Keeping it Real

18 April 2017 JLL managing director Jill Jamieson speaks to Dan Colombini about the firmís move into P3s and the ongoing challenges at federal level

“Ultimately my role is not just P3 but to help agencies deliver on their missions,” says Jill Jamieson, managing director at financial and professional services firm JLL.

“I’m relatively new in the US infrastructure market but have over 25 years working with P3 and alternative finance and delivery, so that provides me with a unique perspective.”

Her timing could not be better. As Donald Trump’s administration gets its feet under the table, the use of private financing to plug the massive US infrastructure gap is set to rise. So, with this huge hurdle ahead of it, the government is now looking to key players in the industry to assist with its plans.

Enter Jamieson. Now heading up the P3 practice at JLL, she brings a strong pedigree of P3 experience to the table, to combine with the firm’s impressive background in commercial real estate.

With a personal background in investment banking that spans advising the Costa Rican government on its infrastructure plans through to running the infrastructure advisory team at Deloitte, Jamieson is no stranger to her task.

“The firm believes P3s are the future,” she says. “And we are now going beyond the vertical and social infrastructure deals and into the heavy, civil infrastructure space. Heavy civil is where the nation needs $7trn in infrastructure investment by 2030. This has driven JLL to expand its portfolio and perspective.”

JLL has a strong pedigree at the federal level and continues to advise on the Military Housing Privatization Initiative, as well as working closely with the General Services Administration (GSA) on everything from enhanced use leases to more traditional P3s.

But under Jamieson’s stewardship, the firm’s presence at the forefront of the federal government’s fledgling plans is increasing.

“On a wider scale, I advise federal, state, and local governments as well as university clients,” she explains. “But most recently at federal level I have spent time with the Army Corps of Engineers (USACE), which launched its P3 efforts as part of the Water Resources Reform and Development Act.”

The program, which authorizes $10.6bn in water infrastructure projects across the country, has already seen the launch of the bi-state Fargo-Moorhead Flood Diversion deal, as well as the Grand Prairie Irrigation project Arkansas. But, as ever with the feds and P3s, progress has been slow.

“There are a number of constraints which impede using P3 at the federal level,” Jamieson warns.

“If the new federal government really does want to use P3 for infrastructure, then the obstacles blocking that from happening need to be addressed in a timely and effective manner.”

This is something the Trump administration is very publicly seeking to do. But as yet, the industry remains in the dark as to the nuances of the administration’s proposals – an issue that Jamieson is keen to clarify.

“The federal government can’t impose P3,” she says. “For a start it is bad policy, as you don’t want to force somebody to use a delivery mechanism that may not be appropriate.

“Some of the things that are being discussed now will help of course,” Jamieson adds. “Tax credits, for example, will help to minimize the differential between the public funding and private investment requirements. It also might encourage people who are on the fence to look at the model objectively for the first time.”

But Jamieson stresses that what a lot of state and local folks really need is a funding source. “They would like a ‘bucket of money’ to get their projects done. This can be used for traditional delivery or P3s, but no projects can get done without a funding source, whether from taxes or user fees. This is the challenge. It’s not the financing, it’s the funding issue that needs to be addressed.”

With improvements already made to the federal grant programs, such as TIFIA, as part of the creation of the new Build America Bureau, this was acknowledged under the Barack Obama administration. This leaves the new government in a strong position to deliver. But Jamieson is calling for more.

“What the feds offer best is the ability to enable infrastructure delivery, through access to federal credit programs and low cost financing,” she explains. “What we now need to do is shorten the approval process and lower the thresholds for these programs.” But this is not the only role she sees for the feds going forward.

Jamieson foresees that the government under the new regime must now strive to unlock the potential for its own pipeline of deals, to build on the work already done with USACE and others.

“I think the real game changer will not be what the feds do for state and local government, but whether it can unshackle itself to allow for more federal projects to be delivered in a timelier and more cost-effective manner,” she claims. “There is a whole sector of deals out there that are ripe for investment.”

One project coming from the feds that is already whetting the appetite of the industry is the Smithsonian Institution’s new Central Parking Facility P3 at the National Zoological Park in Washington, DC. With legal advisors Kutak Rock recently signed up, alongside JLL as transaction advisors, it is a deal of some promise.

In addition, at the time of going to press, the US Bureau of Reclamation was due to announce a series of potential P3 projects imminently, supporting Jamieson’s view that the potential for federal projects is ready and waiting.

“In an administration that is touting P3 as its cornerstone, no agency should be left behind,” says Jamieson. “So it is important for them to start to begin exploring options within the market.”

Whatever your view of federal P3s at this stage, however, they remain far from the only potential growth sector in the US. One area that Jamieson’s team will also be tracking is the university housing sector – long championed as a hub of opportunity for the market.

“According to Moody’s, one in ten universities is suffering acute financial distress and given current demographics, this trend is expected to continue,” she explains.

“We now have an entire practice dedicated to P3 and asset optimization in higher education. It is a booming area and we are seeing these institutions rising to the challenge.”

So, how does all this sit with a firm whose traditional remit has been real estate development – after all, the US P3 market, even before the emergence of Donald Trump, has always been a complex beast.

“Things are becoming more integrated now,” Jamieson concludes. “Take Merced [the University of California’s Merced 2020 project], for example. That project involves real estate, water, roads and energy, so these deals are becoming broader.

“Making the switch to P3s makes sense. A lot of the construction companies are broadening their service offerings and JLL is no different. I think we may start to see more of that holistic lifecycle, multi-sector approach to infrastructure in the future.”

This page was last updated on:
18 April 2017.

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Keeping it Real

JLL managing director Jill Jamieson speaks to Dan Colombini about the firmís move into P3s and the ongoing challenges at federal level

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