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This will be the last issue of P3 Digest for 2016. In 2017, NCPPP will take a publishing hiatus to revamp the way we disseminate news. Please visit our website regularly to remain up to date on the many events and resources we will offer in the coming year. Through periodic updates for NCPPP members, we also will provide news and insight on how Congress and the incoming administration may influence the P3 landscape over the next four years. Information on how to join NCPPP is available on our website. We wish everyone happy holidays and a healthy, fulfilling new year.
Trump’s trillion-for-transportation plan losing traction? Repealing President Obama’s health care insurance program and overhauling the tax code — rather than finding ways to fund infrastructure projects — could top President-elect Donald Trump’s agenda over the first nine months of the year, according to Reince Priebus, chairman of the Republican National Committee and Trump’s chief of staff. Senate Majority Leader Mitch McConnell (R-KY) has said he is not interested in Trump’s proposal to spend $1 trillion on such projects. The president-elect may have signaled this when he told the New York Times in November that transportation infrastructure issues would be an “important factor” but not the “core” of his agenda and that such projects were not likely to be a “big part” of his efforts to increase job growth. Further, Trump has chosen Rep. Mick Mulvaney (R-SC) to become director of the Office of Management and Budget, who has expressed interest in cutting domestic spending, which could reduce the likelihood of massive federal infrastructure funding. … Meanwhile, former Transportation Secretary Ray LaHood is urging federal lawmakers to create an infrastructure bank that would allow states and local governments to attract private financing for innovative projects and raise the gas tax to cover existing retrofit and repair projects, reported Politico. He also called for additional funding under existing programs such as TIFIA and TIGER, permitting tolling and vehicle-miles-traveled fees where these approaches are accepted.
Don’t mess with the munis! Leaders of the U.S. Conference of Mayors asked Trump when they met with him in New York on Dec. 15 to protect the federal tax exemption on income from investing in municipal bonds. Trump indicated that he supports the exemption, the mayors said. State and local officials are worried that Congress could decide to remove the tax exemption to help pay for tax reform and that tax cuts under the reform plan may “make the bonds less attractive to investors, requiring higher yields and, in turn, increasing the cost of infrastructure projects,” wrote Politico Tax Editor Toby Eckert. Mayor Stephen Benjamin of Columbia, S.C., pointed out that $2 trillion has been spent on infrastructure through municipal bonds since 1913, much of it over the last decade. … However, Massachusetts has scrapped its plan to refinance hundreds of millions of dollars in municipal bonds to fund transportation projects in the face of the Federal Reserve’s recent announcement that it would raise interest rates.
Pro-P3 movement in Louisiana. Two of 10 resolutions the Louisiana Governor’s Task Force on Transportation Infrastructure Investment adopted Dec. 13 to address the state’s multimodal transportation needs are P3-related. Resolution 1 recommends using tolls to supplement new sources of recurring revenue for state transportation projects; Resolution 2 calls for the use of P3s to fund such projects and lists five that could be “immediately viable” for P3 solicitations, contingent on identification of sufficient recurring funding for them. The task force pledged to recommend sufficient recurring revenue sources for multimodal transportation projects to the governor by Jan. 1, 2017.
Anotherairport rent-a-car P3. The South Jersey Transportation Authority has issued an RFP for a DBFOM project involving the development of a facility that would consolidate the operations of four rental car companies at the Atlantic City International Airport in Egg Harbor Township, N.J. The authority plans to enter into a long-term lease, including renewal options, with the selected developer. Proposals are due Jan. 26, 2017. Los Angeles World Airports recently issued an RFQ for developers to design, build, finance, operate and maintain a facility that will consolidate more than 20 rental car company operations in one facility.
Tolls coming to Toronto? The Toronto Council voted to study and seek public consultation on the option of imposing tolls on the Gardiner Expressway, a transportation funding approach that Mayor John Tory has championed. The decision followed the announcement by city staff in November that the cost of repairing the aging highway rose by C$1 billion to C$3.6 billion because of an anticipated lack of federal or provincial funding for the project.
Never say never. Although Massachusetts Gov. Charlie Baker vetoed the state legislature’s proposal to conduct a vehicle miles traveled pilot program in August, his administration may pursue it in the future if certain concerns are addressed. According to his administration’s internal emails, Baker worries that the tax could be burdensome to rural constituents who lack access to public transportation and wants to learn about emerging technologies that could support the program, along with any financial obligations the state might incur by conducting the pilot. Baker also said he would oppose such a program if it would be imposed in addition to rather than replacing the state’s gas tax. … Washington state is on track to temporarily replace its gas tax with a vehicle miles traveled pilot program in the fall of 2017. Up to 2,000 volunteers will participate in the project. But according to an analysis conducted by a local television news affiliate, owners of hybrid or electric cars are likely to pay more under the year-long pilot project than they pay through the gas tax while drivers of conventionally fueled vehicles will pay less.
