Tag Archive for government

Public Private Partnerships (P3s) Solving Government Budget Deficits

Public Private Partnerships (P3)As Government budget deficits continue to climb for state, local and federal Governments, you will hear much more about the utilization of Public Private Partnerships, also known as, “P3s” or “PPP” to solve this problem. P3 projects are quickly rising in popularity due to the success of obtaining funds to renew Government infrastructure, improve transportation, and construct new projects that they could not afford before.

Public Private Partnership (P3) projects involve a contract between a public sector authority and a private party, in which the private party provides a public service or project and assumes substantial financial, technical and operational risk in the project. In some types of PPP projects, the cost of using the provided services is given exclusively by the users of the service and not by the more traditional method of using the taxpayer.

But why would a private company assume such a huge risk?

Like any investment with large risk, there is a great opportunity for an invested private business to make a lot of money. With Public Private Partnerships (P3s), revenues can be in the form of either a fee for service, paid by government, or fees collected from users, as in the case of highway tolls, automatically ticketed red lights, or hotels attached to convention centers.

One example of a development company successfully using Public Private Partnerships structured to benefit various parties, is Garfield Traub Development. Garfield Traub Development has developed over 40 hotels using primarily P3 funding. One example specifically is the Overton Hotel and Convention Center located in Lubbock, TX. This 303-room hotel with a 47,000 gross square-foot conference center is located across the street from Texas Tech University and Jones AT&T Stadium in Overton Park, the largest private redevelopment project in U.S. history, to date.

The hotel was financed with private debt and equity. The conference center was financed with City bonds to be repaid by site-specific occupancy taxes and property taxes. The capital plan also included naming rights, room licenses and nonprofit foundation grants.

The City now leases the conference center on a long-term basis to the hotel owner who operates the entire property. In addition, the hotel also partnered with Texas Tech University’s Restaurant, Hotel, and Institutional Management (RHIM) program to provide hands-on laboratory experiences in a variety of areas that will truly benefit the RHIM students, giving them the opportunity to become successful professionals in the hospitality industry.

With P3s solving Government budget deficits and successfully creating development projects like these, it is no wonder that they are on the rise. It really is a win-win situation for everyone involved and creates a solution to a big problem.

If you want more information on how Public Private Partnerships (P3s) might help you, visit http://www.garfieldtraub.com or e-mail Garfield Traub.

Lenwood A. Jackson, Sr. Justice Center – References

City Court of Atlanta

Lenwood A. Jackson, Sr. Justice Center

Judge for the City of Atlanta Lenwood A. Jackson

To Whom It May Concern:

I serve as Judge of the City Court of Atlanta, Georgia and Coordinator of Facility Development. I recently had the pleasure of working with Garfield Traub Development on the development of the new City Court of Atlanta, which had been a goal of the City for over five years. I was deeply impressed with Garfield Traub’s dedication and display of expertise that they and their team showed in helping the City accomplish its goal.

As the leader of the City’s development team, Garfield Traub directed the development with skill and professionalism, including the assembly and acquisition of the development site, which was held by five different private owners. Garfield Traub’s knowledge and leadership of “friendly condemnation” facilitated the timely and efficient control of the site by the City.

Garfield Traub also coordinated the efforts of the investment bankers, bond counsel and legal counsel in structuring the project financing, ensuring the best execution and lowest cost of occupancy for the City. The Court was delivered within schedule and substantially under budget in November 2003.

This was a very complicated transaction fraught with difficulties, including political challenges, all of which Garfield Traub and its team worked through successfully. The City of Atlanta is very pleased with the outcome. I have no hesitation in recommending Garfield Traub Development to you for the development of your essential facilities.

Respectfully,
Judge Lenwood A. Jackson
City Court of Atlanta

 

President of Jackson Securities W. Bruce Gow

May 10, 2011

To Whom it May Concern:

I am President of Jackson Securities, a full service investment bank that provides a broad spectrum of investment banking and brokerage services to institutional and retail clients throughout the United States. I had the pleasure of working with Ray Garfield and his firm Garfield Corporation, now Garfield Traub Development LLC in its role as Development Manager for Atlanta and its City of Atlanta Municipal Court, now known as the Lenwood A. Jackson, Sr. Justice Center.

At the time of Garfield Traub’s introduction to the City, the Judges were housed in an old and unsafe facility with little hope of moving to a new and secure court because of City priorities placing a new facility on a bond referendum 5 years in the future. Garfield Traub engaged Jackson Securities to help craft a creative financial solution that significantly shortened the time it would take to enable the safety and security of our Judges and the citizens of Atlanta. Together, we identified an existing and reliable source of City revenue separate and apart from the traditional tax revenues entering the General Fund. The City’s historical $25 million in annual Fines and Forfeiture revenue were used to secure an Annual Appropriation Lease, and allowed the City to transact the business of paying for the design and construction of the new Courthouse; thereby avoiding the wait, or indeed the risk of a referendum to approve the sale of General Obligation Bonds. In 2001, when the City engaged Garfield Traub as its Developer, to my knowledge there were very few if any private sector firms thinking in these creative terms, much less actually transacting what is today known as Public Private Partnerships.

Continuing our collaboration, Jackson Securities and our underwriter’s counsel worked with the City and their Bond Counsel in structuring an Agreement with the Georgia Municipal Association, Inc. to issue over $55 million in Installment Sale Program Certificates of Participation, which were rated AAA.

Very importantly, the project was completed ahead of schedule and below budget.

In my opinion and in the opinion of our firm, the leadership, creativity and integrity of the Garfield Traub organization was critical to the success of this facility, a facility that helped greatly improve an older part of downtown and that sets a standard in both design and safety for our City.

I highly recommend Garfield Traub to any community in need of essential public facilities and would work with them again whenever the opportunity arises.

Respectfully,

W. Bruce Gow

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