Infra Insight Blog

The U.S. Department of Transportation (USDOT) recently announced a long-awaited Notice of Funding Opportunity (NOFO) for public agencies to enhance technical capacity to deliver projects using a public-private partnership (P3) model. Authorized by the Infrastructure Investment and Jobs Act (P.L. 117-58; also known as the IIJA), $57.72 million is available through the Innovative Finance and Asset Concessions Grant Program (Program) for public agencies to hire technical, financial and legal experts (either on staff or as consultants) to support the evaluation and delivery ...

On December 1, 2022, Nossaman partner Simon Santiago moderated a panel at the 2022 P3 Government Conference held in Arlington, Virginia, titled, “Best Practices for Successful P3 Procurements: Identify the Appropriate P3 Process for Your P3 Approach.” The panelists, comprised of Jack Callahan (Partner and Construction Industry Practice Leader, CohnReznick); Michael Kerrigan (Principal, Delgany Advisory); and Brandey McDonald (Project Director, Infrastructure Asset Management, Fengate), offered a variety of perspectives from the lens of legal, technical and ...

Yesterday, the Senate released legislative text for its highly anticipated bipartisan infrastructure package, titled the ­­­­­­­­Infrastructure Investment and Jobs Act. Negotiations have been ongoing for months, and while several political and policy hurdles remain before this proposal can arrive on the President’s desk for his signature, agreement on this bipartisan package is a hugely positive development. Project sponsors and practitioners have closely tracked the development of this package not only with respect to overall funding levels and policies but ...

State departments of transportation across the country currently find themselves at a cross-roads where traditional sources of infrastructure funding may not generate sufficient revenues for addressing aging transportation infrastructure. States generally rely on “user fee” revenues generated from fuel taxes, vehicle sales taxes and registration fees to support transportation infrastructure spending. The user fee funding model has come under scrutiny in light of recent trends, such as urbanization, electric vehicles, micro mobility and ride-sharing services. In ...

Universities have utilized public-private partnerships (P3s) in recent years to facilitate various types of campus construction projects, including campus housing, specialized facilities, utility systems and even overall campus expansions. Utilizing P3s for campus improvements has allowed universities to deliver important projects and leverage private industry expertise while shifting capital cost investments to the private sector.

Despite the growing trend of using P3s to deliver projects, the COVID-19 pandemic may impact universities’ interest in utilizing P3 ...

The enormous deficit in public transportation funding, coupled with appetite from  capital markets, have increasingly triggered the use of public-private partnerships (P3s) to design, build, finance, operate, and maintain the largest and most expensive transportation projects. The use of P3 delivery methods brings with it new challenges for navigating complex federal environmental requirements that govern infrastructure project development.  Nossaman partners Robert Thornton and David Miller discuss innovative solutions to these challenges in a new paper published in ...

The University of Iowa has entered into a 50-year utility public-private partnership (P3), engaging a private partner to operate, maintain, optimize, and improve the University’s existing utility system and help the University transition to coal-free energy production by 2024. ENGIE North America and Meridiam will serve as the University’s private partner. According to the University, the deal represents one of the first utility P3s entered into by any university in the country.  

Under this 50-year P3 agreement, the University’s private partner will provide steam ...

Watch out Silicon Valley, Sacramento is gearing up to launch a research center and prototype lab focused on developing electric and autonomous vehicle technologies.  The California Mobility Center is largely funded by the Sacramento Municipal Utility District and supported by a band of public and private partners, including the City of Sacramento, Greater Sacramento Economic Council, Los Rios Community College District, University of California Davis, California State University Sacramento, PEM Motion, and Valley Vision Inc.  EnerTech of Toronto will be managing the ...

A few weeks ago, I had the privilege of again attending CoMotion LA.  Spearheaded by John Rossant, CoMotion LA brings together leaders and innovators of new solutions to solve the mobility issues of our modern world.  One of the central themes was adopting new mobility solutions to relieve congestion, an increasingly prevalent reality as populations in cities continue to grow.

