Volume 9, Issue 14 - April 5, 2017
Mary Scott Nabers, President/CEO, Strategic Partnerships, Inc.
Cyber stalkers present serious threats to businesses, governmental entities and organizations of all types. The ever-present danger is said to be increasing at an alarming pace, and because the aftermath of any cyberattack is so devastating and costly, technology changes are occurring at a dizzying pace. In spite of that, most citizens do not believe that current cyber security efforts are adequate.

According to a recent study, 50 percent of state and local governments experienced six to 25 breaches in the prior 24 months, and 12 percent experienced more than 25 breaches. The federal government will spend approximately $17 billion to enhance cyber security in 2017 but state and local governments are being forced to address the same threats with much less when it comes to funding and resources. In a recent survey, 80 percent of state chief information officers (CIOs) indicated that the lack of funding for cyber security is their top challenge. 

In spite of restrained resources, public officials at the state levels of government are currently involved in, or discussing and planning, cyber security enhancement projects. The National Governors Association (NGA) is trying to help and has issued recommendations for a number of basic actions that should be initiated.

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Human trafficking generates billions of dollars in profits per year, second only to drug trafficking as the profitable form of transnational crime. The exploitation of women, men and children for forced labor and sexual acts has permeated the global community. The internet creates both new opportunities for traffickers to exploit vulnerable people around the world, and a platform to identify traffickers in this unlawful industry.  

According to the 2016 Trafficking in Persons Report, in the United States, the Department of Homeland Security reported opening 1,304 investigations possibly involving human trafficking in fiscal year (FY) 2015 (October through September), an increase from 987 in FY 2014. During FY 2015, the Department of Justice secured convictions against 297 traffickers, compared with 184 convictions obtained in FY 2014. Of these, 291 involved predominantly sex trafficking and six involved predominantly labor trafficking, although several involved both.  

Sex trafficking and human slavery are certainly nothing new, but the internet has created a dark space for predators to buy and sell people. Today, more than 150,000 escort ads are posted in the U.S. every day, many of them for children. The human trafficking industry enslaves an estimated 27 million people worldwide.

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California- Winter's wrath took a toll on California roads, bridges and highways. The California Department of Transportation (Caltrans)estimated that it will cost $860 million to fix the damages to infrastructure. Damages in Los Angeles County alone will cost more than $55 million due to emergency and permanent repair costs. Almost half that cost will be allocated for one project on Highway 27, also known as Topanga Canyon Boulevard, which was blocked by a boulder in January after a rainstorm. Winter storms also caused a 3.5-mile closure of the pass through the Santa Monica Mountains between the Pacific Coast Highway and Grand View Drive due to the large amounts of rock and debris scattered across the road. Emergency repairs to the road are estimated to cost about $2 million and permanent restoration, which includes geotechnical assessments, moving utility lines and stabilizing the slope, may cost up to $21 million. 

In Monterey County, the Pfeiffer Canyon Bridge in Big Sur was destabilized due to a mudslide and will cost at least $26.5 million to replace it. Caltrans officials are currently aiming for an October reopening of the bridge. In Santa Clara County, a 200 foot section of Highway 35 slid more than 50 feet due to the storms. The permanent rebuild and stabilization of the section is expected to cost more than $29.5 million. The most damage was done in Northern California where repeated storms and flooding overwhelmed residents in Sacramento, Yolo, Yuba and Butte counties. The two main highways through Sierra Nevada, Interstate 80 and U.S. 50, were closed due to heavy snow. Repairs in this region are expected to cost more than $360 million. 

The $860 million figure does not include the costs to repair the damages in Oroville Reservoir in Butte County. Permanent repairs to the facility's flood control spillways and hydroelectric plant are expected to cost more than $200 million. The Federal Emergency Management Agency has stated that counties affected by the weather in January and February can expect to receive federal emergency aid, although the exact figures have not been determined.
Washington D.C.- The Dwight D. Eisenhower Memorial Commission has its sights set on a fall groundbreaking for the $150 million tribute to the former president, despite a $84 million deficit of final funding and design approval. The commission must secure this sum in federal funds as well as get approval for the design from the National Capital Planning Commission (NCPC) and the U.S. Commission of Fine Arts. Construction costs for the project, excluding the bronze statue components of the design, were expected to be between $80 million and $90 million earlier this year. At that time, the NCPC gave its approval on some of the key design elements. 

