funding is designed to encourage additional investment from other sources - from private-sector partners, state and local governments, regional planning organizations, ports and transit agencies. According to the USDOT, the $500 million awarded through the 2015 TIGER grant funding is supporting almost three times that amount in overall transportation investment.

Applications are due April 29. There is further information on the TIGER grant program on the USDOT website.

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North Carolina light-rail project gets federal approval
Last week's approval by the Federal Transit Administration (FTA) of the final environmental impact statement (FEIS) will allow a light-rail project in North Carolina's Research Triangle to move forward. The 17-mile rail line would run from Chapel Hill to Durham along transportation corridors anchored by State Highway 54, Interstate 40 and US 15, within the state transportation department's right-of-way. Go Triangle, the regional transit service and planning agency, now has the task of finding funding for the project. The agency is expected to request federal funds for 50 percent of the expected $1.6 billion costs. The rail line's proponents point to the fact that the populations of Chapel Hill and Durham - largely university students and lower- and middle-income workers - are heavy users of public transit. They hope to be able to convince the state legislature to lift the $500,000 spending cap it imposed last year on light-rail projects. "We remain confident that the cap can be lifted," said Jeff Mann, Go Triangle's general manager, who has cited the support of local business and the state's governor.
Seattle voters approve renewal of school levies
Seattle voters earlier this month approved two tax levies that will benefit Seattle Public Schools. The $758.3 million operations levy and the $475.3 million capital levy each passed with more than 70 percent approval, a figure that surprised even their supporters. Both levies were set to expire, and this move by the voters allows them to continue for three (the operations levy) and six years (the capital levy). The operations levy provides more than 25 percent of the district's annual operating budget, according to officials. The capital funds will go toward the renovation of three elementary schools and allow them to be reopened. Those reopened campuses will accommodate an additional 1,500 students to help the district deal with projected enrollment growth. It will also fund the construction of an addition to Ingraham High School.
Chicago considering new express train to O'Hare
The trip from downtown Chicago to O'Hare Airport typically costs about $30 by taxi or rideshare and takes about 40 minutes by train. City officials have launched an effort to cut the travel time by rail in half while still competing with the cab fare. Mayor Rahm Emanuel's office commissioned a feasibility study of an express train from downtown to the airport. The study will research potential routes, come up with a design and determine a construction timeline and cost estimate. The feasibility study will take 10 months to complete, and it is still too early in the process to say where the money would come from - or even how much it would cost - but Aviation Commissioner Ginger Evans (pictured) did say that private investment in the project is a strong possibility. The city would likely need to finance at least a portion of the construction of the stations, both in the city's center and at the airport. Officials' preliminary discussions, though, have implied that the project, if it goes forward, could come out for bid in the summer of 2017.
Kansas State to build veterinary laboratory on campus
The Kansas Board of Regents last week approved Kansas State University's proposal to construct the Kansas State Veterinary Diagnostic Laboratory. The lab facility is expected to cost $43.2 million. Even with board approval, the Kansas Legislature still must sign off on the project. The new building will allow the university to consolidate its diagnostic and research laboratories with offices and support facilities. Plans call for the construction of an 80,000-square-foot facility. A timeline for when construction would begin has not yet been formalized. University officials have said that they expect to raise $10 million to contribute to construction costs.
Hawaii issues RFP for payroll system upgrades
In his first State of the State address last year, Hawaii Gov. David Ige called for modernizing the state government's systems of technology. Last week, officials with the Department of Accounting and General Services (DAGS) answered that call by releasing a request for proposals (RFP) to identify a vendor that can upgrade the state's payroll and time and attendance systems. "Our state payroll personnel do an amazing job each pay cycle, especially considering that the current system is extremely manual and paper-based," said Comptroller Doug Murdock (pictured). "We appreciate their work and look forward to building on that foundation to add 21st-century payroll capabilities and efficiencies." The current payroll system serves 75,000 full- and part-time employees throughout the state. The contract is expected to be awarded in the summer of 2016.