During the panel on “Financing the Future:  Public-Private Partnering for New Mobility Solutions,” a panel comprised of representatives from the Canadian electric school bus manufacturer Lion Electric ...

Last December we told you about favorable IRS guidance letting P3 contractors and investors keep full tax deductions for interest on debt.[1] The IRS kept a P3-friendly approach in last week’s proposed regulations on qualified opportunity zones – which, like the interest limitations in our December post, come from the 2017 Tax Cuts and Jobs Act (TCJA).[2]  The qualified opportunity zone legislation promotes a broad range of real estate and business development in distressed areas, and these proposed regulations are particularly helpful to private parties contracting for and ...

One of the key events for the P3/infrastructure industry this year will be the P3 Policy and Delivery Summit, which is being held in Washington D.C. on May 14th and 15^th. The Summit is taking place during, and in partnership with, Infrastructure Week, and is poised  to attract industry leaders from the private sector and senior officials from federal, state, and local government. The event will be held at the Cosmos Club, a D.C. landmark listed on the National Register of Historic Places.

The Summit’s focus is to analyze the respective roles of federal, state and local government in ...

A pair of Senators from both sides of the aisle, Senator Todd Young (R-Ind.) and Senator Catherine Cortez Masto (D-Nev.), introduced the Public Buildings Renewal Act of 2019 last week, which would authorize the use of tax exempt financing along with private equity to rebuild schools and public buildings through public-private partnerships.  We owe it to our students and teachers, our firefighters and nurses, and all taxpayers to find a way to upgrade our schools and public buildings.  This is a public health and safety issue that impacts not just Hoosiers, but all Americans.  Our bill ...

Contractors and investors in P3s can continue taking a full tax deduction for interest on debt under recent IRS guidance (Revenue Procedure 2018-59, issued November 26). Many P3s are highly leveraged, and the interest deduction is a valuable tax benefit for developers. Were this deduction restricted, P3 developers’ (and by extension governments’) costs would rise; potential investors would demand higher rates of return; and infrastructure projects would be more costly.  Without this guidance, the 2017  tax law would otherwise severely restrict the interest deduction for ...

Los Angeles World Airports (LAWA) and LA Gateway Partners (LAGP) have reached commercial close on the design-build-finance-operate-maintain (DBFOM) agreement for the consolidated rent-a-car facility (ConRAC) at Los Angeles International Airport (LAX). In reaching this milestone, LAWA’s ConRAC project becomes the first public-private partnership for a ConRAC facility in the United States. LAGP will now proceed to close the financing for the project, which is expected to occur in December. The financing structure will be a private placement.

Leading up to commercial ...

The State of Delaware and a subsidiary of Gulftainer Company Limited (Gulftainer) have finalized a concession agreement for the operation and further development of the 100-year-old Port of Wilmington (Port).

While the concession agreement signed on September 18, 2018 is not publicly available, it is expected, based on deal terms described in Port documents submitted in support of approval of the P3 transaction,[1] that the agreement grants Gulftainer exclusive rights to manage the Port for a 50-year term. In return, Gulftainer agrees to invest up to $584M in the Port in the first ...

Los Angeles County Metropolitan Transportation Authority has posted notice of an opening for a position as Manager, Innovation in its Office of Extraordinary Innovation.

The job responsibilities will include:

• Managing and facilitating evaluation of unsolicited proposals submitted to the OEI

• Managing OEI’s P3 advisors

• Managing pre-procurement activities for P3 projects such as project screenings, qualitative and quantitative assessment and value for money analyses ...

In an effort to promote project flexibility, funding innovation, efficiencies and timely implementation, this week the Federal Transit Administration (FTA) released its final rule regarding P3s (and other private involvement) in public transportation projects.

The primary goal of FTA’s Private Investment Project Procedures (or PIPP), new 49 C.F.R. Part 650, is to identify and address FTA requirements that are impediments to the greater use of public-private partnerships and private investment in public transportation capital projects, while protecting the public ...

