Volume 8, Issue 14 - June 29, 2016
Good to know alternative funding sources can be found
Mary Scott Nabers, President/CEO, Strategic Partnerships, Inc.
Recent events such as the Flint, Mich., water crisis and extreme flooding in Houston, Texas, have highlighted the dismal state of the nation's crumbling water infrastructure. 

Communities everywhere are being forced to face the harsh reality that water must be conserved and antiquated pipelines must be addressed.  All this is happening at a time when public funding is simply not adequate to fix the problems. 

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Mixed-use P3 projects including public facilities
North Carolina fire station in office building example of this growing trend
East West Partners/Gensler
Nestled in the middle of a planned $20 million mixed-use development in North Carolina that features a four-story office building with a two-story parking deck will sit a $3 million fire station. That's right, a fire station! (See artist's rendering at left.) Aptly named
The Station at East 54, this particular fire station in Chapel Hill is an example of a growing number of public-private partnerships (P3s/PPPs) in which cities are reaching out to developers for collaborative efforts to incorporate public facilities into their private developments.

The private developer in this deal, East West Partners, has previously built the mixed-use East 54 hotel, office, retail and apartment community adjacent to the fire station property. East 54 is a development that features a new urban village of luxury condos, shops, dining and office suites.  

Under the terms of the proposed P3, the developer will pay $1.75 million of the fire station cost. The town of Chapel Hill will put up $750,000 toward the project and the county - which will be locating some emergency services at the new facility - will throw in another $500,000.

Initially, the town planned to sell the land on South Hamilton Road where the current Chapel Hill Fire Station 2 is located and then lease back space for the fire station. However, the plan was changed and the town decided to maintain ownership of the property and the developer would help build the new station in its place. In exchange, the developer will be allowed to lease out the nearly 55,000 square feet of office space in the complex. An added advantage for the town is that the new development will increase the town's tax base by $40,000.

This is not the first such P3 agreement that Chapel Hill has been working on. Town officials are also seeking developers for other town-owned properties. One such project under consideration is the redevelopment of a town-owned parking lot into a six-story, mixed-use building with a music venue and parking deck.

Elsewhere around the country, the city of New York leased 1.5 acres of city property to a private developer in exchange for the developer including space for two public schools in a 12-story private development that also houses a grocery store. This $700 million mixed-use P3 project will result in the two school floors being built at no cost to the city. The city will retain ownership of the property. The developer will be granted a 75-year lease and will make annual payments in lieu of taxes.

Public libraries are finding a home in privately built mixed-used facilities as a result of public-private partnerships. In Wisconsin, a mixed-use facility is under consideration that would involve a new Appleton Public Library and another development like a community center, housing and retail and/or commercial space.

In Sandy Springs, Georgia, a public-private partnership between the city and a private developer building a mixed-use facility will include a new city hall and performing arts center along with retail and residential space.

Public-private partnerships in the past have been thought of more for transportation and public infrastructure projects like water and wastewater plants. However, local governments are redefining the uses for P3s with innovative proposals that can help them add or replace public facilities at little cost to the government entity or taxpayers. Expect this trend to continue.

