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PPP’s – Florida’s Past and Future

By: Doug Storer
April 2012

Public-Private Partnerships (PPP) are once again at the forefront of the debate for new solutions to delivering Florida’s much-needed and underfunded public facilities and infrastructure. The 2012 Florida Legislature debated legislation that would serve to encourage the alternative development, financing and ownership of public facilities and infrastructure only to let the PPP bill die in the final days of the session.

This runs contrary to a national trend to encourage PPP projects through enabling legislation. “There has been a remarkable increase in interest in PPPs with a nearly 30% increase (from 24 to 31 states) in state legislatures passing PPP statutes in just the last two years,” according to Richard Norment, Executive Director, National Council for Public-Private Partnerships.

Florida served as a catalyst for this national trend when Governor Dan McCarty signed legislation creating Florida’s Turnpike Enterprise in 1953, which operated like a private-sector business within the Florida DOT resulting in the Florida State Turnpike Authority.  Florida was also driving the national PPP movement in 1997 when Florida Congressmen, Senator Bob Graham (Democrat) and Representative Clay Shaw (Republican) introduced legislation that would encourage U.S. private investors and developers to construct new school facilities and rent them to public school systems under long-term leases. Although Congress did not enact Graham’s proposal, President George W. Bush delivered on a campaign promise and enacted PPP legislation in the form of the Economic Growth and Tax Relief Reconciliation Act of 2001.

This act led to a national proliferation of PPP legislation at the state level and hundreds of innovative PPP projects across the country. Virginia’s Public-Private Educational Facilities Infrastructure Act (PPEA) has been used extensively by agencies in the Commonwealth to deliver a wide range of projects since its enactment in 2002. The Stafford County Virginia Learning Village was one of the first projects resulting from the new legislation. The PPP solution included an elementary school and a high school, recreational fields, a private senior living development, YMCA/Community Center and a college branch campus. This innovative project involved private development and delivery of public schools, revenue generation from private development and joint use of public facilities.

In Washington, D.C. the James F. Oyster Bilingual Public Elementary School was in danger of closure due to the city’s financial crisis and a crumbling, inadequate building. The District of Columbia lacked the capital funds to renovate the nearly 70 year old building to accommodate the educational needs of the school, meet the recreational needs of the community and comply with modern design standards and building codes. The solution was an innovative PPP – a 48,000 sf building and an adjacent 211-unit apartment building. A PPP was formed between D.C. Public Schools, the District of Columbia and LCOR Incorporated, a national real estate development company.

Technology Enterprise Park (TEP) is a PPP development affiliated with the Georgia Institute of Technology. The project contains more than 600,000 sf of high-performance, life-science research facilities and laboratory space. The genesis of the project was to address a lack of available wet-lab facilities in the City of Atlanta and the State of Georgia and to foster the establishment of a cluster community of wet-lab users, research scientists and commercial biosciences companies.  Gateway Development was engaged by The University Financing Foundation (TUFF) as developer-at-risk to manage all aspects of the design and construction required to deliver a fully functioning facility.

What Florida started 60 years ago has now come back to the forefront as the solution to provide Florida universities, colleges, school boards, counties and municipalities with additional tools to find innovative ways to improve public facilities and infrastructure. Is Florida denying its innovative heritage in PPP projects that has served as a solution for so many other states across the nation? The good news for Floridians is that PPP projects are now being accomplished through a myriad of current laws and creative financial and procurement structures. However, specific PPP legislation is sorely needed to simplify, encourage and broaden the use of PPP.

Mr. Storer is a nationally recognized expert in PPP who has participated in successful legislative initiatives and the finance, development, design, construction and implementation of PPP projects across the country.

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