SUCCESSFUL Public/Private PARTNERSHIPS FROM PRINCIPLES TO PRACTICES EDITED BY STEPHEN B. FRIEDMAN ULI Public/Private Partnership Councils SUCCESSFUL Public/Private PARTNERSHIPS FROM PRINCIPLES TO PRACTICES EDITED BY STEPHEN B. FRIEDMAN ULI Public/Private Partnership Councils Recommended bibliographic listing: Friedman, Stephen B., editor. Successful Public/Private Partnerships: From Principles to Practices. Washington, DC: Urban Land Institute, 2016. ISBN: 978-0-87420-378-3 © 2016 by the Urban Land Institute 2001 L Street, NW Suite 200 Washington, DC 20036-4948 Cover photos: center: Crossings/900, Redwood City, California (Chad Ziemendorf); top left: Shops and Residences of Uptown Park Ridge, Park Ridge, Illinois (OKW Architects, photographer: Charlie Mayer); top right: Governor George Deukmejian Courthouse, Long Beach, California (© Robb Williamson/AECOM). All rights reserved. Reproduction or use of the whole or any part of the contents without written permission of the copyright holder is prohibited. ii About the Urban Land Institute The mission of the Urban Land Institute is to provide leadership in the responsible use of land and in creating and sustaining thriving communities worldwide. ULI is committed to ■■ Bringing together leaders from across the fields of real estate and land use policy to exchange best practices and serve community needs; ■■ Fostering collaboration within and beyond ULI’s membership through mentoring, dialogue, and problem solving; ■■ Exploring issues of urbanization, conservation, regeneration, land use, capital formation, and sustainable development; ■■ Advancing land use policies and design practices that respect the uniqueness of both the built and natural environments; ■■ Sharing knowledge through education, applied research, publishing, and electronic media; and ■■ Sustaining a diverse global network of local practice and advisory efforts that address current and future challenges. Established in 1936, the Institute today has more than 38,000 members worldwide, representing the entire spectrum of the land use and development disciplines. Professionals represented include developers, builders, property owners, investors, architects, public officials, planners, real estate brokers, appraisers, attorneys, engi- neers, financiers, academics, students, and librarians. ULI relies heavily on the experience of its members. It is through member involvement and information resources that ULI has been able to set standards of excellence in development practice. The Institute has long been recognized as one of the world’s most respected and widely quoted sources of objective information on urban planning, growth, and development. About the ULI Foundation The mission of the ULI Foundation is to serve as the philanthropic source for the Urban Land Institute. The Foun- dation’s programs raise endowment funds, major gifts, and annual fund monies to support the key initiatives and priorities of the Institute. Philanthropic gifts from ULI members and other funding sources help ensure ULI’s fu- ture and its mission of providing leadership in the responsible use of land and in creating and sustaining thriving communities worldwide. About the Public/Private Partnership Council The mission of the Public/Private Partnership Council (PPPC) is to develop, refine, and disseminate best practices for effective real estate public/private partnerships. The Council is a vibrant community of practitioners who learn from one another through hands-on examination of projects, discussion and debate of emerging industry trends, and the development of resources to improve outcomes for both the public and private sectors. The Council offers members the opportunity to examine completed projects in the cities where it meets through first-hand review of sites and presentations by the public/private development teams that made them happen. All property types are considered by the Council, as long as they have a tangible development and investment component from public and private sources. III About This Report ULI Senior Executives This document was the work of a committee organized from the Patrick L. Phillips membership of the ULI Public/Private Partnership Councils, both Global Chief Executive Officer the Gold and Blue Flights. Michael Terseck Organizer Chief Financial Officer/Chief Administrative Officer Tyrone Rachal, Principal, Red Rock Global Cheryl Cummins Chair and Editor Global Governance Officer Stephen B. Friedman, President, SB Friedman Development Advisors Jeanne R. Myerson Contributing Authors Chief Executive Officer, Americas Mark Burkland, Partner, Holland & Knight Lisette van Doorn Joseph E. Coomes Jr., Of Counsel, Best Best & Krieger* Chief Executive Officer, ULI Europe Stephen B. Friedman, President, SB Friedman Development Advisors* Jeffrey Fullerton, Director, Edgemoor Infrastructure and Real Estate John Fitzgerald Clayton Gantz, Partner, Manatt, Phelps & Phillips LLP* Chief Executive Officer, ULI Asia Pacific Ryan Johnson, Director, Edgemoor Infrastructure and Real Estate Kathleen B. Carey Neisen Kasdin, Office Managing Partner, Akerman LLP President and Chief Executive Officer, ULI Foundation Charles A. Long, Principal, Charles A. Long Properties David Scheuer, President, the Retrovest Companies † Adam J. Smolyar Russ Weyer, President, Real Estate Econometrics Inc.