Upcoming contracting opportunities

Iowa school district to bid out improvement projects
The Wapello school district in Iowa plans to seek bids beginning July 11 for four projects over two phases. The total price tag for all of the projects is more than $2.94 million. Phase One includes building a new $1.759 million high school gym and developing a new high school campus parking area. Officials are hopeful to begin those projects as soon as possible. They would like for the gym to be completed by early August of next year and the parking area in November of this year. Other projects to be bid for Phase Two include security upgrades and office upgrades at the elementary and secondary buildings and renovation of the high school Family and Consumer Science room. These projects are expected to begin in June of next year and be completed two months later. 
Maine DOT studying bridge replacement in Yarmouth
A public hearing was held recently by the Maine Department of Transportation seeking input on its plans for a proposed bridge project across Main Street in Yarmouth. In addition to replacing the existing bridge, the $4.9 million project will also include the addition of sidewalks on the bridge, ramps connecting the roadway to Yarmouth village, new lighting, landscaping and seating under the bridge structure. The town will fund about $257,000 of the pedestrian improvements. Following discussion of whether to upgrade or replace the bridge with an at-ground intersection, an advisory committee recommended building a three-span, flat-arch bridge to replace the current bridge. Plans are to award a contract for the project early next year and to begin construction in July 2017. Traffic will continue to use the existing bridge during construction.
Ohio county to seek bids for bridge replacement
Officials in Jefferson County, Ohio, will advertise for bids for a bridge replacement on Goulds Road in Steubenville. The $1.6 million project will take about a year to complete, according to county officials, and the existing bridge will remain in operation until the new one is completed. Eighty percent of the project will be paid for by the Ohio Department of Transportation. The owner of the former Satralloy plant was ordered by the Ohio Environmental Protection Agency to clean up the site of its facility that was used for the smelting of chromium ore, leaving a known carcinogen as a by-product. Because the company will use trucks that will traverse the bridge to haul out the materials it cleans up, the former owner will pay for part of the bridge project. The successor company that will now use the property has donated $250,000 for the design of the bridge and construction of a rail spur. County officials are hopeful the addition of the rail spur and replacement of this bridge and another one to be replaced at a later date will have a positive effect on economic development in the area.
Downtown upgrades part of Salem bond proposal
Wikevin_boggessth about half a million dollars to be dedicated for downtown renovations, officials in Salem, Va., are considering an $11.5 million bond issue. In addition to the downtown area upgrades, the bond proceeds would also be used to improve the Salem Memorial Ballpark, the city library and the courthouse. The bonds would also be used to pay for an automated meter reading system. City Manager Kevin Boggess (pictured) said that about $5.2 million of the bond issue comes from general fund projects that the city will cover with general tax revenue. Ballpark renovations include replacing the stadium's outfield wall and repairing the elevator. A new scoreboard is also in the works. Officials said most of the costs of the upgrades at the stadium will eventually be paid back by the team. New fire department equipment that includes a new fire engine and a ladder truck would also be paid for by the bonds, as would replacement of the roof at the downtown library and at the front entrance of the city courthouse. Other courthouse projects will include front entrance security upgrades. The money set aside for downtown renovations will be matched by grant funds from the Virginia Department of Transportation. 
Public hospital to use bond funds to build new ER
The publicly owned Newman Regional Health, a 25-bed acute care critical access hospital serving the people of Lyon County, Kan., and surrounding communities of Emporia, is about to build a new 17-bed, 15,000-square-foot addition. The new emergency room would almost triple the current space of 5,200 square feet. The hospital's Board of Trustees recently approved bond funding for the project. The $20 million in revenue bonds will fund the project as well as retire debt from bonds issued a half dozen years ago. Once approved by the county's Public Building Commission, the hospital will seek a construction manager for the project, which officials hope will be completed and ready for use by the end of 2018. In addition to adding a new emergency room, other changes will be made, including moving the physical therapy department and the outpatient observation unit. These changes would help facilitate future plans to replace the current inpatient tower if needed. Plans call for refinancing about $7.4 million in remaining debt and using $11.9 million in bonding and current revenues to build the new facility. 
Ohio State project to connect school to neighborhoods
A $30 million project to remake the east side of High Street between 14th and 17th avenues to connect The Ohio State University campus to surrounding neighborhoods could begin by early next year. The project includes infrastructure work to realign and/or widen streets, bury utility lines and build a storm sewer and a new public plaza while reconnecting 14th and 16th avenues to High Street. A new 500-room hotel will be built behind the plaza, according to officials of the university's development team. This initiative will tie in with the university's plans for developing the west side of High Street. The area that includes Mershon Auditorium and Sullivant Hall will be revamped as an arts district, facilitating music, art and theater programs. 
High-speed broadband coming to Kentucky county
mike_buchanon Statewide efforts are currently under way to create an open-access broadband network capable of providing high-speed Internet access to every county in the state of Kentucky. Officials in Warren County are trying to get a step ahead by bringing their own high-speed broadband to the entire county and later connecting to the state network. County administrators are seeking a request for information (RFI) for fiber installation in the county. "We are asking people who are participating in one way or the other to submit their proposals - information on their companies and what they would like to do in order to get us universal high-speed broadband throughout Warren County," said Warren County Judge-Executive Mike Buchanon (pictured). Buchanon said bringing high-speed broadband to areas outside Bowling Green could be about $27 million. The county executive said responses to the RFI are expected within three weeks and the county will then have a good idea of what interested companies can provide. Details of the plans can then be fleshed out. 
Virginia plan addresses state infrastructure needs
More than 3,200 highway, bridge, rail, transit and bicycle/pedestrian path projects will be funded by the recently approved Virginia Department of Transportation (VDOT) six-year improvement plan. The plan calls for spending $14.4 billion on these projects for the six-year period beginning July 1. Officials note that $10.7 billion of the funding will be used for highway construction, with the $3.7 billion balance to fund rail and public transportation projects. Also approved was VDOT's $5.35 billion budget for Fiscal Year 2017. Maintenance projects on the state's highways will garner the largest part of the total, at about 40 percent. Another 35 percent will be for highway construction. Payment to city and county street needs will total $2.13 billion. Construction will garner $1.87 billion.