The Automated People Mover (APM) train system project at Los Angeles International Airport (LAX) reached a remarkable milestone this week with Los Angeles City Council’s unanimous approval of a $4.9 billion agreement with LAX Integrated Express Solutions (LINXS).

With City Council’s approval in hand, the City, acting through the Los Angeles World Airports (LAWA) Board of Airport Commissioners (BOAC), and LINXS reached commercial close on April 11^th, signing the project agreement. LINXS will now proceed to obtain private financing for the project, and financial close is ...

Much has been said already about President Trump's call to "rebuild our crumbling infrastructure," in his first State of the Union address. The President asked Congress to advance a $1.5 trillion infrastructure plan that, in part, should be "leveraged by partnering with state and local governments and, where appropriate, tapping into private sector investment."

But not all "crumbling infrastructure" is state and local infrastructure. The federal government's infrastructure also needs attention (e.g., river locks, some dams and levees, federal buildings, etc.). In late ...

President Trump recently appointed former Seyfarth Shaw LLP (Seyfarth) attorney Juan D. Reyes, III as Chief Counsel of the Federal Railroad Administration (FRA).  Mr. Reyes was previously a partner in the real estate department of the New York City office of Seyfarth and he led the firm’s P3 practice.  Proponents of P3s may be pleased to have a Chief Counsel that understands the potential benefits of P3s.

The appointment of Mr. Reyes marks a continuation from the Obama Administration of appointing counsel with P3 experience.  President Obama’s first FRA Chief Counsel, Karen ...

The Canadian government is taking a new approach to P3s.  By the end of 2017, PPP Canada will have ceased operations, and the Canada Infrastructure Bank (the CIB) will be launched.

Year end is nearly upon us.  What has PPP Canada accomplished, and what is expected from the new CIB?

PPP Canada’s Contributions

PPP Canada was established by the Harper government in 2008.  At that time, certain provinces were already very experienced in the delivery of large and complex public infrastructure projects using P3 delivery models (including British Columbia, Alberta and Ontario).  The specific ...

The United States has the largest emerging public-private partnership (P3) market in the world for infrastructure projects. Due to decreased tax revenue and shrinking budgets, many state and local governments in the southern United States have embraced alternative methods of project delivery. Public entities in the southern United States boast some of the most extensive P3 experience in the U.S. and it dates back to before the turn of the century with the Pocahontas Parkway in Virginia, Texas, and Florida pioneering several complex P3s.

Public officials and industry partners ...

The UC Merced 2020 Project was a big winner at P3 Bulletin’s annual P3 Awards ceremony held in Washington D.C. last month, claiming the Gold Award for Best Social Infrastructure Project, along with the Silver Award in the Government Agency of the Year category. The award comes approximately one year after the historic groundbreaking on the project, which is currently under construction.

The project consists of the comprehensive development, design, construction, financing, operations, and maintenance of academic, administrative, research, recreational, student ...

As part of an effort to facilitate the use of public-private partnerships (P3s) in public transportation capital projects, the Federal Transit Administration (FTA) issued on Monday a Notice of Proposed Rulemaking (NPRM) that aims to streamline the project approval process.

Under the proposed Private Investment Project Procedures (PIPP) set forth in the NPRM, recipients of Federal funding for public transportation projects would be able to request a modification or waiver of specific FTA requirements if the recipient demonstrates that those requirements discourage the use of ...

Los Angeles World Airports (LAWA) released the Final Request for Proposals (Final RFP) for the procurement of the elevated 2.25-mile Automated People Mover train (APM) at Los Angeles International Airport (LAX) on July 28, 2017. The Final RFP was provided to the three short-listed Proposer teams participating in the APM procurement.

The project is the first APM system to be procured through an availability payment public private partnership (P3) delivery model.  The selected Proposer will design, build and partially finance the APM system, and then will operate and maintain the ...

