Public-Private Real Estate Development projects are a critical source for the creation of space in cities in America today. Charter schools are swiftly changing the landscape of education across America today. Infrastructure projects are benefiting from private ingenuity and public resources. With public support, sports franchises such as the NFL Rams can relocate to a new city and bring economic development to that new location.Private partners tend to bring new capital with cities need to thrive. That new capital is typically used for investment and reinvestment to revive what is already there. Private partners also bring efficiency means and methods. And lastly, private partners bring along with them guarantees and balance sheets. Unfortunately, public figures aren’t personally liable for the completion of projects, the private partner can make a personal promise that those projects will be completed in the desired manner.

Public partners tend to provide public resources to encourage private investment. One of the easiest to provide is free or low-cost land and existing buildings. Many cities have areas that are ripe for new investment. Public partners also can provide subsidies in a variety of ways; this could include grants, low-interest loans, and second mortgages. Tax abatements are a popular tool used to encourage private investment. For private partners, the real estate tax is often the largest expense to do a project, if this cost is minimized that same project becomes much more viable. Private partners must engage with the public to understand their wants and needs; that goes beyond financial benefits, quality of life should be high in the priority list.

The flow of capital between the parties can happen in a variety of ways. Long-term leases or ground leases is a simple way of maintaining the property as government land but receiving the much-needed funds. Revenue sharing is another method which is often used on infrastructure projects such as toll roads. Tax increment financing is another creative method in which the taxes can step up over time. Bond financing provides a vehicle for private investors to receive returns and the primary private investor can have the necessary support to build the project, for example, a new school.

Affordable/workforce/supportive/senior housing, water supply, energy supply, and parks are just a small list of all the ways in which private parties and public entities can work together to develop cities. All stakeholders involved should work together more to maximize the potential that lays ahead.