Western Hills Viaduct project may include freight rail
The last major rehabilitation project of the Western Hills Viaduct in Cincinnati was in 1977, and the aging bridge is in need of replacement. The half-mile long viaduct spans the Mill Creek Valley and a railyard and is traversed by about 55,000 vehicles per day. It is owned by Hamilton County but maintained by the city. Delegations from both governments met last week to discuss the potential $300 million project, which is in the design engineering stage. Though funding has not been secured for the project, the plan is to construct a new bridge south of the current one and for it to have two decks and possibly to include a rail line. Both city and county officials have said the project will require federal and state funding to begin construction. The rail component would likely be for freight cargo, which would allow the project to tap funding for freight rail that was included in the congressional transportation bill passed in 2015.
Savannah-area traffic management under review
Transportation planners in Savannah, Ga., are looking to the state's largest metropolitan area and considering what ideas will work for the smaller coastal city. Both Atlanta and its surrounding suburbs have used forms of intelligent transportation systems for about two decades to help manage traffic, and officials with the Chatham County-Savannah Metropolitan Planning Commission are hoping to implement some of those solutions too. "That's exactly what we're aiming for," said Tom Thomson, executive director of the planning commission. "They didn't get to it overnight either. It's going to take 10 to 15 years of having the vision, and working incrementally over time as money and the need actually warrants it." Planners are in the middle of conducting a needs assessment on a local traffic management system and have finished the first phase of the study, which entailed taking an inventory of current operations. The takeaway for researchers thus far is that the region requires upgrades to its communications infrastructure - connections from traffic signals to the central control center - and hardware out in the field, such as surveillance cameras and message signs.
Normal approves $10M to pay for fire department HQ
The city council in Normal, Ill., has approved a $10 million bond issue. The largest expenditure to come out of that debt package will be $4 million, which will go toward building the future headquarters for the city's fire department. The department's new headquarters facility will begin construction later in 2016 and is expected to cost a total of $8 million. The remainder of the bond will finance other city projects, including a mixed-use development that would include a restaurant, office space and residential apartments. That project is slated to get $2.8 million of the bond funding. Other projects that could see money from the bond issue include the renovation of the city's community activity center, land acquisition for two further fire stations and a feasibility study for a construction project that would build an underpass.
Sacramento approves regional transportation plan
Last week, the Sacramento Area Council of Governments (SACOG) adopted a 20-year transportation plan that relies on residential construction almost as much as it does on building highways. Conceived to provide direction for transportation spending through 2035, the plan predicts a concentration of urban construction that inclines toward density rather than suburban sprawl and focuses on non-automobile-based transportation options even for the region's smaller towns and cities. SACOG is an association of local governments in the six-county Sacramento region consisting of 22 cities. Its transportation plan estimates that there will be more than 800,000 new residents and 285,000 new homes. It also estimates $35 billion will be spent on transportation infrastructure, including high-occupancy vehicle lanes, at least three new bridges and a substantial increase in the region's transit service. SACOG chief executive Mike McKeever said that the region would triple the number of service hours for its buses. "The research is there, the market interest in that is very strong," McKeever said, speaking of the desire for more density and transit services.
Deltona to seek bids for new community center
City leaders in Deltona, Fla., have decided to move forward on the construction of a community center that will provide recreational opportunities for the full range of the city's residents. It will include a senior community center and a gymnasium with basketball courts. The 40,000-square-foot facility will also include assembly space for children's events. It is expected to cost $8.9 million, and the city will need to borrow about $8 million to fund the project. An architect has been working on the community center's design, and the project is expected to go for bid in the summer. Officials hope to open the center by the end of 2017.