On Tuesday, May 16, 2017 the Senate’s Committee on Environment and Public Works Subcommittee on Transportation and Infrastructure will hold a hearing titled Leveraging Federal Funding; Innovative Solutions for Infrastructure.

The stated purpose of the hearing is for Senators to examine the need for more public sector funding and private sector financing in the Federal Highway Program.  To this end, the Subcommittee has scheduled the following individuals to testify on this topic:

• Eric Garcetti (Mayor, City of Los Angeles; Chair of U.S. Conference of Mayors Infrastructure ...

The National Council for Public Private Partnerships (NCPPP) and the Kentucky Chamber of Commerce recently concluded on October 28 a very well-attended two day conference in Lexington, Kentucky on the Commonwealth’s new public-private partnership (P3) enabling legislation, the so-called "HB-309.  HB-309’s chief drafter, Rep. Leslie Combs, was on-hand, participating in nearly every panel discussion, either as a panelist or from the audience.  Rep. Combs reflected on HB-309 as if she were a proud mama, and her and fellow Kentuckians’ enthusiasm for its flexibility ...

Over a thousand US public finance attorneys converged on the City of Chicago last week for the annual National Association of Bond Lawyers Bond Attorneys Workshop.  The conference, the oldest and largest of its kind, featured a number of breakout sessions devoted to a wide range of issues facing the public finance legal community, including the new management contract rules recently issued by the IRS, Revenue Procedure 2016-44 .  As I wrote sometime ago, NABL was a major influence proposing changes to the rules to make them less formulaic and more flexible given the range of business ...

Los Angeles World Airports (LAWA) reached a milestone in its estimated $5 billion Landside Access Modernization Program (LAMP) this week when it received statements of qualifications to design, build, finance, operate and maintain an automated people mover, in response to a request for qualifications issued by LAWA on June 9, 2016.  The five statements of qualification submitted on August 11, 2016 show significant interest by the industry in this program.  LAWA’s official press release has a complete list of the five teams.

The automated people mover, which will be approximately ...

The Regents of the University of California reached financial close on the UC Merced 2020 Project on August 16, 2016.  The project is the first higher education availability payment P3 project to be awarded in the United States, and may well serve as a template for future higher education capital projects, both within the UC system and nationally.

The Regents entered into the Project Agreement with Plenary Properties Merced LLC (PPM) for a 39-year contract term.  The PPM team includes Plenary Group, as sole equity member of PPM, Webcor Builders, as lead contractor, Skidmore, Owings & ...

The need to spend significant dollars on the repair and expansion of the nation’s public infrastructure is a major concern expressed by many.  Even the two presidential candidates for the major political parties, who don’t seem to agree on anything else, agree that a commitment to repair and rebuild the nation’s infrastructure is critical to economic productivity and opportunity for its citizens.

In a recent paper published by the Center for American Progress, a public policy and research organization, entitled Assessing Claims About Public-Private Partnerships, the ...

With the rapid pace of innovation and deployment of intelligent transportation systems (ITS) to enhance existing transportation infrastructure, transportation officials frequently procure and manage sophisticated systems that collect, use and maintain vast amounts of data. Today’s transportation officials must possess considerable technological proficiency in addition to their traditional expertise in civil engineering and construction.

Identifying technology to optimize infrastructure, and crafting complex technical specifications to procure the same, is ...

Public entities have recently been looking for new ways to harness right of way (ROW) for broadband public-private partnership (P3) projects.  Last year, the city of Santa Cruz made history by entering into a roughly $50 million P3 with local Internet service provider Cruzio to deliver 1-gigabit broadband access to every property in the city’s jurisdiction.  Construction began this month.  San Francisco is now considering pursuit of a similar P3.  On the other side of the country, the Pennsylvania Turnpike Commission (PTC) recently released requests for proposals for legal and ...

