Meeting your capital needs in a limited-resource environment and an ultra-competitive marketplace is stressful. It’s no surprise that more and more institutions (and their leaders) are looking for creative solutions and capital support. Public private partnerships (“P3”), for example, can have an important role to play in your funding toolbox. Used appropriately, a P3 may help you accomplish a number of goals and objectives including:

  • Realizing private sector efficiencies by tapping into developer expertise and innovations
  • Shifting risk to the private sector and accelerating procurement and delivery schedules;
  • Shifting to a life-cycle focus by defining the long-term cost of ownership and providing a funding source to address deferred maintenance obligations;
  • Increasing funding options by creating and leveraging additional revenue streams for the project while potentially avoiding tax-exempt use restrictions; and
  • Leveraging private sector capital through off-credit debt structures that may preserve debt capacity.

Given the nuances and variability in a P3 transaction, we view the first step to be the most important—the process of helping you (1) define with precision the critical problem(s) you want to solve, (2) clarify the project’s other strategic objectives, and (3) establish the financing’s key constraints. In our opinion, clearly defining what would constitute a “win” for your institution is the single most important step which gauges the likelihood of success.