* Chief Marketing and Membership Officer *Editing Committee Steve Ridd †Deceased Executive Vice President, Global Business Operations Other Committee Members Stephanie Wasser Peter DiLullo, LCOR Inc. Executive Vice President, Member Networks Sakura Namioka Brad Power Cassie Stinson, Shareholder, Boyar Miller Support Grace Kim, Marketing Director, SB Friedman Development Advisors ULI Project Staff Jess Zimbabwe, Executive Director, Rose Center for Public Leadership, Kathleen Carey National League of Cities and the Urban Land Institute President and Chief Executive Officer, ULI Foundation Financial Support James A. Mulligan ULI Foundation Senior Editor Laura Glassman, Publications Professionals LLC Manuscript Editor Betsy Van Buskirk Creative Director John Hall Design Group, Beverly, Massachusetts Book Design and Production Craig Chapman Senior Director, Publishing Operations IV DEDICATION This report is dedicated to the memory of David Scheuer, late president of the Ret- rovest Companies, Burlington, Vermont. David contributed to this report and more im- portantly was an environmentally sensitive and award-winning developer who practiced the art and science of high-quality development through public/private partnerships. He was also a leader in promoting ULI’s Healthy Places Initiative. He succumbed to ALS in August 2015 before this project was complete. He will be missed at ULI and from the ongoing effort to bring about better places through the collaborative and cooperative efforts of the public and private sectors. DEDICATION V CONTENTS 1 Introduction ......................................................................................................... 2 Joseph E. Coomes Jr. and David Scheuer 2 What We Mean When We Say Public/Private Partnership ................................ 6 Joseph E. Coomes Jr., Mark Burkland, and Jeffrey Fullerton 3 From Principles to Practices ............................................................................... 14 CREATING A SHARED VISION AND PUBLIC PURPOSE ...............................................16 Neisen Kasdin ASSEMBLING THE DEVELOPMENT TEAM ..................................................................20 Mark Burkland and David Scheuer PROACTIVE PREDEVELOPMENT FOR SUCCESSFUL PPPS ...........................................24 Clayton Gantz CREATING RELATIONSHIPS BETWEEN DEVELOPERS ................................................28 AND PUBLIC BODIES Stephen B. Friedman and Clayton Gantz THE “BUT FOR” PROBLEM AND THE NEED TO MAKE A FAIR DEAL .........................32 Stephen B. Friedman and Charles A. Long ASSESSING FISCAL IMPACTS AND COMMUNITY BENEFITS OF PPPS ........................38 Russ Weyer STRUCTURING DEVELOPMENT PARTNERSHIP DEALS ...............................................42 Stephen B. Friedman and Charles A. Long EVALUATING AND STRUCTURING INFRASTRUCTURE AND FACILITY PPPS ..............52 Jeffrey Fullerton and Ryan Johnson MANAGING RISK AND SHARING SUCCESS ................................................................58 Joseph E. Coomes Jr. and Charles A. Long DOCUMENTING AND MONITORING DEALS ..............................................................60 Mark Burkland 4 Conclusion .......................................................................................................... 63 Stephen B. Friedman, Joseph E. Coomes Jr., and Clayton Gantz Resources ........................................................................................................... 65 NOTES ...........................................................................................................................66 INTRODUCTION 1 JOSEPH E. COOMES JR. AND DAVID SCHEUER South Campus, University of Illinois at Chicago, Chicago, Illinois. SB Friedman Development Advisors 2 SUCCESSFUL PUBLIC/PRIVATE PARTNERSHIPS en years ago, the Urban Land Institute published Ten Principles for Successful Public/Private Partnerships.1 That publication set forth core principles essential for successful accomplishment of joint development by the public and private sectors, benefiting both, that neither could achieve independently. Those ten principles remain as applicable today as they were then, but the challenges