When Miami-Dade College wanted to fund an expansion of its medical campus near Jackson Memorial Hospital, it turned to a hybrid public-private partnership model to develop 170,000 square feet and a parking garage on its 4.5-acre property. It received bids for projects such as a hotel, conference center, retail and residential space.
Most commonly found in Florida, hybrids have yet to become a mainstream public-private partnership model.
“The hybrid model presents a unique set of complexities,” said Marv Hounjet, vice president, U.S. operations at Plenary Group. “Essentially, it is a lease structure with a government entity that has a commercial enterprise attached to it. The concept is to have the commercial enterprise fund the public’s purpose built facility. But determining when and where this model will pencil out can be a challenge.”
Hounjet will moderate “The Great Debate: Developer Lease/Hybrid Model versus 63-20 Corp. versus P3” panel at P3 Connect. Panelists will include John Finke, senior program manager at the National Development Council, Mike Pikiel, partner at Fulbright & Jaworski LLP, and Joe Sullivan, partner at Hawkins Delafield & Wood LLP.
63-20 corporations, authorized by the IRS in 1963, allow municipalities to create non-profit entities that issue tax-exempt bonds to finance public projects. In contrast, traditional P3 financing involves entirely private entities financing and designing, building and/or operating a public good or service.
“The purpose of this panel is to educate the audience about the range of project delivery options” Hounjet said. “After hearing about the trade-offs, attendees should be better informed as to what might work for them.”
Following short presentations on each model, Hounjet will lead a discussion about the benefits and drawbacks of each model in regards to the financing, construction and operations and management of a traditional project.
The discussion is one of more than 20 sessions at P3 Connect. Visit the P3 Connect website to see the most up-to-date list of speakers and topics.