By Al Maloof, Daily Business Review
The state of Florida and its local governments have an urgent need for public works and other critical infrastructure projects.
This is driven by several factors, including years of underfunding from all levels of government, the state’s growing population and the increasing demands of technology.
Having assessed some of those needs for prior administrations, it’s obvious we must think more creatively about how the public and private sector can build these projects.
In Florida, we have seen public-private partnerships thrive with the $2.3 billion Interstate 4 Ultimate Improvement Project in Orlando, $1 billion Port Miami Tunnel and $1.2 billion Interstate 595 Express Corridor Improvements. In these P3 projects, government and the private sector worked hand in hand to fill transportation needs that have improved quality of life while adding high-paying jobs.
As a former chairman of the Miami-Dade Expressway Authority operations committee and later as a consultant to numerous domestic and international infrastructure companies, I quickly discovered it takes the right team of design, engineering, construction, finance and operations professionals to make a P3 work.
The difference maker in getting complex multi-year projects from the drawing board to completion has been the people, not just the plans.
In the past, P3 projects have been limited to water utilities, transportation and the environment, but that could change dramatically if legislation recently filed in Congress becomes law. ThePublic Buildings Renewal Act, which has bipartisan support, represents an opportunity to modernize and replace aging public buildings and facilities such as libraries, courthouses, post offices, public schools and jails.
The companion bills would enable state and local governments to establish P3s and float private activity bonds, which are expected to grow exponentially from the initial target of $5 billion.
This expansion would resolve many of the funding challenges that have created an undue burden on government. How? The main bill would enable private companies to tap into tax-exempt financing that, because of backing of the U.S. Treasury, wouldn’t burden local and state government.
With that money, we could repair or replace aging public hospitals, libraries, police stations, municipal centers and other government buildings.
What we need most is to persuade government leaders to see the benefit of working with the private sector. Based on the fact that most major national infrastructure associations are supporting the bill, there is no question the private sector is interested in exploring the extraordinary benefit of alternative delivery and innovative project implementation.
The national track record for such projects has already been established. Nearly all U.S. transportation P3 projects have accessed federal financing, with 75 percent taking advantage of private activity bonds. More than $18 billion worth of transportation P3 projects have moved forward nationwide since 2008. Those projects have collectively enjoyed a minimum $5 billion cost savings thanks to the availability of tax-exempt bonds and the lower interest rates associated with them.
Let’s welcome government entities and private companies back to the table to explore the potential of these new types of projects and invite those who have yet to experience a P3 project to join them. There are many who see a great opportunity for Florida to not just address overdue needs but move ahead as our state takes a larger role in the future of our country.
Al Maloof is the managing partner of GJB Consulting LLC, an affiliate of Miami law firm Genovese Joblove & Battista. He may be reached at firstname.lastname@example.org Maloof is a leader in the P3 sector and was a member of the working group that helped secure sponsors for the federal Public Buildings Renewal Act.