The project is still tight for funds as Congress did not include memorial funding in last year's appropriation bill. The Dwight D. Eisenhower Memorial Commission - whose advisory board includes former presidents Bill Clinton, George H.W. Bush, George W. Bush and Jimmy Carter will continue to raise $25 million in private funds. The money is available to explore design phase services. The GSA said in the market research request that the construction will cost $80 million to $90 million, not including the bronze sculptures, which will be paid for from separate funding. Commission officials are trying to expedite construction so that they can dedicate the memorial on June 6, 2019, which will be the 75th anniversary of the Normandy landings of D-Day, the World War II military plan led by Eisenhower.
North Carolina- High Point City Council announced that it has approved spending $15 million to purchase land downtown to build a multi-purpose stadium for a professional baseball team and to attract retail, restaurant and residential development in the surrounding areas. There will be $30 million dedicated to the project, with the first $15 million being used for land purchase as well as preliminary design and environment studies.

The city has confirmed commitment from the independent Atlantic League for a franchise once the construction of the ballpark is completed to league standards and once a long term lease and steady financial ownership is established. The stadium is expected to seat about 5,000 for baseball and about 7,500 for concerts and other events. Construction of the stadium could start as early as this fall, meaning that the stadium may be ready for the beginning of the 2019 season.

The city council has expressed a desire for a design-build arrangement, citing time efficiency as the main reason. The project debt would be covered by the baseball team's annual lease, facility fees, parking surcharges, naming rights and increased property tax revenues from the development around the stadium. 
United States- The Air Force will allow pilots to interrupt military service to fly with commercial airlines. The government will begin collaborating with the airlines in May to see if they can obtain a public-private partnership. The Air Force is currently short 1,500 pilots because airlines are recruiting them from the military.

Allowing Air Force pilots permission to fly commercial will keep the ranks from coming up short and provide a steady supply of military-trained aviators for the airlines. The Air Force is also considering increasing retention bonuses to keep military pilots signed-up longer. It's looking at increasing the $25,000 cap on annual bonuses to a maximum of $35,000 for those who stay in for 13 years. That totals $455,000 in bonus pay over the 13 years.
California- San Mateo County officials have kicked off one of the county's most aggressive spending plans with up to $700 million being allocated for upgrading and building new facilities. The five-year Capital Improvement Plan includes modern, energy-efficient upgrades to a diverse list of buildings supporting law enforcement, health care, courts, county administration and emergency services. This plan involves moving staff and services, constructing new parking and relocating a historic property - mainly in downtown Redwood City. 

The San Mateo county board agreed to proceed with a $32 million repurposing of the old jail at 300 Bradford Street, which has remained mostly vacant since all the inmates were transferred last year to the new Maple Street Corrections Center near the Bayfront. This reconstruction will allow the sheriff's office administration to move from the county's courthouse at 400 County Center to a rehabilitated facility across the street. 

One of the most expensive upgrades is a $100 million project at the Health System Campus in San Mateo. Two buildings will be demolished as part of state-mandated seismic retrofits. This project would reduce the square footage of the campus and increase parking and greenery. It would also relocate administrative employees to downtown Redwood City where supervisors approved the construction of the new county office.  

This 18-month project will be located on top of the current surface jury parking lot, and is expected to cost between $36.5 million and $50 million, with the project scheduled to begin in the next two years. Additionally, this project will entail a $224 million investment spread between bonds, proceeds from the county's sale of its Circle Star Property, general fund reserves and Measure K sales tax revenue.
United States- A steering committee for the clean-sheet Future Surface Combatant, along with three-star counterparts from the Office of the Chief of Naval Operations and the operational fleet are collaborating to construct the Navy's future water vessel. The idea is to have warfighters, shipbuilders and finance personnel working together from the start, instead of one group coming up with unrealistic requirements for a super-ship the others can't build or can't afford. The Navy is looking for the next generation future surface combatant and plans to solicit design proposals from the industry around 2020. 

Before the request for proposals is put out, the military will perform studies to come up with the best design approach for the project. Navy personnel have discussed wanting a ship built from the keel up for cyber and electronic warfare. A ship of the future will need a lot of electricity to handle laser weapons and electromagnetic railguns. This modern-day vessel will be a floating framework that can keep evolving for decades to exploit new technologies and meet new threats.
Maryland- The city of Baltimore has issued a request for proposals (RFP) seeking a developer to overhaul the Avenue Market on Pennsylvania Avenue. The city also issued a RFP seeking firms to oversee the demolishment and rebuilding of the 244-year-old Lexington Market. Developer teams or consultants will provide fee based services for the removal of the 71,000-square-foot Arcade building and the construction of a new 97,000-square-foot market on the existing surface parking lot at Eutaw and Paca streets. 