News about public-private partnerships (P3s)

P3 bill clears Kentucky House
Long held up due to widespread resistance to toll lanes on interstate highways, public-private partnership (P3) legislation has finally made it through the Kentucky House of Representatives and is on its way to the Senate. Using a P3 to finance the proposed $2.6 billion replacement of the Brent Spence Bridge connecting Northern Kentucky and Ohio via I-71 and I-75 has been discussed for many years, but opponents have insisted toll lanes not be included in the project. This year's legislation explicitly forbids their use, but instead provides a framework for the use of P3s as an alternative financing method for other major public projects at the state and local levels, as well as for certain transportation projects. "We've been working very hard on P3 legislation the last two years and, here we are in 2016, maybe we can be successful this year," said Rep. Leslie Combs (pictured), the bill's sponsor. Previous P3 legislation has been unsuccessful, due primarily to the controversy over tolls on the Brent Spence Bridge.
Wayne State to use P3 to build student housing
Detroit's Wayne State University is seeking developers to participate in a public-private partnership (P3) project that will add more than 650 beds to the university's student housing. The project will demolish one apartment building and construct two new residence halls. The selected contractor will pay to build the project, lease the property from the university and possibly act as property manager, to be reimbursed out of student housing fees. Another part of the project will be the transformation of a campus building that once served as a home for the School of Social Work into additional student housing and the renovation of yet another residence hall. Responses to the request for proposals are due by March 14. University officials hope to choose a winning bid by the fall and open the first new student housing facility by the 2018 fall semester and the second a year later. All portions of the P3 project will need to be completed by 2026.
D.C. may use P3 to redevelop former Army hospital
A bill before the Washington, D.C., City Council would allow the district's government to buy a parcel of land on the former Walter Reed Army National Medical Center campus and redevelop it through a public-private partnership (P3). The deal, if approved by the city council, would have the city pay the Army $22.5 million for the property; a private developer would then pay the city $25 million for a 30-year ground lease. The company plans to build a mixed-use development with more than 2,000 residential units, a town center, a hotel and conference center and office space. The bill under consideration requires that more than 20 percent of the residential units be reserved for low-income residents. The developer would prepare the land for construction and then sell individual parcels to homebuilders and other developers. The District of Columbia would receive, in addition to the lease payments, 1 percent of the parcels' sales price in excess of $35 million.
Austin to issue new call for developers of intake facility
The city of Austin, Texas, in 2013 held a competition to design the redevelopment of a former intake facility on Lady Bird Lake on the edge of the city's downtown area. Unhappy with the results of the competition, city officials are preparing to reissue the call for development proposals, this time with an emphasis on preserving the historic building's key features. "We are committed to delivering a project that respects the architectural integrity of this iconic building while providing for the dynamic and creative reuse of this distinctive public space," said Marty Stump, assistant parks director. The intake facility is one part of the decommissioned Seaholm Power Plant, which is listed on the National Register of Historic Places. The finalists chosen from the design competition called for too many changes to the structure, according to preservationists, and so the city will reopen its calls for design proposals. The selected partner will pay the costs of redevelopment upfront and make its money back from fees charged for managing and renting the event space. Staff of the city's purchasing office said the new project solicitation will be issued by the spring.
Tennessee officials consider P3s for building projects
Lawmakers in Tennessee are considering legislation that will make it easier for state and local leaders to enter into public-private partnerships (P3s) to complete transportation projects. In addition to what's happening in the state's legislature, the state's Department of General Services has issued a request for information (RFI) to help decide the feasibility of forming P3s for other construction projects. The department is considering the idea primarily for large-scale construction projects that would cost the state at least $100 million. The proposal is to identify projects for which private companies would front the construction costs in exchange for management fees over a set period of time, with the state maintaining ownership of the properties. "We're not inventing something new here," said John Hull (pictured), deputy commissioner for the Real Estate Asset Management Division. "We would be following the lead of other states that finance projects like this. Virginia, Texas and Florida are three state that have all done this. Some of these projects of that size are few and far between for the state, but we think we have the obligation to do the research to see why other states have done this." Responses to the RFI are due March 4.

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