News about public-private partnerships (P3s)

California city considers P3 for parking garage
Efforts to breathe new life into the city of Menlo Park, Calif., could include a new parking garage. City officials are exploring options geared toward a revitalization of the city's downtown area. City council members recently heard a presentation to explore its options and a parking garage was high on their list of considerations. A recently authorized city survey showed that two-thirds of the respondents were in favor of an above-ground parking garage.  The council heard from two commercial real estate consultants, who said a two-level garage would cost about $4.6 million and a four-level facility would cost about $9.3 million. Officials are hoping to draw on the success of nearby Danville, which built a parking garage downtown that resulted in increased traffic to the area to support downtown businesses as well as provided parking for employees of those businesses. City officials have instructed the real estate consultants to meet with developers to discuss the possibility of a public-private partnership (P3/PPP) as an alternative to using taxpayer dollars for funding a parking garage. 
Maryland Purple Line gets $874.6M TIFIA loan
purple_lineThe consortium of private-sector companies that recently won a $5.6 billion contract to build and operate the Maryland Purple Line light-rail project has been awarded an $874.6 million Transportation Infrastructure Finance and Innovation Act (TIFIA) loan. The funds will be used to help defray the costs of the 16.2 mile project that will connect Montgomery and Prince George's counties in Maryland. The east-west line will also include 21 stations. In making the announcement of the loan, U.S. Transportation Secretary Anthony Foxx said the new rail line will offer an alternative form of transportation that will allow residents along the line "improved access to jobs, education and medical care and, overall, will help improve the quality of life." Federal Transit Administration (FTA) officials also are working with the Maryland Transit Authority to secure an additional $900 million toward the project through the FTA Capital Investment Grant Program. Another $36 million in FTA grant funds will also be appropriated for the project. Calling the Purple Line a "unique public-private partnership" that allows the state to leverage additional federal funding, FTA Acting Administrator Carolyn Flowers added, "The Purple Line will help residents access one of the state's largest job centers as well as its flagship state university without having to drive on heavily congested roads."
P3 campus projects upcoming for Purdue University
Three major projects on the "wish list" for Purdue University could become realities now that the university has hired a master planner to supervise a public-private partnership for a planned $1.2 billion community-within-a-community - the Purdue Innovation District - on west campus. The development process could take up to two decades. It will include a mix of residential housing, commercial, entertainment and industrial developments. The master planner will first come up with a proposal for what kind of housing, retail and university and commercial uses will be incorporated. The firm then will be tasked with recruiting developers to build on land owned and leased by Purdue Research Foundation. The master plan could be completed by late this year or early 2017. Among the projects university officials have at the top of their list of possible early start times once the plan is approved are a privately developed 800-bed housing project for graduate students and upperclassmen, a hotel and convention center and an innovation hub that would bring the university's innovation-to-commercialization program to the same facility and provide space available for lease by venture capital firms. 
Philly opens health care, literacy, recreation facility
jim_kenney A public-private partnership (P3/PPP) has led to the opening of a combined health care, literacy and recreation facility in South Philadelphia. The new South Philadelphia Community Health and Literacy Center not only includes a Children's Hospital of Philadelphia (CHOP) pediatric care unit, but also a community health center, a community library and a playground and recreation center. The $42.5 million facility is hailed as the first-of-its-kind P3. "Residents can come to this state-of-the-art building for one-stop shopping for health care, education and recreation," said Mayor Jim Kenney (pictured). The project grew out of the need of all of its eventual partners. The hospital's neighborhood clinic needed more space for expansion. Nearby, the city owned a primary care health clinic, a small recreation center, playground and library. All of the facilities were in need of renovations and equipment upgrades. CHOP officials offered as a solution a comprehensive medical clinic to be built on the city's land that would house current and future hospital medical practices. It would also build a recreation center and playground twice the size of the current facilities and what was described as the city's first "21st century" library. The project was financed by $30 million in operating revenue from CHOP, $1.3 million from the Free Library of Philadelphia, $9.8 million in equity by New Market Tax Credits and the city's $2.2 million contribution toward construction..
Fremont's first P3 brings mixed-use project downtown
The first-ever public-private partnership (P3/PPP) for the city of Fremont, Calif., will result in a mixed-use development that city officials are hopeful will lay the foundation for revitalization of the downtown area. In addition to being the city's first P3, it is also the downtown area's first mixed-use development. It will be constructed on six acres of land currently owned by the city. However, as part of the P3, the title will be conveyed to the developer. The $110 million development is expected to include 157 market-rate condominiums and about 21,000 square feet of retail and restaurant space. The development will include two five-story buildings that will have retail shops and restaurants on the ground floor and about 80 condos on the upper floors. Additionally, there will be 11 three-story buildings behind them with 76 condos inside. The city hopes in the future to build a community center, city administrative offices and a public plaza adjacent to the multi-use development. The community center and plaza will carry a $30 million price tag and are expected to be under construction late next summer. Additionally, the city is planning a new $161 million city hall in 2020.

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