Lifting all Boats

15 June 2017 The two-day P3 Hub West conference highlighted how a pipeline is emerging thanks to public sector agencies taking practical measures to deliver projects, reports David Keniry

The rewards for public and private partners who can find solutions to legislative and political roadblocks were demonstrated first hand to a delegation from the P3 Hub West conference in May, who visited the site of Long Beach’s civic center complex, as well as the operational Governor George Deukmejian Courthouse.

Judge James Otto, a champion of the courthouse P3, gave his perspective on how the first social P3 in the US was delivered successfully and how he believes it could be replicated for state courthouses across California, if it were not for state politics. Nonetheless, he revealed municipalities across the state are actively looking at P3 to deliver their justice facilities.

The trip to Long Beach was followed by a transportation-focused roundtable session in Santa Monica, hosted by HDR’s Michael Schneider. Public officials from states across the region provided details on new extensive pipelines being prepared.

A common theme to emerge was how transportation agencies are looking beyond hard assets, like highways and rail, to see how P3 can deliver other types of facilities. The Arizona Department of Transportation, for example, is to procure lighting P3s this summer, while a pump station P3 is one of a number of deals being eyed for the fall.

Meanwhile, Colorado’s High-Performance Transportation Enterprise is looking at how P3 can provide affordable housing to department workers.

The Los Angeles County Metropolitan Transportation Authority (Metro) is also looking at other assets, particularly around stations, with a “very robust” transit-oriented development concept program.

And in Washington State, a pipeline of projects is being prepared concurrently while public officials negotiate the removal of roadblocks in the legislature. The state’s DOT is planning to use P3 for a variety of assets including parking, ferry systems and terminals, in addition to highway projects.

The following day, Martin Klepper, executive director of the US Department of Transportation’s Build America Bureau, gave a keynote address that acknowledged the Trump administration’s interest in P3, but demonstrated how existing tools are available to deliver projects.

Klepper said there are still a large amount of private activity bonds (PABs) available for P3s, while 16 TIFIA loans valued at over $5bn are expected to close in the next 12-18 months. The bureau is also interested in suggestions from the private sector to further develop the P3 industry as part of its outreach program. Since the event, of course, Trump’s Budget has underscored the focus on P3s and reasserted the potential for PABs, TIFIA and other financing tools to support the model.

At a more local level, Scott Brickner, vice president for finance and asset management at the San Diego County Regional Airport Authority, confirmed P3 is being considered to replace a terminal at San Diego International Airport by 2022.

The authority had considered a design-build-finance model for a new Federal Inspection Services facility, but ultimately chose a design-build model. However, Brickner added this procurement process has informed staff of the benefits of P3 with an understanding that it is not ‘free money’.

Meanwhile, the City of Los Angeles and the City of Denver revealed discussions to form internal P3 units are underway to develop the capacity to successfully deliver their extensive P3 plans.

Korin Crawford, executive advisor at the City of Los Angeles’ Office of the City Administrative Officer (CAO), said discussions are underway in the city to carve out a set department or multiagency office to facilitate the delivery of capital projects through P3. The unit could either be under the CAO or an independent agency with its own staff, but it is unlikely to have authority to procure projects. It would analyze and spearhead the pipeline of projects, and put them forward to the existing governance structure.

Crawford confirmed the Convention Center, Civic Center and Downtown Streetcar P3 projects are progressing, while studies are underway to deliver projects across sectors with P3, including water and broadband.

Diane Barrett, chief projects officer for the City and County of Denver, told delegates that her city is also in the process of establishing a P3 office. The unit will be under the aegis of the Mayor’s Office, the City Attorney’s Office and the Department of Finance. It will screen department’s projects for P3, and put them forward to the existing governance structure. Arup is advising on the process.

City staff are hoping the office will be operational in late summer or fall, pending council approval, with recruitment for a team to get underway. Barrett confirmed that Denver is looking at P3 in a variety of sectors, including streetlighting, sidewalks and the National Western Center campus.

Phillip Washington, the chief executive officer of LA Metro, concluded the conference with a frank discussion on the need for infrastructure investment and how to get projects built.

In the interview with Plenary Group’s Dale Bonner, Washington said: “Infrastructure will lift all boats. Unfortunately we have been on an infrastructure vacation in this country for the last three decades.”

He urged federal and state legislators to recognize transportation as a permanent need. Metro has advocated for transportation P3 authorization in California to be extended permanently. Washington noted how funding has been secured indefinitely in Los Angeles thanks to the passage of Measure M with no sunset.

“We have the opportunity in California to lead the way in North America in transportation infrastructure investment,” he added. For Metro, Measure M led to an unsolicited proposal process to ‘jumpstart’ projects, with dozens of submissions received.

Washington said: “The opportunity here is to see how we can accelerate projects without doing harm to other projects.

“This is a race to get projects designed and construction ready. I’m not letting anything stop me, I’m running over people…we’ve got to do this.”

The 2017 P3 Hub West conference was supported by Arup, Acciona, HDR, Nossaman, Plenary, and the Long Beach Judicial Partners.

This page was last updated on:
22 September 2017.

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