From parking lot to paradise: Real estate development and investment firm StonebridgeCarras, LLC conducted an award-winning P3 project, transforming two suburban Maryland parking lots into a highly successful and aesthetically pleasing mixed-use development. We asked Jane Galbraith Mahaffie, a principal at StonebridgeCarras, to talk about the project and provide an overview of other P3 projects in the StonebridgeCarras portfolio. (Read more).
Milestone moment. The United States’ first off-shore wind farm near Block Island, R.I., began generating energy Dec. 12. The 30-megawatt Block Island Wind Farm can generate enough energy to power 17,000 homes and may reduce Block Island residents’ electric bills by up to 40 percent. The design-build project’s developer, Deepwater Wind, plans to build the 90-megawatt South Fork Wind Farm off Montauk, N.Y., and and the 120-megawatt Skipjack Wind Farm off the coast of Maryland.
WIIN win. President Obama signed the Water Infrastructure Improvements for the Nation (WIIN) Act, Dec. 16. The law authorizes funding for water projects throughout the nation, including $170 million to help communities deal with threats to their drinking water. The WIIN Act includes provisions to address California’s drought conditions and federal and state water project operations under the Endangered Species Act for up to five years.
Another UMass P3 project. The University of Massachusetts Amherst plans to issue RFIs to invite developers to propose projects — which could involve P3s — that could be built on the flagship campus and others in the state university system. Potential projects include mixed-use development at various locations and faculty and student housing on the Amherst campus. The system’s Boston campus recently closed on financing for its first student housing P3 project. … Southern Illinois University is considering a P3 to develop and finance up to two residence halls on its Carbondale campus, at least one of which would open by the fall 2020 semester. The university’s board of trustees may however, decide to issue bonds for the project rather than building it through a P3.
Sports in Silver Spring? Montgomery County, Md., is looking for developers to design, build and operate a 5,000-seat multi-purpose indoor sports arena, public assembly and entertainment facility, with adjacent retail and residential facilities in downtown Silver Spring. One potential site, which covers 2.8 acres and is occupied by two parking garages and a connecting bridge, is adjacent to the multi-modal Silver Spring Transit Center. Responses to the RFP are due April 10, 2017.
NCPPP MEMBER SPOTLIGHT
Butler Snow LLP, Donald Clark, Jr., Chairman
Headquartered in Jackson, Mississippi, with offices throughout the United States and in London, Hong Kong and Singapore.
Describe your company’s work in P3s:
Our attorneys have assisted clients with the development and financing of P3-type projects in a variety of sectors, including transportation, energy, water/wastewater, healthcare, education, housing, manufacturing, stadiums and hospitality, and utilizing a variety of incentives, including tax-exempt bonds, tax increment financing bonds, New Markets Tax Credits and other federal and state tax credits and tax abatement and PILOT agreements.
Why did your firm join NCPPP?
To keep up with the latest developments in the P3 industry and to interact with other P3 professionals.
What is the most interesting P3 project your firm completed or in some way participated in during the last year?
We served as tax credit counsel to the developer in connection with the redevelopment of the Sears Crosstown Building in Memphis into a 1.1-million-square-foot vertical urban village dedicated to the cultivation of health, education and the arts with restaurants, retail spaces, office and commercial spaces, a public charter school and mixed-income apartments. We also assisted with the structuring of certain other of the more than twenty funding sources for the project, including qualified energy conservation bonds issued by the city.
What is the most interesting P3 project your firm will be working on in the future?
We are working with a municipality that desires to finance broadband infrastructure and contract with a private partner to design, build, operate and maintain the asset.
Veolia North America, Bill DiCroce, President and CEO
Headquartered in Boston; serves in the United States, Canada and the Virgin Islands.
Describe your company’s work in P3s:
Veolia blends skills in operations, engineering and technology with innovative business models, offering a complete range of environmental solutions to meet the challenges of cities, governments, campuses, businesses and industries.
Why did your firm join NCPPP?
To promote the private sector’s ability to deliver value and industry best practices that benefit communities while preserving public ownership of critical water infrastructure.
What is the most interesting P3 project your firm completed in the last year?
From the nation’s first P3 in Burlingame, Calif., to serving long-term clients in Tampa Bay, Atlanta/Fulton County, and New Orleans, Veolia values its many partnerships with North America’s most dynamic and progressive communities.
What is the most interesting project your firm will be working on in the near future?
As communities seek to maximize precious resources, Veolia looks forward to helping partners advance environmental initiatives, generating power from the wastewater treatment process, and meeting stringent safety and compliance goals and objectives.
WHAT’S GOING ON AT NCPPP?
Here’s a quick peek at the upcoming NCPPP calendar:
- P3Bootcamp — Feb. 21-22 — Miami
- P3Bootcamp — March 15-16 — San Francisco
- P3Bootcamp — May 2-3 — Philadelphia
For more information about event programs, registration and sponsorship, please visit NCPPP’s website.