The National Council for Public Private Partnerships, reengineered its 2016 P3 Connect annual conference June 27 to 29, 2016, posing the question What’s Next for public-private partnerships in the United States.  NCPPP (as it is widely known in the P3 space) launched four Institutes to offer answers.  NCPPP created four separate Transportation, Energy, Real Estate and Social Infrastructure and Water institutes, each of which met in Chicago over the three day conference starting discussions with where are we now and ending with where do we go from here.

In parallel, NCPPP reprised ...

Financing for the Maryland Purple Line closed on Friday, June 17 – marking an important milestone for the Maryland Transit Administration’s (and Maryland Department of Transportation’s) plan to deliver a transit solution to ease travel between the Maryland suburbs and Washington, D.C.

Once the project reached commercial close in early April, the winning concessionaire, Purple Line Transit Partners LLC (PLTP), worked closely with the MTA/MDOT team to finalize the financing structure and various other issues. This culminated in a week of financial closings which allowed ...

The Regents of the University of California announced on June 15, 2016 that it has selected Plenary Properties Merced as the successful proposer for the UC Merced 2020 Project.

We are impressed by the creativity, efficiency and aesthetic qualities evident throughout the winning proposal, said UC Merced Chancellor Dorothy Leland.  Plenary Properties Merced has produced a compact, environmentally sensitive design that blends beautifully with our existing campus, facilitates our multi-disciplinary teaching and research methods, and provides flexibility for future changes in ...

Public agencies and private entities are increasing collaboration to develop, operate and maintain a variety of transportation and building projects.  The involvement of a public agency in these public-private partnerships or P3s may necessitate compliance with statutes or regulations not otherwise applicable to privately developed projects, including a requirement to pay prevailing wages to construction workers.  In a recent decision, the U.S. Court of Appeals held that a private project developed on land leased from the District of Columbia (D.C.) is not subject to the Davis ...

Voting and registration are officially open for the P3 Awards Gala hosted by InfraAmericas and The Performance Based Building Coalition (PBBC) which takes place on Monday, June 13 in New York City prior to the annual US P3 Forum held on June 15-16. The US P3 Forum is the P3 industry’s premier gathering of infrastructure professionals including infrastructure developers, investors, financiers, state and federal public officials and regional transportation authorities.

Voting

This industry awards dinner recognizes individual achievement in advancing P3 projects. The ...

On April 18, 2016, Los Angeles World Airports (LAWA) reached an initial milestone in its Landside Access Modernization Program (LAMP) by issuing instructions for how automated people mover operating system suppliers can request a determination of their eligibility to participate in an upcoming procurement.

As part of an overall modernization program at Los Angeles International Airport (LAX), LAWA is undertaking LAMP to alleviate congestion and provide better landside passenger movement around LAX.  The major elements of LAMP include a consolidated rental car center ...

On April 6, 2016, the Maryland Board of Public Works unanimously approved the public-private partnership (P3) agreement for the Maryland Purple Line light-rail transit project, concluding the 30-day review period described in our previous blog.  The contract documents previously signed by the concessionaire have now been signed by the Maryland Department of Transportation’s (MDOT) Secretary Pete Rahn and the Maryland Transit Administration’s (MTA) Administrator, Paul Comfort.

At the Board of Public Works hearing, Comptroller Peter Franchot praised both the Governor ...

On Wednesday, March 30, 2016, Florida’s Governor Rick Scott signed two bills that further advance the state’s existing public-private partnership (P3) framework and provide additional guidance for implementing P3s. The two new laws will go into effect on July 1, 2016.

SB 124 amends the 2013 law that authorizes counties, municipalities, school boards, and other political subdivisions to use P3s for a wide range of facilities, including education facilities, transportation facilities, water/wastewater facilities, roads, highways and bridges, healthcare facilities ...

The Illinois Senate is currently reviewing a bill that would greatly expand the authority of public agencies in Illinois to enter into public-private partnership (P3) agreements.  To date, such authority has been limited to the Illinois DOT, the State Toll Highway Authority and, in limited circumstances, local governments.

Democratic Senator Heather Steans introduced the bill on February 19th.  Shortly thereafter, in a show a bi-partisan support, Republican Senator Karen McConnaughay became a chief co-sponsor of the bill.