Expected work includes construction oversight, financing arrangement, vendor recruitment and leasing and tenant coordination. The project is estimated to cost $40 million. The deadline to respond to the Lexington RFP is May 16. The Avenue Market RFP seeks proposals for the lease and redevelopment of the city-owned property. The developer would agree to a 30-year master lease for the 34,000-square-foot property for no less than $95,000 in year one. Rent escalation and profit sharing would also be part of the lease agreement. The responses to this RFP are due May 30.
Colorado- The city of Boulder recently announced that it has released a request for proposals (RFP) for the redevelopment of the former Pollard Friendly Motor Company site in Boulder Junction. The city acquired the 4.3-acre property at 2360 30th Street in 2004 for $9.5 million, and now intends to build apartments and town homes at the location. 

Close to a third of the units will target the low to moderate-income demographic, indicating that those households make between 30 and 80 percent of the area median income. Another third of the units will target middle-income earners, people who earn 80 to 150 percent of the median. Lastly, the final third of the site would be considered "market-rate." Developers have until May 31 to submit proposals.
News about public-private partnerships (P3s)

Florida- Florida International University (FIU) is soliciting bids to rehabilitate the Wolfsonian-FIU annex and parking lot in South Beach in a public-private partnership. FIU recently issued "an invitation to negotiate" for a sublease of the 28,000-square foot Wolfsonian annex constructed at 1538 Lenox Avenue and the parking lot with 34 spaces at 1500 Lenox Avenue. The lease would run for up to 40 years, with options for two additional renewed five-year terms. The price is to be provided by the bidders. The site is a commercial zone, which includes office, retail, restaurant, apartments or use as a bed-and-breakfast. The building would be subject to historic preservation requirements. 

The properties are owned by the State of Florida Board of Trustees of the Internal Improvement Trust Fund and leased to FIU. Property records show that in 1987, art collector Mitchell Wolfson, Jr. paid $687,800 for the building and lot. The state trust fund acquired the facilities in March 2004 as a donation for benefit of the Wolfsonian-FIU. The four-story Mediterranean-Revival building was built to house the Southern Bell Telephone Company. Nearby, Menin Hospitality has plans to redevelop the historic Firestone service station on the 1500 block of Alton Road into Al's diner, as part of a mixed-use retail/restaurant redevelopment with outdoor café seating. Bids for this project are due by June 2, and the evaluation committee will hold meetings through July 12, with an expected completion of contract negotiations on July 28.
California/Nevada- Revenue projections are $1 billion for a high-speed rail line that would connect Southern California to Las Vegas, according to a ridership and revenue study released March 2. The proposed rail's construction and annual operating costs have not been determined and there is an interest in the private-sector for funding. The route from Victorville to Las Vegas is slated to be operational by 2022 with further plans to extend to Palmdale within a year later. There are plans to roll out stations in Burbank in 2026 and Los Angeles and Anaheim in 2029.

This multi-modal corridor is backed by the Los Angeles County Metropolitan Transportation Authority (Metro) and Caltrans. Metro officials have stated that funding for the corridor must come from a variety of sources, with L.A. County's voter-approved half-cent sales tax as a partial option. The idea to use a public-private partnership (P3) has become essential when speaking about the corridor and particularly the rail component. Officials say that P3 partnerships reduce the risks to the public sector and can accelerate project completion without privatizing public resources. Officials from California and Nevada alike have underscored that private funding for the regional connection is the attractive option.
Kentucky- Lexington Mayor Jim Gray has released new drawings of Town Branch Commons, a park that will run its course through downtown Lexington and be funded through a public-private partnership. There will be two parks in the plan, with one located in the Cox Street parking lot and the second park along Vine Street. 

The 3.2-mile park trail will roughly follow the path of Town Branch, the city's original water source, through downtown. The trail will also link the city's downtown parks into a single cohesive system. The trail will facilitate walking, jogging and cycling, and it will also create 22 miles of uninterrupted trail. Along the path will be water features where children can play.
West Virginia- A reworked bill that would extend support for public-private highway projects was recently approved by the West Virginia Senate Transportation and Infrastructure Committee. Currently, there are five ongoing public-private partnership projects and this recently passed bill (SB 15) will extend a "sunset" provision that would be extended to June 30, 2020. As part of the extension, use of federal highway funds would be capped at 35 percent of a particular project. 

