Public-Private Development
Collapse Development Incentives: A Toolkit for Deals that Won

This new webinar is intended to provide participants with an overview of the types of public incentive programs that exist to support real estate development projects in need of financial assistance.  The session will begin with a qualitative overview of several types of public incentive programs. The program will then move to a quantitative focus and demonstrate models to analyze these programs during front-end financial feasibility diligence.  Recognizing that many of these programs are fragmented with respect to location, market, product type and governmental jurisdictions, this workshop is intended to help real estate professionals understand the applicability and basic valuation techniques of these programs to facilitate efficient investment decisions.

 

Program Highlights

  • Overview of the types of development incentive programs that exist for financially challenged projects, including tax abatements, tax credits, grants, tax increment financing, etc.
     
  • General understanding of the mechanics associated with the various incentive programs (i.e. when they apply, structural issues, timing, legislative hurdles, etc.)
     
  • General understanding of a back-of-the-envelope approach to valuing each type of program, including how to avoid common modeling pitfalls
     
  • Excel model valuation tool
Formats Available: Streaming
Original Program Date: August 26, 2015
On-Demand Release Date: Available Now
MORE INFOMORE INFO Development Incentives: A Toolkit for Deals that Won
Collapse Public Private Partnerships: Why and How
Understanding potential deals through the public officials' eyes and how to access the tools available are key pre-requisites to meeting the self-interests of both the public and private sides in a development deal. This webinar will give you the understanding and competencies to engage productively in that conversation.  

Revitalization projects to convert obsolete or underutilized land to more productive uses are typically economically and physically complex. This complexity exposes the private developer to a significantly higher risk of financial loss during the entitlement and pre-development processes. This higher risk can make private developers increasingly reluctant to move forward with sites that involve community controversy, assembly, or reconfiguration. Over the past 15 years, public-private partnerships have emerged as an effective means for addressing these challenges while capturing critically important public benefits.  

Nevertheless, opportunities for effective and productive public-private partnerships are frequently missed. As the competency for formulating public-private partnerships is still evolving, these deals can often be poorly structured and executed. Many public agencies still have a weak understanding of the private real estate process and its economics, resulting in unrealistic or constraint-driven deal-making. Similarly, the private sector frequently misses opportunities because it is unfamiliar with the tools, fails to understand the motives of a public agency, and is frustrated with what it considers a bewildering, time-consuming decision-making process.  

This program will describe why public-private partnerships are so critical to successful development today by providing several case study examples illustrating different aspects of the practice. The webinar materials will include a download of background material and models that provide a perspective on how you can pursue opportunities for these transactions in the real world regardless of whether you approach these from the public or private sector perspective.

The webinar will also address the seven public private partnership tools and how to use them. These tools are: 

  1. Lower entitlement risk and funding of pre-development  
  2. Site access, cleanup, assembly, and reconfiguration:  
  3. Public infrastructure and co-investment:  
  4. Debt funding  
  5. Equity and gap funding
  6. Developer selection and negotiations
  7. Creating a development entity

Formats Available: Streaming
Original Program Date: March 26, 2014
On-Demand Release Date: Available Now
MORE INFOMORE INFO Public Private Partnerships: Why and How
Collapse Public-Private Partnerships Today: Tools, Tactics, and Opportunities
Public-private projects have become more difficult in today's economic and fiscal environment, but they have also become more essential.  Cities and developers need each other more than ever to put projects together and offset risks and costs.   What should you do differently today, as both developers and public agencies?  How do you structure deals given fiscal pressures and lender concerns?  How do you take advantage of what can be extraordinary opportunities?

Who Should Attend: 
  • Developers
  • Public agency finance and redevelopment officials
  • Major lenders
  • Development attorneys for developers and public agencies
Formats Available: Streaming
Original Program Date: April 13, 2011
On-Demand Release Date: Available Now
MORE INFOMORE INFO Public-Private Partnerships Today: Tools, Tactics, and Opportunities
Collapse Using Public-Private Partnerships to Create Value-Added Conversions
The Great Recession of 2008/09 has caused fundamental changes in the financing of real estate development, changes that will persist for years as the industry de-leverages, vacancies rise and cap rates increase. Valuations of existing properties have plunged, no one knows for sure by how much, but discounts of 40% to 50% are not unusual. Each sector faces its own unique challenges:
  • The retail sector, already hard hit with lower sales, is particularly distressed with high
    vacancy rates (current estimates are 12% vacancy, a total of 40 square miles of vacant
    space), caused by a combination of overbuilding and a wave of retailer bankruptcies.
  •  In addition to the loss of jobs, the office sector faces a decline in square footage per
    worker as technology enables work virtually;
  • With further declines and outsourcing in manufacturing, the industrial sector adds to its
    growing inventory of vacant square footage;
  • Hospitality, a sector that has a history of boom and bust, has a glut of inventory from
    prior cycles that can no longer compete in a high amenity marketplace where newer
    product sets the pace.
This “perfect storm” of lower leverage, reduced demand, and high inventory has highlighted the growing supply of obsolete, underutilized properties which face bleak prospects for renewal because current valuations of competing properties are lower than replacement, putting a limit on the ability to attract scarce private capital for renewal.

The iconic example of these conditions is the dead shopping mall. At one time, hailed by ULI as, “the quintessential American contribution to the world’s consumer culture”, the conditions that led to the creation of shopping malls and sustained them for decades are changing rapidly. These large unwieldy properties now face the need to convert the vast parking lots and clunky structures into contemporary places. But, where will the capital to fund this conversion come from given that current market conditions will make it mpossible to use purely private sources?

The answer lies in a poorly understood and emerging source of development capital; namely,
public private partnerships. These partnerships address five critical tasks to convert obsolete
properties:

1. Lower entitlement risk and funding of pre-development: The public sector can lower
entitlement risk and reduce pre-development funding requirements by taking the lead on
creating a community-based plan for conversion,
2. Site and access reconfiguration: Public sector assistance is crucial to improve the usually
poor access and reconfigure parcel lines that constrain conversion.
3. Debt funding: The public sector can use low cost municipal debt (land secured, tax
increment or lease revenue bonds) to fund infrastructure, parking and other project
components, thus lowering debt costs.
4. Equity funding: The public sector can provide some portion of the equity component
using land value, tax increment or tax credit funding.
5. Gap funding: Public sector funding is replacing mezzanine funding as the “value-add”
gap funding that used to be a common component of the private capital stack.

The Great Recession has accelerated an already existing trend toward public private partnerships,which have become inherent to the more economically and physically complex, contemporary style of development. And yet, as important as public partnerships have become in contemporary development financing, frequently opportunities are missed and deals badly made because the state of the art for formulating and executing public private partnerships is still relatively new and evolving. Many public agencies still have a weak understanding of the private real estate process and its economics, resulting in unrealistic or constraint-driven deal making. Similarly, the private sector frequently misses opportunities because it is uncertain on how to craft a partnership and is frustrated with what it considers a bewildering, time-consuming decision making process.

Our session on “Using public private partnerships to create value-added conversions” will cover the principles and practice of successfully creating diverse and complex public-private partnerships to capitalize on the inventory of properties that are ripe for value-added conversion.

The webinar will explore case studies and will provide a download of background material and models that provide you a perspective on how you can pursue opportunities for these transactions in the real world regardless of whether you approach these from the public or private sectors.
Formats Available: Streaming
Original Program Date: April 30, 2010
On-Demand Release Date: Available Now
MORE INFOMORE INFO Using Public-Private Partnerships to Create Value-Added Conversions