The bill, known as the Public-Private Partnerships ...

On March 2, Governor Larry Hogan and Maryland Department of Transportation (MDOT) Secretary Pete Rahn greenlighted procurement of the Purple Line by MDOT and the Maryland Transit Administration (MTA). The contract has been posted and is scheduled for review by the Maryland Board of Public Works in early April.

Part of the region’s ambitious transit strategic plan, the Purple Line is a 16.2 mile, 21 station light rail line that provides additional mobility to the region. MTA estimates total daily ridership will be 69,000 per day by 2030 (74,000 by 2040). The new line will interface ...

We all know how hard it is to change federal statutes these days—you need an Act of Congress and the President to sign the bill.  Last week, a group of the top public finance lawyers in the US offered an approach relating to the use of tax exempt bonds that wouldn’t require a change in tax statutes but instead could be accomplished through a change in the regulations relating to the so-called private use test.  As the group pointed out in its letter to high ranking US Treasury officials, Congress itself has made it clear that Treasury had the authority to adopt other, more flexible rules.

The ...

The Regents of the University of California (the Regents) approved the commercial terms of the P3 agreement for the UC Merced 2020 Project (the Project) on Thursday, November 19, 2015 at the Regents meeting held in San Francisco, contingent on a not to exceed limit on financial proposals.

The Regents’ approval authorizes the university to move forward with the Request for Proposals (RFP) phase of the Project with the three proposing teams that were shortlisted in January.  The equity members for these teams are:

• E3 2020:  Balfour Beatty Investments, Inc., Star America E3 2020 ...

Some recent events, taken together, provide evidence that policy-makers in the United States are growing more comfortable with public-private partnerships as a vehicle for project delivery, in particular with respect to the nation’s decaying infrastructure and bridging the resultant financing challenges.

Following President Obama’s Build America Investment Initiative early this summer, the U.S. Department of Transportation established the Build America Transportation Investment Center (or BATIC) that would, among other things, enable non-federal but still ...

A crucial highway improvement for the growing Phoenix region reached an important milestone November 2 when the Arizona Department of Transportation received proposals from all three short-listed teams vying to develop the Loop 202 South Mountain Freeway Project.  The three multidiscipline teams are identified in our March 2015 blog.

This $1.9 billion megaproject includes the design, construction and 30-year maintenance of the last section of the Loop 202 Freeway – a route which will stretch 22 miles from the Maricopa Freeway segment of I-10 to the Papago Freeway segment of I-10 ...

In a number of recent conversations regarding using Public-Private Partnerships (P3s) to deliver large infrastructure projects under an availability payment structure, I’ve heard a lot of angst by public owners over the cost of private finance and that AP’s may be viewed as debt by the rating agencies.  It’s true the rating agencies have indicated that AP’s can be considered debt for purposes of assessing an agency’s debt capacity but that’s only one aspect of the delivery method to consider.

S&P has issued several reports/FAQs regarding P3’s in the last couple of ...

This is the second of two posts about the recent Infrastructure Ontario 2015 Track Record Report.

As mentioned in the earlier post about Infrastructure Ontario’s 2015 Track Record Report, 98% of the infrastructure projects procured through the agency’s Alternative Financing and Procurement (AFP) program have been delivered on budget.

The report considers a project on budget if its final project cost (awarded contract amount plus utilized post contract contingency) was less than or equal to the awarded contract amount plus the budgeted post contract contingency set at ...

This is the first of two posts about the recent Infrastructure Ontario 2015 Track Record Report.

As the public-private partnership (P3) market in the United States continues to grow, U.S. agencies that are considering the use of P3s to deliver their infrastructure projects have often expressed a desire for more research related to this innovative delivery model.  Last week, Infrastructure Ontario, the agency tasked with delivering the Province of Ontario’s largest and most complex infrastructure projects, released its 2015 Track Record Report.

For the past three years ...