Mike Clowser, Executive Director of the Contractors Association of West Virginia, testified that the state's current and future public-private infrastructure projects would benefit from a new federal stimulus. This support for the bill comes as a result of the federal funds cap compromise, which will allow the state to explore a more diverse array of potential infrastructure projects. A subcommittee recommended the bill pass in the full committee before being eventually sent to the Senate Finance Committee. This is the second extension of the sunset provision since the original legislation was implemented in 2008.
Maryland- The proposed Westside Regional Park is slated to receive a large piece of vacant, city-owned property along Butterfly Lane known as Hargett Farm. City leaders in 2009 paid $18 million for this land, which has since accrued roughly $1.5 million in annual debt service with little to no progress toward development. The mayor has included $2 million toward infrastructure, design and construction funds in his fiscal 2018 budget and the community has committed efforts to raise even more through fundraising. 

A meeting will be conducted by the Westside Regional Park Task Force, composed of 14 people representing education, regional recreation, economic developments and neighborhoods on April 19. Members of this task force have the goal of guiding development of the park as funding becomes available and soliciting private donors to help pay the cost. The project is slated to be funded through a public-private partnership.
Delaware- Kent County legislators have introduced a series of bills that would establish Delaware's first public-private partnership (P3) for transportation initiatives that would eliminate the use of taxpayer dollars. These five bills, sponsored by Rep. Bill Carson, would allow Dover and Kent County to take out bonds for transportation projects and then use specific economic development tools such as tolls, tax increment financing and special development district designations to pay the debt over time. These bills were introduced to expedite a proposed traffic alleviation and expansion plan around the Dover Mall. 

That $31 million project calls for a new exit along Del. 1 near the back of the mall and the construction of roads that run parallel to the highway. Developers and local officials have hailed this as an opportunity to draw consumers to the Dover area and add high-end stores to the mall. Under a P3, developers can put together a thorough funding and construction plan and then turn over upkeep of these projects to the state. The ability to use tax increment financing and special development districts allows municipalities to redirect future tax revenue and levy taxes on redeveloped property to pay for the bonds. As of right now, the Delaware Department of Transportation can't begin the design process until 2021. Thus, the timing of this project has prompted developers to look for alternative routes to move it forward. Under a P3 and proposed legislation, construction would begin by 2019 and would be financed through potentially three sources: a 50-cent toll, tax increment financing and special development districts.
Reagan Taylor
Kentucky- Madison County Judge Reagan Taylor has had a longstanding dream for an innovative, comprehensive attack on the substance abuse epidemic. With the help of a public-private partnership (P3) the program would allow people in the early stages of substance abuse to be provided with initial detox and then long-term addiction recovery. After this treatment, participants would receive vocational training and then be given internships working for county agencies such as the animal shelter, solid waste and road departments. 

These recovering addicts would also be given training in "life skills" and opportunities for transitional housing. The program would then stay in touch with and provide help to participants long after they have been on their own. This type of comprehensive plan to tackle substance abuse is nonexistent anywhere else in the country. The county's detention center often holds nearly twice the intended number of inmates, with others housed in other counties' facilities. Local taxpayers already contribute $3.1 million more than statutorily required each year to fund the jail and sheriff's department. Thus, the program he envisions can be cost effective, he added. While no firm cost estimate can be made until proposals have been received, officials remain hopeful that Taylor's plan will be a cost-effective solution to this growing problem.  

The RFP for this creation of a "healing center" was recently posted on the county's website. Proposals will be due July 7, but any entity wanting to participate must attend an April 24 meeting. A screening committee will review proposals on July 24 and potential partners will be announced Aug. 2.
Calendar of Events 

June 18-20
The 2017 SelectUSA Investment Summit will be held June 18-20 at the Gaylord Hotel - National Harbor in Washington, D.C. The summit's theme "Grow with US" will highlight the
innovative business climate in the United States and feature investment opportunities from every corner of the country. Keynote speakers and panelists will lay out a clear roadmap of how businesses of any size, and any industry, can benefit and contribute to the U.S. economy. Register for the event here.
June 25-28
The Smart Cities Connect Conference and Expo will take place June 25-28 at the Austin Convention Center. This Internet of Things technology trade show will include hands-on workshops and smart technology demonstrations. Areas of focus include connected buildings, urban mobility, advanced networks, governance, infrastructure, energy, resiliency, technology and data and citizen life. Register for the event here.
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