The Urban Land Institute (ULI) recently published an updated guide to Public-Private Partnerships (P3s) that introduces their varied forms, their utility to both the public and private sectors, and examples of successful P3s from around the county. The report offers insights to local government staff and elected officials as well as private development professionals looking to better understand how P3s may be used to address priorities of both parties.
The report comes as an update the ULI’s 2005 Ten Principles for Successful Public/Private Partnerships, following the changing financial, regulatory, and market conditions of the Financial Crisis and Great Recession. The report finds that the new landscape has facilitated the need for P3s to:
- Facilitate the development of real estate asset to achieve greater benefits for both the public and private sectors,
- Develop and ensure the maintenance of critical infrastructure, and
- Design, build, operate and maintain public facilities.
Moreover, the report addresses continued concerns of both public and private sector actors illuminated through a survey of ULI members. The survey found that the among the greatest challenges to effective P3s were public sector understanding of private capital criteria and return requirements (61% of respondents) and validating the “fairness” of the deal to the public sector (51%). Similarly, the survey found that expertise needed by the public sector include real estate finance (59%), and standards balancing fair return for private sector and protecting public sector assets (56%). Experiences in Wilmington and other North Carolina towns and cities show that effective mediation and capacity building can alleviate these concerns and build successful public-private partnerships.
For local government staff, planners, economic developers, and elected officials in North Carolina this report is a guide on how to envision P3s, communicate effectively with private development partners, and think creatively about structures and funding to responsibly benefit both parties. Readers are encouraged to use the report as an overview to the players and structure of successful P3s, an introduction to some of the financing tools available to municipalities across the country, and become informed on emerging trends in P3s, including partnerships that include neighbors, the philanthropic sector, and nonprofits and twinning high development standards with a streamlined procedure in the entitlement process.
While ULI’s report is an excellent introduction or refresher to P3s and gives insight into the needs of the public sector to successfully engage in a partnership, its applicability in North Carolina is limited in light of the constitutional and statutory powers awarded to the state’s municipal governments. CED has explored the legal landscape of P3s in North Carolina before, including:
- Grants to real estate developers
- Incentives available for pursuit of economic development, and
- The process for bidding and entering a contracted P3.
These discussions are critical to understanding the ability to effectively share a vision with the private sector, and when used in conjunction with this report may guide leaders on both the public and private sectors to better understand the needs of the other party and how to grow their own capacity to realize a shared vision of revitalized public assets.
Peter Gorman is a Master’s candidate in the UNC-Chapel Hill Department of City and Regional Planning specializing in Economic Development and a Community Revitalization Fellow with the Development Finance Initiative.